The global market for bioprocessing is mirroring the phenomenal growth of the biotechnology industry around the world, says a recently-published report from D&MD Reports.
Since the original discoveries of the 1970s, the use of recombinant DNA technology has led to the creation of a biotechnology industry which, in the US, now comprises more than 1,450 companies with revenues just over $20 billion (€17.5bn) and employing more than 140,000 people.
Europe has now made up for a later start and represents about 25 per cent of the global market, with 1,880 companies employing 87,000 people and with revenues approximating $13.5 billion. This is followed by the Asia/Pacific region with 532 companies, 6,500 employees and revenues of $1 billion, with Australia deserving a specific mention with 198 companies and revenues of $590 million. Most of these companies worldwide are researching, developing and manufacturing biopharmaceuticals, notes the report.
The growth of this industry has been paralleled by the growth of the bioprocessing industry, which is concerned with the processes employed in the creation and testing of biopharmaceutical products. These products are being produced using microbial or animal cell expression systems or in transgenic animals or plants.
The typical bioprocesses found in a manufacturing flow sheet include mass cell culture, or a transgenic source, centrifugal cell separation and perhaps cell disruption, filtration, several types of chromatographic separation, and the creation of stable final formulations, probably including lyophilisation of the final product. In support of the bioprocessing facilities are certain basic systems providing purified air and water, and clean, sterilised equipment and containers.
Cell lines and culture media
Based upon the last available figures, the market for cell lines in the US has grown to approximate $50 million per annum, with a growth rate of about 7 per cent. Most of the growth in this area is in the supply of specialised cell lines to research and development laboratories seeking new or improved expression systems, test methods, diagnostics or therapeutic agents, according to D&MD.
The most significant market in this business sector is, however, in the supply of culture media and their components. A January 1999 report valued the US media market at $167.6 million, with a growth rate of 14 per cent per annum, giving a projected value for 2002 of $283 million. Since the major companies in this segment are selling internationally, on adding in the value of the European and Asian markets come up with an estimated figure for last year of about $500 million.
One sector of the media business that is important enough to be considered separately is the supply of animal blood serum-based media supplements, especially fetal bovine serum. This international business is still valued at $120-$140 million per annum and is split between two major players, Invitrogen and HyClone and about four smaller suppliers.
Capital equipment represents about 40 per cent of the cost of a new GMP facility. In this market sector, there has been significant condensation, in which multifirm companies are still acquiring more smaller companies and adding to their product range and geographical coverage. One example is the SP Industries conglomerate, which now contains both major US manufacturers of lyophilisers. To a certain extent, this has reduced competition, although most operations still promote specific product ranges under their original brand names.
The world market for the pilot to production-scale bioreactors and fermentors is estimated at $200 million in the report, but it fluctuates widely, since capital expenditure on large custom plants can represent this figure from one installation. Only three companies are of any importance in this business, namely New Brunswick, B Braun (now a member of the Sartorius Group) and BioEngineering.
Since the technologies are also applicable to other industries, estimates of the value of the bioprocessing industry to the manufacturers of centrifuges, homogenisers mills and filter holders is difficult, but since one piece of major equipment may sell for $250,000 to $1 million, and a custom plant may cost several millions of dollars, the bioprocessing hardware market must be of the order of $100 to $500 million, according to D&MD.
However, manufacturers of large sterile disposable containers and accessories are promoting a trend away from the static tank/pipe type of installation. On a scale of perhaps up to 500L per batch, this trend may already be having an effect.
And the trend is likely to continue, says the report. The growth of the supply of this type of equipment could be of the order of 10 to 15 per cent per annum, at the expense of the more traditional stainless steel plant. Nalge Nunc markets a wide range of smaller disposable cell culture vessels and other plastic disposables and has annual sales of about $300 million. Becton Dickinson markets the competing Falcon range and claim a similar market share.
Separations and filtration
In the chromatographic separations sector, Amersham Biosciences leads the field, but there are at least 15 other companies with appreciable market shares. Total Amersham Bioscience sales are around $980 million per annum, with “separations ” (principally chromatography equipment and media) yielding approximately $400 million of this total.
Other major players in this sector report revenues between $50 million and $100 million.This is possibly the most valuable bioprocessing sector, especially in terms of its consumables, but that position may be held by the filter business.
The bioprocessing microfiltration and ultrafiltration business is dominated by two large multinational companies, both US in origin. They are Millipore, which is now only servicing the biopharmaceutical and research industries (having spun off its microelectronics business as a separate company) and the biopharmaceutical segment of Pall. Meanwhile, a third company, Germany’s Sartorius, is gaining increased market share in certain specialist applications in the ultrafiltration segment, according to the report.
In all,the biopharmaceutical industry spends at least $800 million per annum on filters and filtration equipment, it estimates.
Suppliers of analytical equipment are generally not suppliers specifically to the biopharmaceuticals, since analytical technology is applicable to many different types of industry. This is particularly true for chemical and physical analyses.
Obviously, biological testing is much more specific to bioprocessing, but not exclusively, since synthetic pharmaceuticals must also be tested in animals. High-performance liquid chromatography (HPLC)and electrophoretic gel separations are the most commonly used techniques in bioprocess analysis and control. Waters is currently the world leader in HPLC systems and has extended into mass spectrometry. The company has sales of almost $860 million, of which approximately 60 per cent is in HPLC sales alone.
The leader in electrophoretic technology, Bio-Rad, has revenues approximating $400 million in its Life Sciences division, while Charles River Laboratories has annual sales of about $300 million from laboratory animal supplies.
The contract research industry has experienced growth of 25-30 per cent annually since 1995, although there has been some slowing down recently due to the reduction in clinical trial projects. The overall value of the industry grew from $1.5 billion in 1995 to $4.5 billion in 1999 and was probably around $6 billion in 2002. However, some larger contract research organizations are involved mainly in the earlier stages of drug discovery, screening and preclinical testing,or are specialising in the management of clinical trials, notes D&MD.
It is in these segments that most of the revenue mentioned above is generated. The late-stage development and GMP contract manufacturing segment, where the bioprocess industry chiefly operates, has more smaller companies. Cambrex has expanded into this area by the acquisition of two other contract manufacturers.
There are approximately seventy companies in the world currently offering contract manufacturing services. The majority (about 50) are based in or have operations in North America. The remainder are principally in Europe, with one company in Japan and one in Australia.
The worldwide contract manufacturing market for biopharmaceuticals was valued at approximately $780 million in 1998. By 2000 it was projected to exceed $1.1 billion, thus demonstrating one of the highest percentage growth rates in the entire bioprocessing industry. According to the Biotechnology Industry Organisation (BIO), the US biopharmaceutical contract manufacturing grew to $500 million in revenues in 2001 and is projected to increase by more than 20 per cent annually.
Current projections, based upon the number of monoclonal antibody products currently in the clinical trial pipeline, point to a serious shortfall developing within three years in manufacturing capacity, especially in mammalian cell culture. Several major contractors are in the process of expanding their capacity, but the determination of the future demand is fraught with uncertainty.
There is concern in the management of contract manufacturers that, if their expansions are too late, they will be forcing clients to reconsider creating or expanding their own facilities, so that the new capacity, when it is finally available, may be in excess of demand. In fact, several manufacturers have already decided to go it alone, rather than rely upon the availability of contract capacity.
A shortage of experienced Good Manufacturing Practice (GMP)-trained staff to operate new capacity, whether in the sponsor companies or in the contractors, may exacerbate the problem, according to the report.
In general, for the bioprocessing industry, the profits to be made in the capital goods sector are similar to those for other industries. The more competitive consumable sector still offers potential for more rapid growth and better profits, but consolidation is occurring.
Future potential for growth is probably more to be found in contract services and in the supply of goods and services to research and development laboratories. The introduction of new research techniques is continuing at a satisfactory level, especially in the high-throughput screening for new compounds and in genomics and proteomics.
The revenues of the US biotechnology industry from therapeutics, diagnostics and agricultural and other products are expected to be almost $16 billion in 2000 and to grow to a total of $86 billion by 2025. The bioprocessing industry will make a major contribution to this growth and will reap a concomitant benefit from its efforts to develop and market new and better bioprocessing tools.