Oligonucleotide market set to double by 2010, says F&S

And one company aiming to take a slice of this pie is Sigma Genosys, which has just opened a new facility for the manufacture of oligonucleotides in the UK.

F&S estimates that the total global market for oligonucleotides is likely to grow from $340m in 2003 to $776m in 2010, driven by demand from researchers working in basic research, drug target screening and therapeutic development. Future applications are expected to include agriculture, gene therapy and disease prevention.

"The industry has been greatly encouraged by the prospective benefits of RNA-interference (RNAi), second generation antisense compounds and CpG technologies,"​ according to F&S research analyst Raju Adhikari.

"A number of antisense and aptamer compounds have already been approved and almost 20 antisense compounds have found acceptance in clinics,"​ he added.

Capable of 'silencing' the expression of target genes in a variety of organisms and cells, RNAi is expected to be adapted as an integral tool in drug target validation studies, and this represents a significant opportunity for companies that can offer oligonucleotide synthesis.

However, the failure of a few key antisense compounds to deliver oligonucleotides inside cells, tissue organs and bodies is, however, expected to impose a serious restraint on the market. In fact, the development of effective delivery technologies has become a matter of crucial concern and many biotechnology companies have been trying to address the issue by working in tandem with the research community, said Dr Adhikari.

Some of them have even made extensive investments in developing in-house research systems. The adoption of oligonucleotides with an increased half-life is also expected to maximise bioavailability and delivery.

"The companies that are capable of developing products by keeping pace with consumer needs and preferences are likely to experience substantial growth,"​ he noted.

For example, Sigma-Genosys, a division of fine chemicals giant Sigma-Aldrich, says that with the new UK facility it can commit to delivering custom oligonucleotides to clients within 24 hours.

The 22,000-square-foot manufacturing site enables higher production capacity and has improved quality control facilities including state-of-the-art high-throughput mass spectrometry analysis.

But competitiveness in the market has been rising constantly and more and more companies have been moving into the niche oligonucleotides market, resulting in price pressure. Qiagen recently decided to sell off​ its nucleic acid synthesis unit because of these pricing pressures, but significantly retained the group handling RNAi as it said this offered both high growth and high margins.

High throughput and scalable technologies that reduce manufacturing costs are gaining popularity as they allow participants to economise the cost of production, and thereby reduce the long-term cost of goods, according to the F&S report.

Manufacturers have also been investigating the potential of setting up plants in low cost regions such as India, China and Eastern Europe. Further, they have been attempting to secure long-term supply contracts with consumers and manufacture oligonucleotides depending on consumer preferences and demand trends.

For instance, the positive response towards RNAi technology is expected to give the RNA oligonucleotides market a boost and it is likely to grow at a CAGR of 29 per cent from 2002 to 2009, as opposed to the 8.7 per cent of the DNA oligonucleotides market. However, on the whole, the DNA oligonucleotides market is expected to be larger than the RNA oligonucleotides market - growing from $300m in 2003 to $470m in 2008.

"There has been a rising demand for comparative analyses of the DNA and RNA oligonucleotides markets among investors,"​ according to Dr Adhikari. "Manufacturers capable of providing a complete portfolio of oligonucleotide products in a 'one-stop shop' are likely to prove successful."​