• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Ambar Singh Roy

Bioinformatics is emerging as a viable business proposition especially in the areas of drug discovery, drug development and clinical trials.

Finally, the wait seems to be over. The transition from the research laboratories to the boardrooms of business houses and minds of budding entrepreneurs has been made. If the results of the Global Business Plan Competition i2I (ideas to implementation), 2002, held here recently under the aegis of the Entrepreneurship Cell of Indian Institution of Management, Calcutta, (IIMC) is an indication, the field of bioinformatics holds great potential for business initiatives.

A four-member team from IIMC bagged the first prize at IIMC's i2I 2002 finals for an infotech business plan for The Drug Company to provide quality bioinformatic algorithms to small pharmaceutical companies to aid in the quest of new drug development.

The global pharmaceuticals market is estimated to grow to over $500 billion by 2004 from $350 billion at present. Benefits offered by bioinformatics to the pharmaceuticals sector lie in drug development and clinical trials. Its commercial scope also lies in medical diagnostics, pharmacogenomics and agricultural and industrial biotechnology.

According to the business plan presented by The Drug Company, the cost of developing a particular drug is anywhere between $250 million and $500 million. With the use of bioinfomatic algorithms, the cost and time spend on the drug discovery process can be halved. Information obtained from collated data suggest that around 250 clinical trials are launched every year.

As such, at least these many chemical entities must be identified for clinical trials during the drug development process. With 250 new molecules and a modestly-estimated average saving of $100 million in each case, the total potential savings could well be $25 billion every year.

Additionally, with a conservative savings estimate of $60 million per clinical trial, the savings potential on 250 clinical trials per annum works out to $15 billion. Of the total potential savings of $40 billion, 50 per cent could well be contributed by research tool technologies.

Even if that is the case, the contribution of bioinformatics can be no less than $20 billion every year. Add to this savings in terms of time, a crucial element in the intellectual property rights-dependent pharmaceuticals sector.

The Drug Company's infotech business plan veers round the thinking that research and development work in the global pharmaceuticals sector will increase with the patent structure moving from processes to products. Consequently, new product launches would be crucial for fast target discovery.

It would be necessary for firms to outsource their computational requirements to third parties for achieving operational efficiencies. Besides garnering marketshare, early entrants into the business could well set standards for future developments. Companies' success in the field could well depend upon several crucial differentiators. These include the development of proprietary technologies that would seek to customise the distributed computing model according to the specific needs of the life sciences industry.

Companies can function as the back-end processing outlets of corporates who themselves lack R&D facilities. The resources and proprietary database created in the process could become an additional source of revenue.

With bioinformatics having emerged as a preferred career option for many, it is a question of time when business ideas veering round the discipline catches the fancy of venture capitalists.

For, it's not for nothing that a bioinformatics-centric business model bagged the top honours from among 400-plus entries to i2I, which is stated to be the biggest business plan competition ever held in Asia, and one which has been organised by a business school in India.

ambar_singhroy@rediffmail.com

Send this article to Friends by E-Mail

Stories in this Section
It works out real cheap

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line