Micro Array Technology and Markets

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Trends in the Market Opportunities for Trends in the Market Opportunities for Microarray TechnologiesMicroarray Technologies

Kenneth G Krul, MBA, PhDKenneth G Krul, MBA, PhD

Barcelona, Spain --- May 2008Barcelona, Spain --- May 2008

KGK Associates, Ltdwww.kgkassociates.com.

Trends in the Market Opportunities for Microarray Trends in the Market Opportunities for Microarray TechnologiesTechnologies

GoalsGoals

1. Provide a view on how and where microarrays are 1. Provide a view on how and where microarrays are being used.being used.

GoalsGoals

2. Provide a perspective on where opportunities in 2. Provide a perspective on where opportunities in microarray applications may be over the next ten years.microarray applications may be over the next ten years.

GoalsGoals

2. Provide a perspective on where opportunities in 2. Provide a perspective on where opportunities in microarray applications may be over the next ten years.microarray applications may be over the next ten years.

3. Provide a point of reference in terms of market 3. Provide a point of reference in terms of market potential for microarray applications over the next few potential for microarray applications over the next few years.years.

Laboratory Use of FeaturesLaboratory Use of Features

Almost all laboratories using microarrays use oligo Almost all laboratories using microarrays use oligo features for sequencing and/or SNP analysis.features for sequencing and/or SNP analysis.

Only 7% of laboratories using microarrays use protein Only 7% of laboratories using microarrays use protein arrays.arrays.

Very few laboratories use tissue or small-molecule Very few laboratories use tissue or small-molecule microarrays.microarrays.

Laboratories Using MicroarraysLaboratories Using Microarrays

Based on Laboratory PopulationBased on Laboratory Population Academic Laboratories: 75% - 80%Academic Laboratories: 75% - 80% Industrial/Commercial Laboratories: 20% - 25%Industrial/Commercial Laboratories: 20% - 25%

Laboratories Using MicroarraysLaboratories Using Microarrays

Based on Laboratory PopulationBased on Laboratory Population Academic Laboratories: 75% - 80%Academic Laboratories: 75% - 80% Industrial/Commercial Laboratories: 20% - 25%Industrial/Commercial Laboratories: 20% - 25%

Based on Microarray Features UsedBased on Microarray Features Used Academic Laboratories: 90% - 95%Academic Laboratories: 90% - 95% Industrial/Commercial Laboratories: 5% - 10%Industrial/Commercial Laboratories: 5% - 10%

Custom-Spotted –vs- Off-the-Shelf Custom-Spotted –vs- Off-the-Shelf MicroarraysMicroarrays

80% of the laboratory population spots their own 80% of the laboratory population spots their own microarraysmicroarrays

20% of the laboratory population uses off-the-shelf 20% of the laboratory population uses off-the-shelf microarraysmicroarrays

The overlap usage (custom and off-the-shelf) is not The overlap usage (custom and off-the-shelf) is not knownknown

Custom-Spotted vs. Off-the-Shelf Custom-Spotted vs. Off-the-Shelf MicroarraysMicroarrays

The overlap usage (custom and off-the-shelf) is not The overlap usage (custom and off-the-shelf) is not knownknown

The trend is toward more off-the-shelf usageThe trend is toward more off-the-shelf usage

Primary Reasons for the Use of Custom-Primary Reasons for the Use of Custom-Spotted vs. Off-the-Shelf MicroarraysSpotted vs. Off-the-Shelf Microarrays

Custom SpottingCustom Spotting Increased flexibilityIncreased flexibility Lower array costsLower array costs

Primary Reasons for the Use of Custom-Primary Reasons for the Use of Custom-Spotted vs. Off-the-Shelf MicroarraysSpotted vs. Off-the-Shelf Microarrays

Custom SpottingCustom Spotting Increased flexibilityIncreased flexibility Lower array costsLower array costs

Off-the-Shelf-ArraysOff-the-Shelf-Arrays Specific technologySpecific technology Convenience and speedConvenience and speed

Reasons for the Use of Reasons for the Use of Custom-Spotted vs. Custom-Spotted vs.

Off-the-Shelf Off-the-Shelf MicroarraysMicroarrays

Technolo

Convenie

bility

Off-the-Shelf Custom

Materials Used for Materials Used for Custom-Spotted Custom-Spotted

MicroarraysMicroarrays

Drosophila

Patterns of Microarray Use

Seven Basic Areas of Microarray AnalysisSeven Basic Areas of Microarray Analysis

Sequence AnalysisSequence Analysis

Gene Expression AnalysisGene Expression Analysis

Comparative Genomic HybridizationComparative Genomic Hybridization

Drug DiscoveryDrug Discovery

Tissue MicroarraysTissue Microarrays

Protein Microarrays (Immunoassays and Receptor Assays)Protein Microarrays (Immunoassays and Receptor Assays)

DNA ComputingDNA Computing

Markets Considered Opportunities for MicroarraysMarkets Considered Opportunities for Microarrays

Molecular DiagnosticsMolecular Diagnostics

Up-SideUp-Side

1.1. Wide range of current and potential assaysWide range of current and potential assays

2.2. MultidisciplinaryMultidisciplinary

3.3. Rapidly expanding market ($117 billion market potential in the Rapidly expanding market ($117 billion market potential in the seven major world healthcare markets by 2016 --- excluding seven major world healthcare markets by 2016 --- excluding pharmacogenomics/pharmacogenetics)pharmacogenomics/pharmacogenetics)

4.4. Strong technology baseStrong technology base

Molecular DiagnosticsMolecular Diagnostics

Down-SideDown-Side

1.1. Very few tests, if any, required in such volume as to justify Very few tests, if any, required in such volume as to justify microarray analysis; potential market essentially ZEROmicroarray analysis; potential market essentially ZERO

2.2. Major suggested application, prenatal screening for inborn errors Major suggested application, prenatal screening for inborn errors of metabolism appears opportune but has faultsof metabolism appears opportune but has faults

3 million live births per year (USA) X 400 errors = 1.2 billion features3 million live births per year (USA) X 400 errors = 1.2 billion features

@ 12,000 features per array (20x400) = 100,000 arrays/year@ 12,000 features per array (20x400) = 100,000 arrays/year

3.3. Cost-benefit analysis does not justify a shotgun approachCost-benefit analysis does not justify a shotgun approach

Blood BankingBlood Banking

Up-SideUp-Side

1.1. Limited number of tests, but high volume and secure demandLimited number of tests, but high volume and secure demand2.2. Well-defined marketWell-defined market3.3. Market motivated to cost-cuttingMarket motivated to cost-cutting

14 million units/yr in USA –Tested by pools of 9 = 1.6 million panels/yr14 million units/yr in USA –Tested by pools of 9 = 1.6 million panels/yr80% of USA testing in 7 major regional centers = 1.3 million panels/yr, or 80% of USA testing in 7 major regional centers = 1.3 million panels/yr, or

186,000 panels/center/year = 3,600 panels/wk186,000 panels/center/year = 3,600 panels/wkSix tests per panel (HAV, HBV, HCV, HIV, HTLV, WNV)Six tests per panel (HAV, HBV, HCV, HIV, HTLV, WNV)

~21,000 features (6x3,600)~21,000 features (6x3,600)

Up-SideUp-Side

4.4. Current USA potential market ~$970 million, reaching ~1.5 billion Current USA potential market ~$970 million, reaching ~1.5 billion by 2010by 2010

5.5. Current potential market in the seven major world healthcare Current potential market in the seven major world healthcare markets, ~$2 billion, expected to grow to $3 billion by 2012markets, ~$2 billion, expected to grow to $3 billion by 2012

Down-SideDown-Side

1.1. Well-established and aggressive competitionWell-established and aggressive competition

2.2. Conservatism of blood bankersConservatism of blood bankers

3.3. Instrument/array package a mustInstrument/array package a must

4.4. Instrument will most probably have to be a loss-leaderInstrument will most probably have to be a loss-leader

Genotype Screening/Disease SusceptibilityGenotype Screening/Disease Susceptibility

Up-SideUp-Side

1.1. Claimed health benefits in terms of preventive medicineClaimed health benefits in terms of preventive medicine

2.2. Large population of potential test subjectsLarge population of potential test subjects

3.3. Highly promoted by the healthcare/life insurance industry willing Highly promoted by the healthcare/life insurance industry willing to investto invest

Genotype Screening/Disease SusceptibilityGenotype Screening/Disease Susceptibility

Down-SideDown-Side

1.1. IT WILL IT WILL NEVERNEVER FLY! FLY! No market potentialNo market potential

2.2. Cost-prohibitiveCost-prohibitive

Current cost of human genome analysis = $100,000 genomeCurrent cost of human genome analysis = $100,000 genome

Semi-realistic estimate of future cost = $12,000 genomeSemi-realistic estimate of future cost = $12,000 genome

Totally unrealistic estimate of future cost = $1,000 genomeTotally unrealistic estimate of future cost = $1,000 genome

3.3. Major moral, legal, ethical and privacy issuesMajor moral, legal, ethical and privacy issues

Personalized MedicinePersonalized Medicine

Up-SideUp-Side

1.1. POTENTIALLYPOTENTIALLY a very large market (opening at $250 million in a very large market (opening at $250 million in the USA by 2015 – not counting current the USA by 2015 – not counting current ad hocad hoc tests) tests)

2.2. Companion diagnostics in therapy backed by both the Companion diagnostics in therapy backed by both the pharmaceutical industry AND the FDA (which is pushing the pharmaceutical industry AND the FDA (which is pushing the companion diagnostics issue)companion diagnostics issue)

3.3. Theory supported by current practice (Theory supported by current practice (HerceptinHerceptin and and GleevecGleevec))4.4. Defined markets by need (cancer, psychiatric disorders, Defined markets by need (cancer, psychiatric disorders,

cardiovascular drugs)cardiovascular drugs)

Personalized MedicinePersonalized Medicine

Down-SideDown-Side

1.1. Current companion diagnostics are Current companion diagnostics are ad hocad hoc; that is, they were ; that is, they were developed developed afterafter the therapeutic reached the market; not used in the therapeutic reached the market; not used in drug development of clinical trial designdrug development of clinical trial design

2.2. The coordinated therapeutic/diagnostic development concept has The coordinated therapeutic/diagnostic development concept has yet to be validatedyet to be validated

3.3. The more closely a single gene is associated with a single drug, The more closely a single gene is associated with a single drug, the less likely there will be a market for microarraysthe less likely there will be a market for microarrays

4.4. Not a short-term prospectNot a short-term prospect

BioterrorismBioterrorism

Up-SideUp-Side

1.1. Relatively large opportunity but primarily linked to continued Relatively large opportunity but primarily linked to continued developmentdevelopment

2.2. Focused marketFocused market

3.3. Huge unmet needHuge unmet need

BioterrorismBioterrorism

Down-SideDown-Side

1.1. Basically, a single customer outletBasically, a single customer outlet

2.2. Highly competitiveHighly competitive

3.3. Market size unknown/contractedMarket size unknown/contracted

OthersOthers

1.1. AgricultureAgriculture

2.2. Animal husbandryAnimal husbandry

3.3. Animal healthAnimal health

4.4. EcologicalEcological

5.5. Food industryFood industry

SUMMARYSUMMARY

Microarray markets are highly slanted to academic laboratories.Microarray markets are highly slanted to academic laboratories.

Genomics present the major use of microarrays at this time, with Genomics present the major use of microarrays at this time, with custom-spotted oligos most prevalent.custom-spotted oligos most prevalent.

Custom-spotted arrays are the preferred method of operation for Custom-spotted arrays are the preferred method of operation for most laboratories.most laboratories.

Two-thirds of all laboratories using custom-spotted microarrays Two-thirds of all laboratories using custom-spotted microarrays spot human genetic material and just over one-half spot murine spot human genetic material and just over one-half spot murine genetic material.genetic material.

SUMMARYSUMMARY

We looked at five areas of opportunity for microarrays: molecular We looked at five areas of opportunity for microarrays: molecular diagnostics, blood banking, genotype screening, personalized diagnostics, blood banking, genotype screening, personalized medicine and biowarfare.medicine and biowarfare.

Blood banking presents the most immediate opportunity for Blood banking presents the most immediate opportunity for microarray technology.microarray technology.

Genotype screening for disease susceptibility prediction hasn’t Genotype screening for disease susceptibility prediction hasn’t the chance of a snowflake in a blast furnace.the chance of a snowflake in a blast furnace.

SUMMARYSUMMARY

Personalized medicine and companion diagnostics may present a Personalized medicine and companion diagnostics may present a good opportunity for microarray technology, but it will be seven good opportunity for microarray technology, but it will be seven years, perhaps more, before the volume of testing justifies the years, perhaps more, before the volume of testing justifies the use of microarrays --- and only if a small number of genes can be use of microarrays --- and only if a small number of genes can be defined as controlling the metabolism of a large number of drugs.defined as controlling the metabolism of a large number of drugs.

Biowarfare defense is a powerful market and could benefit greatly Biowarfare defense is a powerful market and could benefit greatly from microarray technology, but may be a difficult market to from microarray technology, but may be a difficult market to crack.crack.

Ecological, agricultural, animal and food industries hold only Ecological, agricultural, animal and food industries hold only limited potential due to the level of technology in these non-limited potential due to the level of technology in these non-research laboratories.research laboratories.

Micro Array Technology and Markets

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