Asia gets serious about bio-IT

Great strides made in the areas of genomics, proteomics and other key features across the developing biotech landscape have dramatically altered the playing field for bioinformatics groups Asia is now expected to realize a massive surge in demand for IT systems as the region races to catch up with the rest of the world.

The completion of the human genome project (HGP) alone generated a mass of genetic data which, if printed, would create a book stack 17 times higher than Mount Everest -- and adding another mountain or so each week -- giving information technology top-billing amongst biotech companies.

This set the stage for bio-IT groups to build earnings and gain some vital credibility on Wall Street and amongst other key financial centres. Unfortunately, however, those companies which defined the bioinformatics market before HGP found that their territory was suddenly very crowded.

Major pharmaceutical companies, leading biotech research institutes and commercial organisations, as well as traditional IT companies, had been just as eagerly awaiting genomic developments and all had their marketing armies at the ready. Further complicating the picture, not only are IT companies moving to tell their bio stories, but biotech research itself, and the patenting of it, is starting to become popular amongst non-biotech companies.

Such developments have, analysts believe, led to a shrinking, as well as a blurring of the bioinformatics market post-HGP, especially within the US and Europe. "Last year if you called yourself a bioinfo company you were a darling but investors have backed away dramatically: there are very few bioinformatics companies that are in the black," says Reenita Das, director of health care, Asia Pacific with research and consultancy group Frost & Sullivan.

For example, Celera Genomics, one of the world's most prominent bio-IT companies, has racked up heavy losses for several consecutive quarters. "The overall market is actually shrinking," Das says. Exerting much of the pressure on the sector, large pharmaceutical companies -- especially in the US and Europe -- are now moving to develop their own IT solutions in-house, which is reducing the number of potential buyers in the market.

Consequently, Asia, which lacks a mature biotech infrastructure, has emerged as the promised land for bioinformatics due to its abundance of early-stage biotech companies in need of services consultancy and quick, usable IT solutions.

Around 700 of an estimated 1200 bioscience organisations throughout Asia Pacific are viewed as being significant IT spenders, according to a recent study by technology research group IDC which did not include Japan. Pharmaceutical companies surveyed in the region spent on average 15-20 per cent of their R&D budgets on IT while spending amongst genomic- and proteomic-focused organsitions ranged from 15-50 per cent.

Driving uptake of IT amongst Asian biotechs is high levels of government support for biotech industries which are viewed as a crucial block in the inevitable movement towards knowledge-based economies. This, according to IDC is likely to produce exponential growth amongst Asian IT markets. For instance, the Taiwanese government recently declared that it plans to pour around $US8 billion ($14.7 billion) into biotech over the next eight years, with at least 10 per cent of this going into nanotechnology. And the notoriously cash-generous Singaporean government has pledged $US2.5 billion over three years.

The governments of several other centres, such as India and China, have also established biotech research as a key priority. "Developing the life sciences industry is a bit like developing highways, railways or phone systems; government investment is essential but it must be done in partnership with academic institutes, government and business," said Executive director of IBM Life Sciences Asia Pacific, Bill Doak. "This is what will define success for bioscience countries". Australia, on the other hand, is still grappling with a fragmented, state-based approach to funding with a relatively small commitment from the Federal government.

Consumption

"One of the best indicators of the maturity of biomolecular industry is the wider consumption of bio-IT -- Australia is seeing low levels of consumption because of low levels of commercialistion," said Sydney University associate professor and APBioNet member Tim Littlejohn.

According to the IDC report, bioinformatics revenues for the region should reach $US3.83 billion by 2006, a massive increase from the $US384 million spent in 2001. IDC further estimates that around $US50 billion worth of private and public sector money will have been injected into the Asian biotech market by 2006, helping to achieve compound annual growth of around 58 per cent from now until 2006, compared with a global market average of just under 25 per cent base on a global market projection of $US38 billion by 2006.

Also, pointing to the immediate opportunities within Asia, IDC predicts that biotech growth in the region will exceed 80 per cent during 2003-04. The current emphasis on servers, storage and services is expected to continue for the next five years with these markets expected to be worth $US1.1 billion, $US1 billion and $US794 million respectively.

Storage will make up more than 30 per cent of the bioinformatics market by 2006, driven largely by the explosion in genomics data and in particular proteomics, which involves complex three-dimensional molecular algorithms which require large amounts of data processing. It is further anticipated that business consultancy and related services will realize the biggest growth over the period, reflecting the current embryonic nature of the Asian biotech sector.

Doak, is cautiously optimistic, however, about the short-term outlook for bioinformatics in Asia and says that of the mountains of money rumored to be in the market, much of it remains to be spent. "We all see the growth projection from analyst companies but what we are seeing in the market is that the money hasn't been spent yet," he says. There are, however, very positive signs he believes, particularly at the low end of the market, as Asian biotech organisations move to prioritise fundamental infrastructure such as desktop systems and workflow software.

Adding impetus to this is the relatively belated thawing of IT investment budgets after the double-whammy blows of the Asian economic crisis and Y2K concerns. Also highlighting the need for basic priorities, a staggering 90 per cent of new drug applications submitted to the FDA are done so manually. "This is quite unbelievable," says Doak.

Under pressure to rectify this somewhat bizarre anomaly, the FDA is currently developing an electronic applications system. The prime goal of bioinformatics, says Doak, is to create interconnected nodes of innovation which facilitate broad sharing of and access to information. He says that while isolated "islands of expertise" (such as some argue exist in Australia) have certain benefits, their progress is slow. "It's only once they become a node in the general scheme of innovation that true results will flow," he says.

Further highlighting the need for collaboration is an awareness that the ability of organisations to collect and interpret genomic, proteomic, chemical and clinical trial information will be a key differentiating factor. Biotech research employing digital in silico modelling can be carried out in a fraction of the time and for much less money than the more traditional in vitro or organic testing techniques.

"In addition to scientific expertise, the performance of the infrastructure to sequence genetic data, manage complex algorithms and manage and store these datasets with both speed, reliability and efficiency is key," IDC's report says.

Myriad sources

Analysts now point to the need for so-called 'clipboard' systems to allow biotech groups to research, share and utilise a wide spectrum of data across myriad sources. Formed in 1998 and headquartered in Singapore, APBioNet is a collaborative association which aims to foster greater communication between members of the biotech industry concerned with bioinformatics.

One of its prime concerns is the development of a dedicated communications network for the biotech industry which would employ the latest in innovative IT solutions based on open standards to speed workflow within and between academic, commercial and state controlled biotech centres.

Highlighting key aspects of the APBioNet charter, co-founder Tim Wee Tan recently described the bioinformatics user community as having come a long way, but with a long way yet to go before systems could be described as fully functional and user-friendly. "The bioinfomatics user community has gone from command-line interfaces to nice but tedious GUIs, to repetitive web form-filling and back," Tan says.

"What we need is a protocol-based recipe system that biologists are familiar with, which allows us to stitch together things we do repeatedly, and to schedule and automate the workflow processes we have to grapple with daily." APBioNet member Littlejohn has a lot of experience in setting up bioinformatics groups in Australia, with his third company, BioLateral, now realizing significant growth, albeit from a small base. BioLateral has essentially three prime areas of business which Littlejohn believes address the key technology concerns for biotech companies. The first of these relates to the development of appropriate workstation technologies and methodologies to fit clients' needs. This is supported by extensive professional training in both bio-IT and bioscience for non-biotech people, while the third arm -- technical contracting - provides the biotech organisation with an immediate body on the ground. "In a pure play bioinformatics market, services seems to be where the action is," Littlejohn says.

APBioNet recently formed a partnership with the Asia-Pacific Advanced Network project (APAN) which is expected to eventually link the DNA Data Bank of Japan (DDBJ), GenomeNet, Human Genome Centre, Japan (HGC), National Cancer Centre, Japan (NCC), Australian National Genomic Information Service (ANGIS) and MAFFIN, while also allowing individuals to exchange data and other information quickly.

It is also expected that further partnerships between APBioNet and amongst other similar groups throughout the world will support the emergence of a global biotech network, or 'bio-grid', within the next few years.

Earlier this year APBioNet became an official regional affiliate of the International Society for Computational Biology (ISCB). Last August, APBioNet vice-president Prof Shoba Ranganathan was voted as a director of ISCB, a development expected to significantly raise the profile of Asian bioinformatics. Ranganathan is also expected to play a key role in organising the ISCB 2003 Conference to be held in Brisbane next year.

Development of Australia's own answer to APBioNet has been very slow, and frustrated, Littlejohn says, by the lack of Federal government funding. "Everyone is too busy with their day jobs." he says.

But while dedicated industry bodies are seen as extremely important, commercial partnerships are expected fulfill a vital role in facilitating the uptake of homogeneous IT systems within the biotech industry. In mid-September IBM Singapore and Nanyang Polytechnic (NYP) announced a collaborative initiative directed towards helping industries, government institutions and users move to IT operating environments based on open standards. IBM's initial investment in the Singapore Open Computing Centre is approximately $S18 million with a further $S22 million earmarked for the next three years.

Pivotal to the new initiative, and a central pillar of IBM's broader range of life sciences solutions is the Lunix operating system, which is highly regarded for its reliability and easy interoperability with myriad other platforms. In 2001 alone, IBM invested around $US1 billion in developing Linux, which is expected to form the core of the 'holy grail' of the so-called global bio-grid. In much the same way that massive amounts of what would previously have been fiercely guarded data on genomics is now freely available, the Linux operating system was born of a previously untried strategy in the software business whereby developers had total freedom to access the source code, leading to rapid advances in functionality.

IBM is currently marketing a Linux-based solution for biotechs called DiscoveryLink, which allows scientists to submit a general inquiry for a patent worldwide and pull up information -- regardless of whether it is in audio, video or any other format -- and determine where they stand with their work with a high degree of certainty.

David Binning is a Sydney-based freelance writer