Intelligent Enterprise

Put Your Big Blue Genes On

High-tech industry leaders are moving into the biotech market at an accelerating rate, as researchers continue to find new applications for IT products and services in scientific fields. IBM, Compaq, Agilent Technologies Inc., and Motorola are among the vendors to have recently launched ambitious projects aimed at cashing in on the lucrative scientific computing field, where enterprise-level performance is sustained through high demand and lots of cash. Many of the IT companies entering the biotech market are developing both hardware and software components, as well as tools for conducting the advanced data analyses necessary to leverage genetic data.

IBM's newly formed Life Sciences business unit announced plans in late 2000 to build a 7.5-teraflop, DB2-based supercomputing cluster with NuTec Sciences to investigate how genes interact in the human body to influence disease processes. IBM has also pursued partnerships with other biotech companies; such as providing its DB2 Universal Database, WebSphere Web application server, and server clusters to Structural Bioinformatics Inc. for 3D protein-modeling projects that will enhance pharmaceutical research. Based on its own projections that the market for IT solutions for life sciences will rise from $3.5 billion in 2000 to more than $9 billion by 2003, IBM recently seeded its life sciences effort with $100 million to form alliances with biotech companies to develop IT solutions for interpreting complex genetic data.

Compaq has also raised the biotech stakes by investing $100 million in early-stage life sciences companies devoted to genomics and bioinformatics, two emerging scientific disciplines that manipulate and analyze genetic data. Compaq hopes its investment will spur growth in life sciences discoveries and raise demand for its AlphaServers and StorageWorks systems, which are already used at prominent genomics enterprises, such as the National Institutes of Health's Human Genome Project (HGP), where scientists have mapped human genes by analyzing vast collections of genetic data. Oracle has carved footholds in another area where IT solutions come into play - detailed analysis of the clinical trials data necessary to gain U.S. Food and Drug Administration (FDA) approval for new drugs.

Brian Sager, a life sciences strategy consultant, commented on the biotech-IT convergence phenomenon in Ernst & Young's Convergence: The Biotechnology Industry Report, Millennium Edition. According to Sager, cross-industry technology hybridization is "rapidly progressing in a self-propagating loop," that extends to marketing strategies as well. "Many companies within the biotech industry have been extensively interacting with high-tech companies and utilizing technology originally developed outside of the traditional biotech market. This convergence is creating a hybrid marketplace that leverages the strategies, techniques, and business models of formerly disparate markets," Sager said.

Scott Morrison, Ernst & Young's national lead analyst for health sciences issues, said the market for biotech IT solutions has only just started to expand, and he anticipated continuing strong demand for high-performance solutions in this sector. "The HGP claims to be 90 percent complete, but there's so much analysis that needs to be done, not only on genes, but on proteins and SNPs," said Morrison, referring to single nucleotide polymorphisms, elements of genes that vary from person to person. Analyzing the proliferating volume of data on proteins and SNPs will help scientists design more effective drugs and medical treatments based on genetic differences among individuals, according to Morrison.

To help obtain and analyze the massive quantities of data needed for biotech/IT projects, Motorola and Hewlett-Packard's Agilent spin-off have taken different tracks into the biotech world - tracks that involve development of silicon biochips (also known as microarrays and bioarrays) as research tools for analyzing thousands of DNA samples at once and rapidly generating large amounts of genetic data. Motorola's BioChip Systems unit, launched in 1998, has recently signed deals with numerous biotech firms to commercialize its CodeLink Expression System, which consists of biochips, instrumentation, chemical reagents, and analysis software.

Agilent's Biosciences Products unit also announced a microarray manufacturing initiative in late 2000, and in January 2001 opened a 15,000 square-foot microarray production facility in Santa Clara, Calif. Agilent said that the new facility uses production techniques based on inkjet printer technology and will be producing more than one million microarrays per year by 2002. In August, Agilent also created a focused Life Sciences Business unit to capitalize on opportunities in pharmaceutical, agricultural, genomics, and academic markets.

According to Elaine Mansfield, author of an October 2000 report from the Multimedia Research Group Inc. entitled "U.S. Microarray/DNA Chip Industry: Current Status and Future Outlook: 2000-2010", the confluence of biotech and IT will result in more opportunities for entrepreneurs. "Many silicon and biotech innovators are targeting entirely new markets. The marriage of chip technology and knowledge from the HGP gave the industry a substantial opportunity to leverage its knowledge base and attack entirely new medical challenges," Mansfield said.