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-------------------------------------------------------------- This story was printed from ZDNet Australia. --------------------------------------------------------------
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Biotechnology in Australia By James Pearce, ZDNet Australia August 12, 2003 URL: http://www.zdnet.com.au/news/business/soa/Biotechnology-in-Australia/0,139023166,120276655,00.htm
Is it the next big thing or the next big hype? Analysts and industry observers around the world have been predicting the rise of biotechnology over the next century. At the recently concluded 19th International Congress of Genetics in Melbourne, Australia, an industry expert told 2,600 delegates that sector was undergoing a powerful growth spurt that would be long lasting. "I think this is going to be the most exciting sector for the 21st century," said Leslie Platt, head of global consultants Ernst & Young's health sciences group, according to an Australian Broadcasting Corp report. "The technology is advancing at a rapid pace, to the point where potential late-stage targets for pharmaceutical development are being identified much more rapidly, efficiently and cost-effectively than ever before," the former senior advisor to the US National Institutes of Health was quoted as saying.
According to Ernst & Young, there are 4,362 biotechnology firms--including 613 which are listed on stock exchanges worldwide. The revenue generated by the industry on a global basis increased by 15 percent last year to US$41.4 billion. Australia--the leading biotech hub in the Asia-Pacific region--is home to 38 listed companies worth more than US$5 billion, and a far greater number of unlisted companies. How will biotechnology impact our lives and the Australian economy? ZDNet Australia investigates.
Biotech in Australia: state of play The Australia-New Zealand market is considered as one of the top ten bio-IT environments in the world, according to market research statistics. Analyst firm IDC expects bio-IT adoption to increase at a compound annual growth rate (CAGR) of 37 percent, fuelled by both public and private investments as organisations adopt new biology methods in the area of life sciences. In fact, IDC research data indicates that by 2006, bio-IT spending in Australia and New Zealand will grow to US$655 million. While the the private sector dominates the Australian biotech market, it's the opposite in New Zealand, with the academia playing a major role. IDC predicts that by 2006, the private sector will increase its share of the bio-IT market, with the largest jump occurring in New Zealand, which is expected to increase its revenue share from 14 percent to 30 percent of bio-IT expenditure.
"However, ANZ is more likely to lose than gain market share in the regional bio-IT sector as other countries such as Singapore, India, China and Taiwan ramp up their investments and focus on growing their life sciences market," said Daphne Chung, senior analyst for Life Sciences and Healthcare Research at IDC. The Asia-Pacific biotech market might be right for the picking for some but other players are homing in on opportunities in Southeast Asia. Dr Mervyn Thomas, founder of bioinformatics consultancy Emphron Informatics, is one such person. Thomas hopes to concentrate on that part of the region as opposed to Australia since "more money is being invested there", he told ZDNet Australia in a recent interview. There also seems to be a longer period for return on research investments in Australia despite the country's solid standing as a research hub. "Australia has a very good reputation in the region for its scientific capability, and that's something we can build on. There's also a high regard for our skills and we do well despite the fact that our budgets are smaller," said Thomas, who used to manage the bioinformatics research programme at Australia's CSIRO Mathematical and Information Sciences. However, Australian research tends to be more basic rather than high-throughput. "I won't say less valuable, but the stuff with less immediate commercial return," Thomas explained.
Biotech in Australia: life and science The life sciences industry is being propelled by information technology, according to Tony Palanca, Life Sciences manager for IBM Australia. "The reason is that with the mapping of the genome, there's really been an explosion of data for people in the life sciences industry to manage," Palanca said. (Cambridge Dictionary describes genome as the complete set of genetic material of a human, animal, plant or other living thing.) "So to give you some examples--at the university research level, people are now not only viewing whole organisms, they're dealing with people's genetic sequences as well," said Palanca. "As humans turn in tens of thousands of DNA sequences and literally millions of protein interactions, so [we've seen] just in the last few years, the amount of data that people in research have had to deal with has exploded." An example of this is "personalised medicine"--where individuals can be genetically screened to see whether particular drugs will be effective in combating a particular condition, or whether the drugs will have adverse side effects.
For IBM, the demand for more and more powerful IT solutions from the life sciences industry has actually directed the development of its latest computer chips. "At our research labs in New York, they're working on a project called blue gene, which is an attempt to simulate protein folding," he said. "That project will build the world's largest supercomputer, and from a research perspective, it is really beginning to drive the development of new chipsets that are coming out in the future Power4 range." "In a very real sense, life sciences is now driving the development of high performance computing in IBM, and a lot of the things we learn in that research is applied in real world scenarios to the life sciences customers we serve," he added.
New revenue stream?
The life sciences sector has fairly unique demands created by its obsessive need to generate huge amounts of data and then try to make sense of it. "The major challenge facing most life sciences organisations is how to deal effectively with the massive amounts of data," said Palanca. "In one way or another, it always comes back to: there's lots of data, it's in lots of different places, how do you process it quickly, how do you generate meaning and intellectual property out of the data that exists." In order to turn data into information and get value out of it, you need fast computers, a good database, good data integration tools, and good techniques for putting queries into that data, according to Palanca. However, he warned there are some problems in dealing with the life sciences industry that need to be taken into account. "It is a very dynamic industry, and it's changing very rapidly," he said. "I think one of the real challenges for all IT providers is keeping up with the changes that really are being--to a large degree--driven by the dramatic breakthroughs that are happening at a research level. There would literally be a major breakthrough every day in this industry that have implications for many that inhabit it." "A few years ago, the area of proteomics was very small and not considered very significant, and in four years, proteomics has really changed the way a lot of science is being done. There's the potential to change the drug discovery process, and it's an area that generates enormous amounts of data," said Palanca.
"With every one of these changes there is a further explosion of data--more to integrate, more connections between different branches of the science," he said. "And if you just imagine this very steep curve of data and complexity getting steeper and steeper with every new breakthrough ... that is a challenge that is stretching the capabilities of a lot of the underlying hardware and software technologies that exist today." It seems that if you have a solution to these problems--or even a partial solution to one of these problems--there's a ready market for your wares. And of course, you're not restricted to the Australian market (which is just as well, really). "The computational technology which companies use to develop drugs or to do scientific research are the same in the rest of the world," said Martin Hilgeman, who hails from Europe and is a science expert for hardware supplier SGI. His colleague Michael Armitage, director of science for SGI Australia/New Zealand, pointed to the recent Intelligent Systems for Molecular Biology conference in Brisbane, and the fact that there were attendees from all over the world. "Australian science is no different from science in other parts of the world," Armitage said. Australian companies have a helping hand when it comes to exporting, according to Emphron Informatics' Thomas. "Austrade runs a very good system for new exporters and has all the relevant information--from mentoring to support--on its Web site. It's a class act [the Austrade set up]," he said. Market research firm Datamonitor advises companies that wish to exploit the opportunities provided by the life sciences industry to have the following attributes:
Biotech in Australia: jobs galore? If you're an IT professional interested in the booming bio-IT world, the "absolute" amount of work available is still small, warned Robert Olivier, director of Olivier e-cruitment Advisors. Olivier said there are very few opportunities in this sector which were advertised on the Internet--where most IT professionals would begin their search. "For pure programming roles in the pharmeceutical or biotech sectors, no specialist knowledge or qualifications will be required but for a business analyst role (where you are interpreting user needs for the programmers) knowledge of the biotech sector and/or a degree in a life science will be ideal," Olivier said. "There's not many people in bioinformatics with a solid training in IT or mathematics," Emphron Informatics' Thomas observed. "Most of the people working in bioinformatics started off in biology and become computer literate biologists rather than moving in the opposite direction." Thomas said if IT professionals were interested in systems development and systems architecture, they would probably have to look overseas for work since there wasn't much large scale system development in Australia. "There are plenty of support roles," Thomas noted. "There's a real risk [for] people going into bioinformatics. It's mostly public sector, and that means career development and progression are mostly based on authorship of papers." He refers to the practice among universities and other public sector scientific institutions to judge employees based on how many papers they had published in peer-reviewed scientific journals, and promote them accordingly. According to Thomas, a person entering bioinformatics without a biology background would most likely be a fourth author on a series of papers, and that wouldn't be enough to gain promotion. "Once you get into a support role in a research environment then your oppurtunities for advancement go down dramatically," he said. The biggest demand in the market at the moment is for small-scale, high-value consulting probably because there aren't many people with the right background, according to Thomas. "There are some Australian companies which are absolutely at the forefront," said Thomas. "Having said that, you can count them on one hand--the bulk are in the public sector, and the job oppurtunities are not going to be attractive to most IT graduates."
Biotech in Australia: equipment and services The hardware side of the bio-IT market is mainly the domain of the big players--after all, you don't buy supercomputers from your local cut-price computer store. According to SGI's Armitage, the main difference between first class science and other science is how fast the scientist can get through the "have data--ask question--get answer--ask new question" cycle. "The faster you can get the answers the faster you get the results," he said. When you start talking about supercomputers, you start having to consider things such as vector versus scalar chipsets, single computers versus clusters versus grid networks, and comparing the conflicting claims of the hardware manufacturers, all touting the "fastest" supercomputer around. Armitage claims SGI Altix 3000 computers have the advantage of a shared memory that is globally addressed. They offer a single system which consists of a large number of processors, giving the system a very fast interconnect. Meanwhile, IBM touts its Power4 chipset as one of the fastest chipsets for life sciences applications available today. The world of the supercomputer is highly confusing to anyone not intimately associated with it, according to Philip Tannenbaum, manager of the Joint Bureau of Meteorology/CSIRO High Performance Computing and Communications Centre (HPCCC), which recently upgraded its weather forecasting supercomputer. He told ZDNet Australia that supercomputers normally only attain a low percentage of their advertised peak performance. "The other model that life sciences organisations use is Linux clusters," said IBM's Palanca. Clusters have the benefit of creating a lot of processing power for relatively little cost, but SGI's Armitage is skeptical that this is the best method. "A lot of people who have purchased clusters for major science applications tell us they are spending 25 percent of their time looking after the clusters. They're not doing science, they're doing computer science," he said. "There'll be no Nobel prize for an institution if scientists are spending 25 percent of their time on computer [maintenance]." Another system used for high throughput computing is grid computing, which parcels out portions of a heavily number-crunching project to a large number of different computers over the Internet. Grid computing has definite advantages, being cheap and (theoretically) having limitless processing power. However, apart from finding people to donate "computer time" to the project, grid computing can run into trouble authenticating data, as SETI@HOME discovered last year. Of course, not everything in a biotech company has to be high-end. The Datamonitor survey revealed that areas most likely to be outsourced by large life science companies are desktop maintenance, hardware maintenance and procurement. Levels of outsourcing in the bio-IT arena are set to increase, according to Datamonitor, but biotech companies are skeptical of claims made by vendors as to what their products can do and how much money they can save. On the software front, since most tools commonly used were originally developed at universities, it's usually open and freely available. The "free" mentality makes selling software quite difficult, said Emphron Informatics' Thomas. "A lot of the work is in the public sector and that means it has a certain character," said Thomas. "Fairly restrictive budgets, an emphasis on research grade software rather than production grade software...What we don't see very much in Australia is enterprise-scale bioinformatics systems. What we see a lot of is bioinformatics applications targeted at relatively small research groups, and what we don't have in Australia is substantial enterprises with vast data resources requiring expensive infrastructure to keep them working." Meanwhile, the services segment could well be a major growth area in IT spending by life science companies. Market research firm Gartner has predicted that by 2005, one third of IT revenue from life science companies will derive from services and solutions for the research and development process--which is a marked shift from a few years ago when the majority of investment was in enterprise applications such as finance, human resources, supply chain management, CRM, drug marketing and pricing. And with Australia's biotechnology industry tipped to exceed US$5 billion, perhaps this "new" area will prove to be the country's next leading growth engine.
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