Just as the use of genomics and proteomics is rapidly changing the practice of drug discovery, those technologies are changing the experimental needs of life science researchers. As a result, the business plans of suppliers of reagents and instruments are evolving to keep up with their increasingly sophisticated customers.

The market changes have led to a burst of growth in the smaller companies trying to exploit experimental niches. At the same time, the life science supply chain may be poised for consolidation as the larger companies try to maintain their market share and name recognition. While these companies previously have been stratified along disciplinary lines such as molecular biology or immunology, the lines are breaking down as the field moves toward an application focus, where reagents and instruments for a particular experimental technique now cross disciplinary lines.

"Research tool providers traditionally fell into molecular biology, but those disciplines are getting muddied as researchers are using more tools including genomic-type tools in addition to protein separation," said Katherine Tynan, director of business development at Applied Biosystems Group (PEB, Foster City, Calif.). "Disease areas are specific for drug development, but research tools cross boundaries."

"There is definitely overlap, so there's not a black and white beginning and end to a market segment," said Susan Flood, marketing manager for molecular biology at SciQuest.com Inc. (SQST, Research Triangle Park, N.C.), which lists about 1 million products from 775 suppliers on its internet site. Thus while product areas may be quite distinct, for example consumable reagents versus laboratory equipment, the lines between traditional research areas such as immunology, molecular biology and biochemistry have blurred.

Flood added that competition between the larger supply companies is likely to increase as these companies try to expand their market and increase overlap with other companies' products. "Some of the bigger companies in the area are trying to keep a wide breadth of products as their customers become more sophisticated," she said.

Major players

The larger supply companies, which are actively moving to supply the genomics and proteomics arenas, are increasingly focused on providing a complete solution to their customers, offering an integrated package of instrumentation and reagents that work together. Such companies include PEB, Amersham Pharmacia Biotech Ltd. (Uppsala, Sweden), PerkinElmer Inc. (PKI, Boston, Mass.) and Packard Bioscience Co. (PBSC, Meriden, Conn.).