September 15, 2006 (Vol. 26, No. 16)
In August 2002, Kalorama Information published the first edition of a report called “Medical and Biological Sensors and Sensor Systems: Markets, Applications and Competitors Worldwide.” Kalorama projected that the world biosensor market in 2005 would be near $2.3 billion. Revisiting this topic in 2006, the results of the second edition show an even better market picture, with actual revenues more than 25% above that projection. According to the current research, worldwide revenues for biosensors reached nearly $2.9 billion last year.
The surprising results stem from a number of unexpected developments. The most significant change in the market climate has been the breadth and depth of biosensor technology’s penetration into non-medical applications. Medical applications—especially the “killer app” of biosensors, glucose testing—have been the backbone of the biosensor industry, accounting for the majority of revenues.
More than 60% of the biosensor industry’s revenue is attributable to clinical applications including glucose, cholesterol, and coagulation monitoring. However, this percentage is down significantly from earlier projections, some of which projected medical application at more than 90% of revenues.
Surely some of the discrepancy among research findings can be attributed to the shifting definitions of what a biosensor really is. But the real changes in the market environment evolved from rapidly advancing technologies and some serious business challenges.
On the technology front, advances are too numerous to fully elucidate here, but biosensor products have evolved to be more optics-based and less electrochemical than projected. And during the last four years, the direction of biosensor R&D significantly changed in response to new biotechnology innovations in biocomplementary chemistry, surface characterization, molecular markers, and nanotechnology.
Microelectronics, embedded circuits (smart sensors), microelectromechanical systems (MEMS), and integrated optical MEMS have solved most sensor sensitivity problems. Also, progress in multiple sensor systems—each at different locations that communicate with one another, locate each other, and make decisions without the need for each to communicate to an external control center—may soon provide a means for simultaneously evaluating multiple markers instead of just one, which will have a major impact on clinical diagnostics and therapeutic monitoring. Microminiaturization trends will only enable these emerging technologies to expand their applications.
The business and regulatory challenges of biosensor commercialization have also pushed the market in unexpected directions. In spite of many commercial successes, commercialization of sensors for the chemical, bioprocessing, and clinical diagnostic industries is limited in comparison with research results. Commercialization of most chemical sensor and biosensor technologies has continued to lag behind research by several years. In addition, biosensors must compete with existing technologies, and cost is a major determinant of adoption.
It can take five years and cost more than $40 million to get a medical sensor to the marketplace. Poorly capitalized sensor developers can go out of business before achieving commercialization. Even medical device companies, whose regulatory approval processes may be streamlined by having 501-K status, find it difficult to compete in this regulatory climate.
These circumstances have led some companies to divert some or all of their resources to developing biosensors for industrial or environmental markets. The substantial overlap between medical and nonmedical sensing technology makes this possible. Thus, a firm developing biosensors for measuring lead in blood could, after improving sensor sensitivity, move from ppm biological lead determinations to ppb environmental sensing.
The merger of biotechnology, microelectronics, MEMS, optical MEMS, and wireless technologies has yielded an explosion of innovative new devices, not the least of which is medical sensors and biosensors. New products and applications are starting to move through the development and regulatory process.
Steven Heffner is the publisher of Kalorama Information, a New York-based publisher of market research in the life sciences. “Kalorama’s Medical and Biological Sensors and Sensor Systems: Markets, Applications and Competitors Worldwide, 2nd Edition” was published in May 2006. For more information: www.kaloramainformation.com.