January 1, 2006 (Vol. 26, No. 1)

Cell culture is used in academic life sciences research, industrial drug and process development research, and the manufacture of biologic therapies, such as vaccines, monoclonal antibodies, recombinant proteins, and stem cells.

Consisting of revenue generated by the sale of media, serum, and reagents, the worldwide cell culture market is well-established with estimated revenues of $1.02 billion in 2005.

However, with over 10 cell culture-derived biologic drugs expected to be launched in the U.S. by 2010, the market will likely experience substantial growth, reaching $1.86 billion by the end of 2010. Generic biologics may also prove a significant driver in the cell culture market, but due to the current regulatory environment, it is unclear as to when generic biologics may enter the U.S. and European markets.

As a result of consolidation, the industry is dominated by a few major suppliers. Invitrogen, with its GIBCO brand, is the market leader, dominating in both research and biomanufacturing applications.

While Invitrogen is expected to maintain its market position through 2010, other leading players include Fisher Scientific and JRH Biosciences.

Fisher, with its HyClone brand, is the leading supplier of sera, while JRH is best known for its EX-CELL serum-free media. Other significant suppliers include Cambrex, Serologicals, and Sigma-Aldrich.

In the current market, there is low product differentiation, and new competitors face high barriers to entry. Since there are regulatory consequences for switching cell culture products in biomanufacturing, cell culture suppliers must penetrate the industry research segment to maximize their revenues by serving as a pharmaceutical or biotechnology companys primary vendor throughout R&D, clinical trial testing, and commercial biomanufacturing. Through 2010, there will be minimal changes in suppliers market shares and relative standing as mid-level players lack both the capacity and the market focus to fully capitalize on overall market expansion.

At the encouragement of the FDA, serum use in therapeutic biologics manufacturing is declining. In addition, serum is chemically undefined and highly variable, which complicates downstream processing and increases costs for manufacturers. While the use of serum in early research applications is likely to remain constant through 2010, serum use in the manufacture of biologic drugs will gradually be phased out.

Stem cell research is of particular importance to the cell culture market, since stem cells require cell culture for growth. In addition, media and serum used in stem cell research are priced higher than similar, non-stem cell products. Public funding for stem cell research, approved as of 2004, will increase the demand for media, sera, and reagents required for stem cell growth and research. While the largest sum of money has been approved in California, several other states, including Illinois, New Jersey, and Wisconsin, are considering similar legislation.

Navigant Consulting estimates that of the $300-million proposed spending each year for stem cell research in California, approximately $60 million will go toward cell culture media, serum, and reagents. These funds will likely become available starting in 2006 and will contribute to an increase of about 5% in overall cell culture revenue.

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