BIOPHOTONICS/MARKET ANALYSIS: The four segments of biophotonics market growth

By Jacques Cochard, Benjamin Roussel, and Carlos Lee

Future growth of biophotonics comprises the differing performance of four distinct market segments. And while the past doesn't predict the future, it does provide clues about what's to come.

Increasing interest in biophotonics among both researchers and business innovators relates to the technologies' ability to address important issues such as growth of an aging population and the need to monitor environmental dynamics, including those related to water and food sources. In fact, management of all these resources is expected to become more critical in the coming years.

A global study commissioned by the European Photonics Industry Consortium (EPIC) quantifies the market for biophotonics-based end products at $37 billion1, but this is a figure that must be used cautiously. Approximately 20 percent of this market deals with chemistry (reagents, consumables, surfaces), while software, fluidics, and mechanics within the devices represents another significant portion. This fact highlights the reality that the success of biophotonics is linked to many fields, including photon science, software development, molecular probe chemistries, reliable and reproducible nanomanufactured surfaces, accessible databases, and accurate understanding of biological phenomenon under investigation. Growth rates of individual technologies within this group vary, with some averaging 30 percent and others averaging just a few percentage points. Likewise, growth of applications ranges from the low single-digits to more than 50 percent. We can split the market according to technology introduction into four fundamentally different segments, each with its own dynamic.

Segment 1: Organic growth in mature markets

In the most mature market, which includes x-ray imaging, endoscopy, and life sciences R&D, biophotonics is likely to see only organic growth. Medical imaging is expected to grow 3 to 6 percent—between 0 and 2 percent in countries belonging to the Organization for Economic Co-operation and Development (OECD) and 10 to 20 percent in emerging economies. Since 2000, the need for tools to explore living organisms at the micro- and nanoscales has increased. With the development of genomics/proteomics along with tools for high-throughput exploration of genes and proteins, instrumentation has consumed an increasing amount of resources in terms of both money and competencies, and thus the management and sharing of research facilities has become a growing issue for an effective development of this sector. The establishment of bioimaging over the last 10 years in various countries was a strong driver for investment in biophotonics tools, enabling double-digit growth for makers of microscopes, cameras, and femtosecond lasers—even in the chaotic economic climate.2 In the coming years, however, investments in this area will likely decline.

Segment 2: More biophotonic components in devices

The number of biophotonic components used in instruments for biology and medicine is expected to increase as much as 15 to 20 percent. Growth is linked to the established market and the support of existing technologies. As an example, the newest generation of microscopes provides information by way of phase, polarization, and super-resolution techniques, all of which require a greater "bill of materials" for photonics. And photonics has potential to add value to such established technologies as endoscopy and ultrasound.

Segment 3: Replacement of established technologies

Increasingly, biophotonics-based technologies are able to replace established methods. This segment involves greater risk than the arenas discussed earlier because it offers significant resistance, so lengthy and costly validation testing and comparison to gold standards is required. But the shift is already underway: For instance, flow cytometry is replacing the 50-year-old Petri dish for fast detection of bacteria and pathogens for food and wine processing, and optical biosensors have taken hold for molecular diagnostics. During the next three years, biophotonics-based devices will be able to compete with incumbent systems, and will benefit from the high potential of applications in agriculture and food monitoring.

For the most part, even photonics-based tools that allow avoidance of fluorescence labeling are still based on traditional biological recognition elements: enzymes, antibodies, and nucleic acids. By contrast, the next 10 years will bring to market techniques capable of true label-free fingerprinting—including vibrational spectroscopy (Raman and infrared), autofluorescence-based observation, matrix-assisted laser desorption ionization-time of flight (MALDI-TOF), and light-scatter analysis. With the growth of photonics in these areas, we will see a major shift away from chemistry (surface, reagents, and consumables) to software (real-time database consultation and use of algorithms for reliable chemometry), enabling new entrants such as electronics manufacturers and information technology leaders into the market.

Segment 4: Emerging markets that leverage biophotonics' strengths

Applications that exploit the intrinsic benefits of biophotonics technologies—such as sensitivity, accuracy, noninvasiveness, and real-time operation—will enable new markets to emerge. For example, think of the fluorescence imaging market, which has come to dominate life sciences research. In the coming years, agriculture and food testing could be similarly impacted by commercial developments both in optical in-line monitoring and handheld microfluidics—possibly even smartphone-based. Such developments will launch the mobile health market in earnest and impact global health as well. The emerging markets segment is the most difficult to predict in terms of growth because there is no possible comparison to established methods and no way to gauge the most appropriate way to deliver such solutions.

What to expect

R&D may have nurtured the growth of biophotonics in recent years, but investments in this arena will likely be lower going forward. Even desktop analysis, which has been the focus of many recent mergers and acquisitions, could decrease, too. Miniaturization is now a major trend in every industry sector, including healthcare—and coupled with cost-effective devices, this trend will facilitate significant commercial development.

The biophotonics business is currently structured around a few key players and hundreds of small-to-medium enterprises and start-ups. Photonics-based technologies won't reach their potential without support from major players. Should the boost come from established players in scientific instrumentation (e.g., Philips, GE, Toshiba, Horiba, and Thermo)—or from companies established in other areas and well suited to mass-market business models (e.g., Procter & Gamble, Danone, Roche, and Google), or to solve biophotonics chip integration issues (for instance, Samsung or Intel)?

While the move from high-end dedicated systems to desktop devices was pioneered by analytics companies, it remains to be seen who will bring biophotonics devices into our homes.

References

1. Yole Développement, Tematys, and EPIC, "Biophotonics Market, Focus on Life Sciences & Health Applications" (April 2013).

2. Drawn from review of annual reports from Zeiss Microscopy, Andor, and Danaher (Leica Microsystems), 2007-2012.


JACQUES COCHARD is founder of Tematys (Paris, France; www.tematys.com), a photonics-dedicated market research firm, and a professor at école Polytechnique (Palaiseau, France; www.polytechnique.edu); BENJAMIN ROUSSEL, PharmD, is a market analyst at Yole Développement (Lyon, France, www.yole.fr); and CARLOS LEE is Director General at the European Photonics Industry Consortium (EPIC; Paris, France; www.epic-assoc.com). Contact Lee at carlos.lee@epic-assoc.com.

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