Evaluating Business Intelligence Opportunities in the Pharmaceutical Industry (Strategy Focus)

Transcription

1 STRATEGY FOCUS Evaluating Business Intelligence Opportunities in the Pharmaceutical Industry (Strategy Focus) A strategic sales model for BI solutions in Big Pharma and Biotech Reference Code: BFTC1675 Publication Date: May 2007 DATAMONITOR VIEW CATALYST Scientific and technological advances are forcing the pharmaceutical industry to shift towards translational medicine and integrate technology, including IT, earlier in the product life cycle. SUMMARY As market pressures demand increased innovation and shorter time-to-market product lifecycles, pharmaceutical companies are evaluating alternative business models, focusing on technologies such as business intelligence (BI) tools - for translational medicine. Vendor strategies targeting pharmaceuticals with BI solutions must consider the following: Market factors are driving adoption of translational research and specifically BI solutions; BI opportunities exist at several levels within the pharmaceutical market; and BI vendors with high market readiness will realize the most success in the pharmaceutical industry. METHODOLOGY Industry opinion research End-user research Secondary research Briefings with leading technology vendors serving the pharmaceutical market. Interviews with technology decision-makers and scientific directors. Industry associations, government data, international organizations, existing Datamonitor research. Datamonitor. This brief is a licensed product and is not to be photocopied Page 1

2 ANALYSIS Market factors are driving adoption of translational medicine and specifically BI solutions Fueled by the need to harness innovation and move towards a patient-centric healthcare model, the pharmaceutical industry is re-thinking traditional research and development (R&D) processes and shifting towards translational medicine. The pace of the transition to translational medicine will largely depend on the ability of technology vendors to offer solutions that address the unique requirements of the pharmaceutical industry. Vendors that align their products to the specific pain points of the pharmaceutical market and support translational medicine will not only increase their market share but also drive the more widespread adoption of translational medicine in the industry. External pressures are driving pharmaceutical companies to embrace translational research The influx of data delivered from the decoding of the human genome and the realization that this influx has not resulted in a proportional increase at the other end of the drug development pipeline, is the original impetus towards translational medicine. The industry has recognized the need for technologies that could mine, analyze and translate the archipelago of data from the Human Genome Project into specific therapeutic drug targets. The deepening R&D productivity crisis that characterizes today s pharmaceutical development pipelines, requires the industry to validate and predict the clinical attributes of a drug earlier in the product lifecycle. Predictive modeling technologies and other BI tools promise to help the industry reduce the attrition rate of their drug pipelines. Translational medicine aims to address the imbalance between the number of disease targets and therapeutic agents and enrich the drug pipeline by allowing scientists and clinicians to make associations between a drug and a disease earlier in the drug development process. Both cultural and technology barriers slow the progress of translational medicine Despite the forces that are driving the adoption of translational medicine, several barriers still exist. Particularly in the US, the pharmaceutical industry has been historically resistant to change and reform. The high profit margin has protected the pharmaceutical drug development from economic pressures that would typically force an industry to reform. Another reason is the highly regulated nature of the industry that makes it challenging to revise and establish new protocols. Furthermore, the traditionally silo-ed structure and communication gap of the pre-clinical and clinical departments of pharmaceutical organizations inhibit the uptake of translational medicine. Although these inhibitors slow the adoption of translational medicine, Datamonitor believes that in the long term the market will shift towards the novel drug development paradigm of translational medicine. Selling BI solutions for translational medicine in the pharmaceutical industry requires market readiness Although technologies for translational medicine, such as data analytics and other BI products, is a growing market, vendors must prioritize market opportunities, keeping in mind that the pharmaceutical industry requires solutions that can demonstrate domain expertise in the drug development process. Vendors whose capabilities and solutions match the market s needs, namely vendors with market readiness, will be most successful with their pharmaceutical clients. Datamonitor. This brief is a licensed product and is not to be photocopied Page 2

3 BI opportunities exist at several levels within the pharmaceutical market As the pharmaceutical industry Big Pharma and Biotech strives to increase innovation and improve efficiencies, technologies that link upstream with downstream data are taking center stage. Datamonitor expects that the market for BI solutions will grow over the next five years as a result of the industry investing in data integration and data analytics solutions to integrate silo-ed departments within its organizations. Ultimately, BI solutions will help the industry translate heterogeneous data and link scientific patterns with clinical outcomes for patients. Both the Big Pharma and Biotech sectors are looking to IT solutions to drive efficiency, quality, safety and productivity. Nonetheless, a closer look into each segment indicates that the market opportunity differs not only between the two sectors, but also across end-user groups R&D, clinical, manufacturing, sales and marketing. Vendors must be cognizant of such differences since each target market may represent not only a different opportunity in terms of market size, but different business needs as well. For example, as larger organizations than Biotech firms, Big Pharma companies are characterized by terabytes of unstructured and silo-ed data. A marketing message for a BI solution that focuses on flexible data warehousing and storage capabilities will resonate most with the Big Pharma, but not necessarily with the Biotech customer. It is therefore important that go-tomarket strategies incorporate customized messages that speak to the unique needs of the Big Pharma or the Biotech segment. Big Pharma and Biotech are distinct sectors with similar pain points, which differ in scale The Big Pharma and Biotech sectors are oftentimes considered two separate industries due to several distinct characteristics. When formulating a go-to-market strategy for the pharmaceutical industry, vendors must understand the differences between the two sectors, and how their distinct attributes result in different technology purchasing decisions. Because of their larger size (number of employees and revenues), Big Pharma has historically invested more in technology than Biotech. Specifically for BI solutions, the Big Pharma sector is handling a larger amount of data than the Biotech, as it operates in more geographies and covers a wider range of therapy areas. As a result of its wider scope, Big Pharma runs a greater number of clinical trials globally, representing a significant influx of data. Alliances or acquisitions with Biotech represent another source of data for Big Pharma. Known for their innovation and agility, Biotech companies make for an attractive partner or acquisition target for a Big Pharma. For example, AstraZeneca s most recent acquisition of MedImmune for approximately $15 billion indicates the on-going M&A activity between the two sectors. Such acquisitions add another layer of data to the Big Pharma pipeline and an additional reason for investing in BI tools to harness that information. In contrast to Big Pharma, the Biotech sector is narrower in its geographic and therapeutic scope and in data volume as well. Nonetheless, spending on BI solutions by US Biotech firms is projected to grow at double digit compound annual growth rate (CAGR) , at 11.4%, compared to US Big Pharma at 5.2%. The strong growth rate in BI spending in Biotech mirrors the sector s strong growth in R&D spending, implying that opportunities in that market should not be overlooked. The Big Pharma sector is expected to spend the most in BI solutions over the next five years Datamonitor analysis of the pharmaceutical market shows that the US Big Pharma sector spent approximately $181 million on BI software and services during 2006, compared to $33 million by the US Biotech sector. Datamonitor estimates that BI spending by Big Pharma in the US and Europe will reach $555 million by 2012 at a five-year CAGR of 6.7% (Figure 1). The two regions, US and Europe, are similar in their BI spending such that Big Pharma in Europe spent approximately Datamonitor. This brief is a licensed product and is not to be photocopied Page 3

4 $178 million in BI solutions in 2006 compared to $181 million in the US. The European and US Big Pharma segments represent a significant market opportunity in terms of market size mainly because they are composed of large organizations. Both are expected to invest in data warehousing and data analytics to integrate and analyze information from multiple and varied data sources. These companies accumulate vast amounts of data through global discovery projects, numerous clinical trials, and post-marketing activities. Datamonitor believes that these factors create a more pronounced and immediate need for BI tools across the product lifecycle in the Big Pharma sector than in the Biotech sector. Therefore, for technology vendors selling to the pharmaceutical industry, the aforementioned market sizing figures represent a solid target market. Figure 1: The Big Pharma sector is the largest market opportunity in BI solutions ($ spent) $ million Europe Big Pharma US Biotech US Big Pharma Source: Datamonitor D A T A M O N I T O R Enterprise-class BI solutions have the power to evolve with an organization s changing business needs Today, the majority of Big Pharma and Biotech firms are global, operating in different regions, different languages, conducting a variety of research and gathering a tremendous amount of heterogeneous data. Particularly in the early phases of the product lifecycle, where workflow processes and scientific tools vary, reaching a single point of truth about a drug candidate remains a challenge. It is during the early discovery phases of drug development target identification and target validation that several teams working on the same project are producing an influx of heterogeneous data, such as genomic, proteomic and toxicogenomic data among others. The challenge of reaching a single point of truth becomes even greater in the context of a global company, where laboratory processes and information management systems are varied. As a result, a growing number of companies are turning towards enterprise-class BI solutions that provide a Datamonitor. This brief is a licensed product and is not to be photocopied Page 4

5 common underlying architecture and end-user interface and integrate data from different laboratories both research and clinical. The pharmaceutical industry and particularly Big Pharma will value BI products that are scalable across multiple departments and help the organization to establish global protocols and streamline workflows. It is important to note that linking data under one global system within the organization does not imply the need to adopt a horizontal solution. Namely, the purchase of an enterprise-class BI functionality must not be at the expense of domain specificity. To the contrary, each BI tool must reflect domain expertise and make sense in the hands of different end users, such as scientists in R&D, physicians in a clinical trial or sales representative in sales. The challenge for vendors offering enterprise-class BI solutions for translational medicine is to keep costs associated with professional services at a minimum. Datamonitor research indicates that both Big Pharma and Biotech customers value BI products that have low service costs, particularly after the initial implementation phase. Vendors must be aware that for pharmaceutical companies usability is a key technology component, and therefore BI products that require significant professional services support are not likely to be adopted. Datamonitor believes that an enterprise-class solution will allow for flexibility and usability of the technology needed without a major services component. Figure 2: BI spending by technology (services vs. software) $ million services software Source: Datamonitor D A T A M O N I T O R BI spending by end-user group in Big Pharma and Biotech differs significantly BI solutions for translational research must not only provide a holistic view of drug development data, but also support different types of end users and in effect fulfill certain technology criteria (for additional information on this topic please Datamonitor. This brief is a licensed product and is not to be photocopied Page 5

6 reference Datamonitor s recent report, Enabling Translational Medicine with BI, BFTC1676). When assessing the market opportunity for BI investments from an end-user perspective, Datamonitor believes that there are significant differences between the Big Pharma and the Biotech sectors. As Figure 2 shows, the main end-user group within the Big Pharma sector is clinical departments with an estimated market size of $154 million in Sales and marketing represents the second largest market in that segment, at an estimated spending of $90 million during the same year. In contrast, in the Biotech segment, R&D end users make up the largest group since many Biotech companies outsource clinical as well as sales and marketing projects. The implications of BI spending varying between end-user groups in Big Pharma and Biotech are two-fold. First, from a technology perspective, vendors must ensure that a BI solution can address the needs of different end-user groups. A scientific BI solution fit for translational research must not only provide a holistic view of drug development data, but also support different types of end users and in effect fulfill certain technology criteria, such as usability, scalability, integration and collaboration. Secondly, from a strategy perspective, marketing messages and sales efforts should be customized to reflect how a particular solution improves workflows in the clinical or sales and marketing group in a Big Pharma or in the R&D processes in Biotech. Figure 3: Big Pharma will spend more on BI tools for clinical and sales & marketing application than Biotech BI Spending in Big Pharma by End-User Group BI Spending in Biotech by End-User Group $ million 300 $ million R&D Clinical R&D Clinical Manufacturing Sales & Marketing Manufacturing Sales & Marketing Source: Datamonitor D A T A M O N I T O R Datamonitor. This brief is a licensed product and is not to be photocopied Page 6

7 The industry requires vendors with high market readiness in translational medicine Although the above market information on market size is an important component of any vendor strategy, Datamonitor believes that a successful evaluation of market opportunities for BI in the pharmaceutical market includes an assessment of both the actual market environment, namely the size of the market and its competitive landscape, as well as the vendor s capabilities within this market. Datamonitor defines market readiness as the fit between the market environment and the vendor s capabilities to execute. The following framework is offered as a baseline in evaluating BI opportunities for translational medicine in the pharmaceutical market. Market sizing information is necessary but insufficient for identifying which sector to target Having market size information is important when formulating a go-to-market strategy. Market sizing information offers initial insight about the market and a baseline view based on growth rates but not about the market s nature, for example whether the market is mature or immature, or about the competitive landscape. Therefore, market sizing knowledge may be necessary but it is not sufficient. A successful vendor strategy is based on several other criteria that encompass both macro and micro-environmental factors. In addition to market sizing information that forms the basis of the evaluation framework (Figure 4), vendors must also consider the technology decision-making process within individual companies as well as the competitive environment. Datamonitor suggests that this base-line information is considered in combination with four criteria, which compose a vendor s market readiness (Figure 4). Vendors should consider four criteria when evaluating market opportunities Datamonitor offers the following four criteria that can be used as an evaluation framework for assessing opportunities for BI solutions in the pharmaceutical space: Market presence Industry-specific solutions Partnership strategy Specialized sales enablement & support As Figure 4 shows, these criteria are inter-dependent so that each must be considered within the context of the remaining three. Datamonitor. This brief is a licensed product and is not to be photocopied Page 7

8 Figure 4: A framework for evaluating BI market opportunities in the pharmaceutical industry Specialized sales support Partnership strategy Go-to-market strategy Industry-specific Market presence solutions Vendor Market Readiness Competitive environment Technology decision-making process w/in companies Market size of BI solution in pharmaceutical industry Source: Datamonitor D A T A M O N I T O R Market presence influences client perception about a BI solution and its vendor Market presence, or the degree to which a vendor is physically and intellectually established in a market, consists of several components such as brand strength, customer base and geographic coverage. Together, these components reveal a vendor s overall experience within the pharmaceutical space. Brand strength may result from occupying mindshare and expertise in a different market but carries over to the targeted market as well. For example, horizontal technology vendors, such as IBM or HP, have a strong market presence and mind share in the technology sector. Yet, the IBM and HP brand is widely recognized in the pharmaceutical sector as well and strengthens each company s sales and marketing activities in that vertical. Vendors that cover several geographic regions can also achieve strong market presence. Particularly in the pharmaceutical market, where the majority of Big Pharma and Biotech companies are global, being present in several geographies adds to vendors credibility in providing clients with products and services where and when needed. In addition to brand strength and geographic coverage, a vendor s market presence in the pharmaceutical market can be defined by its vertical-specific customer base. Having established relationships with Big Pharma and Biotech customers paves the way to expanding the customer base and strengthening the vendor s market presence. An established customer base should be used as a source of reference accounts, since strong references provide essential credibility with peer organizations. While market presence is an important criterion for evaluating market readiness and assessing whether an opportunity to sell BI solutions to the pharmaceutical market should be pursued, market presence should be evaluated in the context of three additional criteria as discussed next. Datamonitor. This brief is a licensed product and is not to be photocopied Page 8

9 Industry-specific solutions reflect domain expertise Apart from market presence, market readiness is also a function of how well vendor solutions align with market needs. In Enabling Translational Medicine with BI Datamonitor argued that in order for the pharmaceutical industry to make a successful transition to translational medicine, it requires a scientific BI tool. In effect, BI solutions targeting the Big Pharma and Biotech sector must reflect domain expertise. A scientific BI tool is built around the complexity and diversity that characterizes a single pharmaceutical company and includes technical features that support different types of end users - research directors, principal investigators (PIs), bioinformaticians, or sales representatives. Different feature functionalities include usability, scalability, integration and collaboration. Offering all functionalities in a single BI solution gives different groups within the organization the flexibility to utilize BI solutions to support their decision making processes. Industryspecific solutions may originate from horizontal solutions, which are later customized to the pharmaceutical sector. Datamonitor believes that the origin of these products is not as important as their functionality. Whether or not products were designed from a horizontal solution or exclusively for the pharmaceutical vertical is not as relevant as whether the product meets the clients requirements. A product portfolio consisting of scientific BI tools or a portfolio that is evolving towards a pharmaceutical-specific solution contributes to a vendor s market readiness for approaching Big Pharma and Biotech clients successfully. A sales force with industry experience will resonate with pharmaceutical clients Offering industry-specific solutions and having a strong product portfolio capability does not translate to market readiness unless products are sold to target clients and further supported upon client request. Attaining an experienced sales force to promote and support BI solutions for the industry is an essential component of a vendor s successful go-to-market strategy. Pharmaceutical organizations expect sales representatives to be knowledgeable as well as understand their unique needs. Sales representatives that have experience working with Big Pharma and Biotech companies resonate more with peer organizations as they are able to communicate how BI products address specific industry challenges. The pharmaceutical industry maintains a strong culture within its own walls: scientific terminology mixed with industry jargon and a deep sense of intellectual property (IP) often create an invisible veil of reservation and suspicion and can be barriers to a sales representative who has not dealt with this industry. Furthermore, a sales force that is not qualified to meet the industry s expectations reflects poorly on the vendor and lessens the credibility of that vendor. Thus, recruiting qualified sales representatives and ensuring a specialized sales force team to support clients is an essential criterion that also reflects on the vendor s domain expertise. Partnerships with niche vendors or academic medical centers (AMCs) build credibility Building credibility and proving domain expertise in this case deep knowledge about technology solutions for translational medicine - to the pharmaceutical sector can result from different strategies. For example, as discussed earlier, an established customer base, a portfolio of industry-specific solutions or a specialized sales-force team build a vendor s credibility and reflect the vendor s commitment to the pharmaceutical vertical. Domain expertise can also be attained indirectly, through partnerships with niche vendors or AMCs. Strategic alliances with niche vendors contributes to asset value formation and enables players to exchange or share business development or innovation driven activities without the need for high upfront investment, while helping them to grow and gain competitive advantages. Managing a niche vendor alliance should be partnered with internal development programs to optimize portfolio development. Furthermore, by externally sourcing assets, vendors can complement existing businesses and allow the company to maintain a competitive Datamonitor. This brief is a licensed product and is not to be photocopied Page 9

10 edge. Vendor partnerships allows for each company to complement their market readiness. For example, a horizontal vendor without industry-specific capabilities such as a specialized and experienced sales force can strengthen its market readiness by partnering with a niche vendor selling to the Big Pharma or Biotech. Similarly, niche vendors who lack market presence, such as distribution channels in different regions, will benefit from partnerships with horizontal vendors who have strong market presence in those regions. As such, the role of strategic partnerships with other vendors as part of building market readiness is becoming increasingly critical. Alliances with academic medical centers (AMCs) can also help technology vendors build credibility and domain expertise by putting BI solutions into practice. AMCs combine a clinical environment (university hospital) for patient care with basic scientific research. AMCs aim to advance scientific knowledge, turn that knowledge into preventions or treatments for patients, improve physician skills and use IT to enable those goals. Today most AMCs have established departments dedicated to translational medicine, which also serve as a potential revenue source for the university, by licensing out promising therapeutic drug targets to the industry. Datamonitor believes that partnering with an AMC to support its translational medicine efforts can help vendors improve and further develop BI solutions according to end user needs. Finally, partnerships with AMCs help vendors address some of the challenges associated an emerging and immature market that is translational medicine. BI vendors with high market readiness will realize the most success in the pharmaceutical industry The pharmaceutical industry continues to operate within an environment of high risk. Most pipeline products are destined to fail and only a small proportion will reach the market. The time and cost associated with developing a single drug mandates that pharmaceutical companies make the right technology decisions. Technological complexity is a constant challenge for pharmaceutical companies, and particularly for technology decision-makers who are called to select the right technology products that can evolve along with the dynamic nature of pharmaceutical research. Because many projects fail because of wrong technology selection rather than because of inappropriate R&D management practices, pharmaceutical companies expect technology solutions and in effect their vendors to meet high standards. Failed projects within this industry translate to years, rather than weeks or months, of research and investments of hundred of millions. Pharmaceutical companies expect to work with technology vendors who can prove they understand the business challenges of this industry and can show domain expertise through their products. Datamonitor believes that the most successful technology vendors in the pharmaceutical industry will have high market readiness, with products customized and aligned to the unique business challenges of their Big Pharma and Biotech customers, strong reference accounts across the US and Europe, and proven domain expertise through partnerships and internally developed capabilities. A number of vendors have implemented successful strategies for BI in pharmaceuticals Translational medicine is still a nascent market for BI investments. As pharmaceutical companies implement technology to reform their drug development process, BI solutions are typically a second generation technology investment. After companies have purchased and deployed technology solutions to automate and standardize workflows, they then look for solutions that provide the tools to leverage data captured by these systems. Despite the immaturity of the pharmaceutical market in terms of BI, particularly in the early drug development phase (R&D and clinical), a number of vendors have successfully penetrated the market to sell solutions to Big Pharma and Biotech. Datamonitor. This brief is a licensed product and is not to be photocopied Page 10

11 The current competitive landscape for BI vendors in the pharmaceutical industry is diverse, consisting of players with varying technology portfolios and market approaches. Some vendors provide organizations with horizontal BI tools to integrate, analyze, report and measure performance data while other vendors offer development environments (platforms) so organizations can build BI applications suited to their unique needs. Furthermore, some vendors supply a full suite of BI tools while others specialize in one or two technology areas, such as reporting or predictive analytics. Key BI vendors serving Big Pharma and Biotech customers globally include Genstruct, GenoLogics, Oracle and SAS. This section offers profiles of selected vendors in this market. These vendors were chosen to provide a representative sampling of BI vendors in terms of size, technologies offered and market focus and are presented in alphabetical order. Each vendor was evaluated based on the market readiness framework; a score on a scale of 1 through 4 (1=poor, 4=best pf breed), was assigned to each vendor for their market presence in translational medicine for the pharmaceutical vertical, for their industry-specific BI solutions, their partnership strategy and their sales enablement and support capabilities. As Figure 5 shows, the selected vendors are leading the BI market for translational medicine, each through their own strengths. Overall, niche vendors such as Genstruct and GenoLogics, are leaders in industry-specific BI solutions as their entire product portfolio is dedicated to the pharmaceutical market and their solutions reflect domain expertise. Horizontal vendors, such as Oracle and SAS, leverage their expertise in enterprise applications and analytics respectively to bring industry-specific solutions to market, comparable to solutions offered by niche vendors. In addition, horizontal vendors leverage their brand strength and years of experience in the technology sector to the pharmaceutical industry. Datamonitor believes that Figure 5: Both horizontal and niche vendors offer valuable BI solutions for translational medicine Vendors listed alphabetically Market Presence Pharmaceutical- Specific BI Tools Partnership Strategy Sales Enablement & Support GenoLogics Genstruct Oracle SAS 1= poor 2 = average 3= good 4 = best of breed Source: Datamonitor D A T A M O N I T O R Datamonitor. This brief is a licensed product and is not to be photocopied Page 11

12 Genstruct Founded in 2002, Genstruct is a computational systems biology company focused on identifying mechanisms for drug efficacy (mechanistic pharmacology) and toxicity (mechanistic toxicology) using a proprietary technology platform. Genstruct s core capabilities lie in the company s main solution, Causal System Modeling, a platform that enables mechanistic modeling of drugs in development. Genstruct's platform combines causal models, based on known information about relationships between biomolecules, with the company s proprietary platform, which links upstream causal events with downstream consequences and vice versa. By enabling simulation of causal events based on logical scientific reasoning, Genstruct s technology offers a true scientific BI tool for translational medicine. The company has long-standing partnerships with top-tier pharmaceutical companies, such as Pfizer and GSK, biotechnology companies and AMCs. In fact, unlike other vendors, Genstruct does not sell its solutions. Instead the company offers different types of collaborative research agreements, including strategic partnerships. These partnerships may result in a technology license option, where partners license elements of the technology platform and integrate those into their R&D workflows. Overall, Genstruct has a strong mind share in the translational medicine market and offers specialized BI solutions that are customized to individual customers. Genstruct has room to improve its market presence in the pharmaceutical space, in terms of geographic reach and brand strength, by leveraging its domain expertise in this niche market. GenoLogics Life Sciences Software Inc. (GenoLogics) A privately held company founded in 2002, GenoLogics, develops lab and data management software for the life sciences industry. The company s products help life science laboratories specializing in the field of proteomics, genomics and systems biology research, to manage, integrate and analyze volumes of scientific data. GenoLogics offers a data integration and lab management platform solution, OMIX that is highly specialized for life sciences. This solution is a research laboratory informatics platform that can be used across scientific departments. OMIX facilitates integration to clinical systems (such as electronic medical records - EMR) and data mining for cross-science data analysis. GenoLogics industry-specific solutions are best-of-breed, designed with the translational medicine paradigm in mind. The company supports all of its products with expert staff that covers both the North American and European markets. Committed to open systems and supporting standards initiatives, GenoLogics has established partnerships with several software and technology vendors such as IBM Life Sciences and Oracle, and standards organizations to pursue that vision. Furthermore, GenoLogics is an innovative software company and the recipient of several industry awards including the Frost & Sullivan 2005 Drug Discovery Technologies Award. By improving its brand and expanding its customer base, GenoLogics has room to improve its market presence and take advantage of its domain expertise in life sciences data management. Oracle A thirty-year old company, Oracle offers applications, middleware solutions and database technology across the value chain of the pharmaceutical industry, with a greater focus on the clinical and commercial side. Oracle combines its global footprint in the enterprise application market and its strength in the technology areas adjacent to BI to great effect. With an established pharmaceutical customer base, wide geographic coverage and significant brand recognition, Oracle has a relatively strong market presence in BI solutions. Oracle offers a number of industry-specific Datamonitor. This brief is a licensed product and is not to be photocopied Page 12

13 solutions and it also relies on partnerships with niche vendors for data analytics tools targeted for R&D. In addition, Oracle s database technology is used in the pharmaceutical industry for storing and managing data as well as for data mining and predictive analytics applications. With its patient-centric applications Oracle is well positioned to provide the much needed data management and BI solutions required for translational medicine. The company is active in partnerships with AMCs and has a dedicated vertical sales team to support its pharmaceutical clients. As a horizontal vendor, Oracle would benefit further by expanding alliances with niche vendors to support its vertical expertise in translational medicine. SAS Founded in 1976, SAS, one of the largest privately owned software companies, has been a dominant player in the BI and analytics space for a long time. SAS has strong BI tools for clinical applications and has also developed a statistical discovery software tool, JMP Genomics, which links statistical analysis with advanced graphics to provide a comprehensive picture of research results in R&D. In addition, SAS Drug Development offers a suit of products that allows researchers to integrate molecular information with clinical outcomes. Most of the company s BI tools for R&D and clinical are based on horizontal products which are customized to specific end users and applications within a scientific environment. Overall, SAS has a strong BI platform, which scales and manages data. With its wide geographic reach and experience in the life sciences SAS has a solid market presence in the pharmaceutical space. The company receives a best-of-breed score for its sales enablement and support, which includes a full suite of support services at no extra charge, including skilled telephone technical support and around-the-clock online technical support. Areas of improvement for SAS include expanding their partnership strategy to include AMCs apart from alliances with other technology vendors. Datamonitor. This brief is a licensed product and is not to be photocopied Page 13

14 ACTIONS BI solutions for Biotech and Big Pharma are not one size fits both Translational medicine promises to help the industry predict which early stage products could advance further in the pipeline and improve its pipeline productivity and success rates, by harnessing and cross-referencing clinical with preclinical knowledge. Although both sectors of the industry, Big Pharma and Biotech, aim to achieve similar goals through translational medicine, the two sectors remain distinct in their structures and operations. With Biotech focusing on R&D and Big Pharma on clinical trials, each segments needs for data warehousing and data analytics tools vary. Marketing messages and workflow improvement discussions must echo the differences that characterize each segment. A one size fits...both marketing approach would fail to consider that Big Pharma pain point lies in the terabytes of heterogeneous data, while Biotech challenges fall under specialized data mining and predictive analytics tools. While a BI tool may address both sectors pain points through its functionality, marketing messages must be customized towards each sector separately. Approach an attaractive opportunity through the market-readiness lens When evaluating a market opportunity for selling a BI solution for translational medicine applications, technology vendors must take a holistic approach. Assessing the market environment in terms of competitors, the maturity level of the market and the decision-makers processes is as important as evaluating internal capabilities. In this brief, Datamonitor has outlined a framework for evaluating the attractiveness of the pharmaceuticals market using a set of market readiness criteria, which direct vendors to weigh a seemingly interesting market opportunity against their product portfolio, sales force capability, partnership strategy and market presence. Assessing a market opportunity through the market-readiness lens ensures that vendors take a holistic approach in their go-to-market strategy. This framework focuses on developing domain expertise and reiterates the idea of a scientific BI tool, which is designed with different end users in mind. Partner with innovators Rather than being a single peripheral endeavor within a pharmaceutical company, translational medicine challenges the current structure and drug development process within the entire organization and across the industry. As a novel drug development paradigm, translational medicine requires collaboration amongst several players within the pharmaceutical industry in order to succeed. Private partnerships between horizontal and niche technology vendors or public-private alliances such as AMCs and vendors attract additional resources and foster a much needed collaborative environment that will drive adoption of BI tools for translational medicine. Datamonitor recommends that vendors partner with innovative organizations to drive change in the industry and implement BI technologies that will enable a successful transformation in drug development. Datamonitor. This brief is a licensed product and is not to be photocopied Page 14

15 APPENDIX Definitions Big Pharma All nonbiotech companies with 2005 revenues greater than $10 billion Biotech Amgen, Genentech, Genzyme, Biogen Idec, Gilead Sciences, Millienium Business Intelligence (BI) is a broad category of application programs and technologies for gathering, storing, analyzing, and providing access to data to help enterprise users make better business decisions Translational medicine An emerging field that aims to translate basic research into real therapies for patients, and to create a more research-driven clinical practice. In the pharmaceutical industry, translational research efforts are developed to facilitate interaction between basic research and clinical medicine and vice versa, two areas historically separated. Abbreviations BI Business Intelligence CAGR Compound Annual Growth Rate IT Information Technology R&D Research and Development Further reading 2007 Trends to Watch Pharmaceutical Technology (BFTC1658) Translational Medicine - Drug Development Transformed? (Market Focus) (BFTC1660) Enabling Translational Medicine with BI (Technology Focus) (BFTC1676) US IT Spending on Business Intelligence to 2012 Pharmaceutical Technology (Databook) (DBTC0034) Europe IT Spending on Business Intelligence to 2012 Pharmaceutical Technology (DBTC0035) IT's role in the evolving Pharma industry - Addressing the R&D productivity crisis through new globalization and convergence strategies (DMTC1001) Addressing the Challenges of Consumer-driven Healthcare (Review Report) (DMTC1651) Datamonitor. This brief is a licensed product and is not to be photocopied Page 15

16 Datamonitor Technology Consultancy We hope that the data and analysis in this and future syndicated briefs will help you to make informed and imaginative business decisions. However, it may be that the data or analysis does not perfectly meet your needs in which case Datamonitor s Pharmaceutical Technology division may be able to help you. For further information about Datamonitor s Pharmaceutical Technology Consulting capabilities, please contact Markella Kordoyanni, on mkordoyanni@datamonitor.com. Ask the analyst The Pharmaceutical Technology Knowledge Center Writing team Markella Kordoyanni, Analyst, Pharmaceuticals Technology mkordoyanni@datamonitor.com Nicole Engelbert, Senior Analyst, Public Sector Technology nengelbert@datamonitor.com Datamonitor. This brief is a licensed product and is not to be photocopied Page 16