inside view


The interest in bioinformatics


Dr Kurt Zingler, managing director at Genedata, asks the tough questions when it


comes to the ROI of bioinformatics software T


here is no question that the field of bioinformatics and the technological advances that fuelled its growth have drastically changed both drug


discovery and life science research for the better. In the Wild West beginnings, there were few rules or long-term business models for bioinformatics soſtware. Tis freewheeling spirit led to tremendous innovation and astounding new scientific discoveries for the industry as a whole. At the same time, a lack of experience fostered esoteric programming languages and proprietary methodologies, which resulted in limited acceptance and usability. It took a while to realise that real value lies in supporting and optimising experimental research processes instead of technological novelty. As the promise could not live up to the reality


of approved drugs, the bioinformatics industry has gone through a string of failures, mergers, acquisitions and other basic mechanisms of consolidation. Today, the industry consists of a small number of established mid-sized vendors plus a mix of small, highly-specialised market entrants. While no one rule has defined the outcome, the survivors have largely been companies that provide a valid solution covering a significant and important part of a research process. Integration capability, scalability and openness for technical integration into existing infrastructure have become major drivers. While focus is on research process


optimisation, the industry as a whole still needs to get a handle on quantifying the value that bioinformatics soſtware generates. Tis relates closely to the question of return on investment (ROI). Frequently, ROI has been ignored when it comes to deciding on a specific bioinformatics solution. Tis is partly due to a lack of understanding of total costs for a specific research process. Tere also lacks understanding as to the total cost of a bioinformatics solution and the extent to which it can actually reduce total research costs. Various process metrics such as increase


in experimental throughput, elapsed time to decision making and the required result quality must be considered along with the


46 SCIENTIFIC COMPUTING WORLD


reduction of users due to intelligent automated data processing. Simply looking at soſtware license costs probably falls short of a full ROI assessment. Widely overlooked is the sizeable


contribution of bioinformatics soſtware from ‘in-house teams’ – soſtware development individuals and groups within pharmaceutical companies. As with their counterparts in the commercial soſtware sector, many in-house informatics operations began with loſty goals and expectations, and oſten budgets and head counts to match. As drug development organisations face looming patent expirations and cuts in basic research, sales and marketing and in-house informatics organisations are


intellectual property that was developed within the protected structure of academia or another life science company. Tey don’t require large investment capital to develop their scientific or technological ideas from scratch, which enables them to immediately enter the market in pursuit of funding customers. Given the limited size of the market, this is appropriate and the corollary is that there is little in the way of significant investment capital available. Tis is a change from the industry’s early years in which the assumed potential was large and seed capital of the tens or hundreds of millions was available. Teir task is oſten to take a group of very technically and/or scientifically-savvy founders to evolve into an outfit with strong business acumen as well. Te more established life science informatics


companies have been growing and evolving for a decade or more. While there are no hard and fast rules that attribute to their staying power, they collectively have gravitated towards similar paradigms. First, they have learned to develop soſtware using standard languages and methodologies. Tis soſtware addresses problems with broad applicability in the drug discovery business with additional growth opportunities in other areas of the life science sector. In this venue, they have also developed


IN THE WILD WEST BEGINNINGS, THERE WERE FEW RULES OR LONG-TERM BUSINESS MODELS FOR BIOINFORMATICS SOFTWARE


tasked with defining their ROI. Tis process has illuminated the full cost of soſtware, which includes on-going support, maintenance and continued development along with fully-loaded cost-of-services. What has emerged are smaller, more focused


groups specialising in specific tasks while external groups are relied on for more general informatics challenges that benefit from shared costs and shared institutional knowledge. In- house teams frequently try to build on academic and open-source soſtware to generate a somewhat heterogeneous soſtware mix intended to support key research processes. Given the focus on very specific solutions, the approach oſten lacks sustainability, scalability and flexibility in a frequently changing technological environment. Tis lack of planning for on-going maintenance and support costs has also become an unwelcome long-term liability for many larger organisations. With external bioinformatics companies


that supplant in-house teams, new market entrants are typically relatively small and they come into the market with a very lean cost structure. Tey oſten, but not always, start with


close relationships with their major partners and continue to develop soſtware in very close collaboration and guidance from their broader user community. In the evolving scientific and technological


landscape, more established companies thrive on change and help their customers in overcoming technological or organisational difficulties in dealing with change. More importantly, they have come to define their value not just in scientific terms, but rather in terms of ROI for their partners as they can define a price structure over time, eliminating any long-term liability associated with home-grown solutions. Looking forward, the palate of life science


informatics for larger research organisations will likely include a mix of academic, commercial and in-house solutions. Collectively these institutions will evolve and survive based on their ability to deliver a defined value to research institutions. Key to the industry’s success will be the continued focus on ROI, which will increase the efficiency of drug discovery. Te result: further streamlined research processes enabling break-through discoveries, better drugs and new opportunities.


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