Computational Biology Market

Market Overview

The global computational biology market was worth USD 5,350 million in 2021, and it is projected to be worth USD 27,425 million by 2030, registering a CAGR of 19.9% during the forecast period (2022–2030).

 Computational biology is a field of biology that implements computers and computer science to understand better and model biological structures and processes. It comprises computational approaches (such as algorithms) to represent and simulate biological systems and interpret experimental data on a massive scale. The global computational biology market is predicted to grow due to the increase in bioinformatics research, the number of clinical studies in pharmacogenomics and pharmacokinetics, and the growth of drug designing and modeling.

Market Dynamics

Drivers: Increase in Bioinformatics Research

As genome sequencing programs have resulted in the exponential growth of sequence databases, the demand for bioinformatics tools and expertise has grown. The National Institute of Technology-Rourkela (NIT-R) in India opened its Centre for Bioinformatics and Computational Biology (CBCB) in July 2021, which would use extensive data analysis to help create innovative disease biomarkers and therapeutic techniques. As a result, establishing such computational biology facilities in developing nations supports market growth.

Drivers: Rising Number of Clinical Studies in Pharmacogenomics and Pharmacokinetics

Rapid breakthroughs in pharmacogenomics (Pgo) and pharmacokinetics (PK) research have made pharmacogenomics testing accessible in clinical laboratories. As disease burdens increased, so did the need for more research and development and drug discovery, growing clinical trials in pharmacogenomics and pharmacokinetics for such pharmaceuticals. Moreover, investments in clinical trials and biosimilars are expected to impact market growth over the projection period positively.

Several pharmacogenomics implementation initiatives have been initiated around the world. In November 2018, Diagnomics Inc. announced cooperation with translational software to deliver pharmacogenetic testing services on the advanced genotyping array in the United States, paving the way for precision medicine. Such a launch of services reflects advancements in pharmacogenomics, hence propelling the industry forward. In April 2021, Jubilant Pharma, a subsidiary of Jubilant Pharma, announced that safety and pharmacokinetic studies in animals and healthy human individuals in India utilizing a novel oral formulation of remdesivir compared to the commercially available injectable formulation of remdesivir were completed successfully. As a result, such research will lead to innovations in the industry being examined, hence expanding the market.

Restraint: Lack of Trained Professional

The healthcare business is rapidly expanding because of the increased burden of chronic diseases and the advent of new ailments. Talent development does not keep up with the industry's pace. Due to a scarcity of competent personnel for the essential work, there is a significant lack of competence in the field, which is predicted to negatively influence the computational biology industry over the study's prediction period.

Pharmaceutical and technological advancements have ushered in a new era in human health. On the other hand, these drugs would only fulfill their purpose if qualified specialists conducted the necessary clinical studies and oversaw the research and development process. The computational biology market is experiencing a skilled labor shortage worldwide, which will impact the market's growth.

Opportunities: Increase in Innovative Technology

People's perceptions of their place in the world as modern humans have evolved due to the merging of biology and computer technology. Researchers were able to gain fresh insights into human evolution and genetic and anatomical data from the computer. To make working with massive data sets easier, data exchange, data storage, and high-performance computing have been developed. Pharmaceutical and biotech businesses look for new medications and ways to better understand how proteins interact.

Furthermore, one of the market's potential trends is the advancement and implementation of advanced analytics, robotics, and automation in pharmaceutical drug manufacturing. Automation, digitization, and robotics have resulted in highly adaptable innovative laboratories that can conduct routine and high-volume studies and highly specialized tests at reasonable pricing. Analytical testing, which is predicted to profit considerably from higher degrees of automation, is expected to benefit laboratory automation significantly.

Regional Analysis

North American Dominance in the Regional Market

By region, the global computational biology market share is segmented into North America, Europe, Asia-Pacific, the Middle East and Africa, and South America. 

North America is the most dominant regional market. It is estimated to reach an estimated value of USD 10,965 million by 2030 at a CAGR of 19.7%. The computational biology market is expected to see rapid growth due to increased bioinformatics research, an increasing number of pharmacogenomics and pharmacokinetics studies, and drug discovery and disease modeling processes. An increase in investments by major companies and a higher number of product launches are also expected to boost the market growth.

For instance, in December 2021, Certara, Inc. released Simulator Version 21, used throughout the drug development process to evaluate new drug formulations, determine first-in-human dosing, optimize clinical study design and predict drug-drug interactions. Furthermore, critical initiatives by the key market players like partnerships and collaborations to expand their capabilities will also increase the market growth. For instance, in March 2019, Rosa & Co. LLC, a US-based company, entered a long-term strategic research agreement with Chugai Pharmaceutical Co. Ltd to provide Rosa's PhysioPD research services. Hence, such factors drive market growth.

Europe is the second-largest region. It is estimated to reach a value of USD 7,060 million by 2030 at a CAGR of 19%. The computational biology market in Germany is projected to grow due to the increasing focus on drug discovery, increasing numbers of clinical trials and increasing research and development expenditure, and rising German healthcare expenditure. Furthermore, the country observes high demand for drug discovery. As a result, companies are adopting growth strategies such as partnerships, acquisitions, mergers, etc., growing their presence in this country. Hence, the German market is expected to witness steady growth due to the above factors.

Asia-Pacific is the fastest-growing region. It is estimated to reach a value of USD 3,690 million by 2030 at a CAGR of 20.6%. The China computational biology market is expanding due to increased bioinformatics research, increased clinical studies in pharmacogenomics and pharmacokinetics, and growth in drug design and disease modeling. The increasing product launch of drug designing and modeling in China drives the market growth. For instance, in July 2020, Tencent launched its own AI-driven drug design platform, called iDrug. Hence, from the factors above, the computational biology market in China is estimated to witness significant growth over the forecasted period.

Segmental Analysis

The global computational biology market share is segmented by application, tool, service, end-user, and region. 

By application, the global computational biology market is segmented into Cellular and Biological Simulation, Drug Discovery and Disease Modelling, Preclinical Drug Development, Clinical Trials, and Human Body Simulation Software. 

Drug Discovery and Disease Modelling is the largest shareholder and is estimated to reach a value of USD 9,365 million by 2030 at a CAGR of 19.6%. It is further classified into Target Identification, Target Validation, Lead Discovery, and Lead Optimization. Within Drug Discovery and Disease Modelling, target identification dominated the market. Computational biology has the potential to accelerate the drug discovery process, lower costs, and transform the way medications are designed. The increase in computational methods for the target identification stage in the drug discovery process is expected to boost segment growth shortly.

Preclinical Drug Development is the fastest-growing segment. It is estimated to reach a predicted value of USD 7,365 million by 2030 at a CAGR of 20.2%. It is further classified into Pharmacokinetics and Pharmacodynamics. Within Preclinical Drug Development, pharmacodynamics dominated the market. 

The Cellular and Biological Simulation segment is the third-largest shareholder. It is estimated to reach USD 3,975 million by 2030 at a CAGR of 18.8%. It is further classified into Computational Genomics, Computational Proteomics, Pharmacogenomics, and Other Cellular and Biological Simulations (Transcriptomics/Metabolomics). Computational Genomics held the most commanding share within the Cellular and Biological Simulation segment. The segment growth for computational genomics is mainly driven by human genome sequencing to identify genetic abnormalities that gene-editing therapy can then address. 

By tool, the computational biology market is segmented into Databases, Infrastructure (Hardware), and Analysis Software and Services.

The Database segment accounted for the largest market share and is projected to register the highest CAGR of 19.3% during the forecast period, accounting for USD 9,830 million. The database differs with a particular disease or organism and can include different types of data related to nucleic acid, proteins, and others. The immense size of biological databases provides a resource to answer biological questions about molecular modeling, molecular evolution, mapping, and gene expression patterns and help in the structural-based design of therapeutic drugs.

Companies and institutes collaborate to share their database for advancement in computational biology. For instance, in July 2021, DeepMind partnered with the European Molecular Biology Laboratory to make a database in the 3D model for the human proteome, which would include around 20,000 proteins that are expressed by the human genome. Thus, the increased use of databases for various research applications would help boost the market growth and demand for the database market.

Analytical Software and Service is the fastest-growing segment and is estimated to reach a value of USD 8,875 million by 2030 at a CAGR of 20.2%. Analytical software is a powerful computational tool that helps scientists understand complex biological systems. The increased use of software and service to analyze different databases has increased companies' focus on expanding their business into the software industry. For instance, in December 2021, BICO Group announced its plan to acquire Biosero for up to USD 165 million. This acquisition helped the company accomplish its goal of expanding into computational biology software. Hence, such factors would help drive the analysis software and services market growth.

Hardware is the third-largest segment and is estimated to reach a value of USD 5,240 million by 2030 at a CAGR of 18.6%. Hardware accelerators act as technological enablers to fast-track the process of scientific discovery. A wide range of hardware accelerator platforms are used in computational biologies, such as FPGA-based reconfigurable hardware platforms, graphics processing units), cell broadband engines, and multicore processors. Graphics processing units (GPUs) are frequently used to speed up scientific computations. Such factors can help boost the demand for hardware in the computational biology market.

By service, the global computational biology market is segmented into In-House and Contract.

The contract is the most dominant and the fastest-growing segment. It is estimated to reach an expected value of USD 18,850 million by 2030 at a CAGR of 19.6%. Obtaining software and services on a contractual basis is a practice when an outsourcing company develops software for a particular organization. The price for such contractual software is more reasonable than in-house software development as outsourcing development teams have more experience in different fields.

In December 2021, Iktos collaborated with the University of Dundee to identify the potential preclinical candidates and other novel chemical matter with suitable properties using AI-based retrosynthesis analysis. This was done by applying Iktos's generative modeling artificial intelligence technology in one of the university's drug discovery programs. Such factors would help increase the demand for the contract computational biology market.

In-House computational biology solutions are estimated to reach a value of USD 5,030 million by 2030 at a CAGR of 18.8%. The use of in-house solutions enables the ability to maximize the customization process for every minor tech as per the company's requirements. It also allows the organization to make appropriate changes to adjust the software to the business needs during the development process. 

By end-user, the global computational biology market is segmented into Academics and Industrial and Commercial.

Industrial and Commercial are the largest and the fastest-growing segment. It is estimated to reach a value of USD 14,215 million by 2030 at a CAGR of 19.7%. Computational biology databases and solutions are increasingly being used in industries to analyze different data sets to produce various biological products. Pharmaceutical and biopharmaceutical companies use these solutions for drug discovery and development using multiple databases for nucleic acid and proteins/amino acids.

Pharmaceutical companies also focus on genomic databases to analyze and find links between specific genotypes and diseases. Additionally, with an increasing number of drugs nearing patent expiration, big pharmaceutical companies are focusing on the production of biopharmaceuticals, where computational biology plays a significant role in the designing and developing of these products. Therefore, the factors mentioned above are predicted to drive the market growth during the forecast. 

The Academics segment is expected to reach an estimated USD 9,630 million by 2030 at a CAGR of 19%. The increase in the availability of funding for the development of different computational biology-related software, hardware, and database is a significant factor contributing to the demand of the computational biology market in academics.

Recent Developments

• April 2022- Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based software platform is transforming the way therapeutics and materials are discovered, announced that the company granted non-statutory stock options to purchase an aggregate of 101,715 shares of the company's common stock to 30 newly hired employees, including six freshly hired employees based in India and one newly hired employee based in Japan.
• May 2022 - Genedata, the leading supplier of enterprise software solutions for biopharmaceutical Research and Development, announced that Ajinomoto, a multinational provider to the biopharmaceutical industry of cell culture media and development and manufacturing services (CDMO), has implemented Genedata Bioprocess® to digitalize and automate their R&D and manufacturing operations in Japan and Korea.