Drug Discovery Informatics Market

Market Overview

The global drug discovery informatics market size was valued at USD 2.96 billion in 2022. It is estimated to reach USD 7.44 billion by 2031, growing at a CAGR of 10.8% during the forecast period (2023–2031). The increasing adoption of in-silico modeling tools and the advancements in high-performance computing and web services are expected to stimulate market growth.

Drug discovery informatics, also known as computational drug discovery or chemoinformatics, refers to applying computational methods, algorithms, and technologies to expedite the discovery and design of new drugs. It combines principles of computer science, data analytics, and chemistry to analyze and interpret vast amounts of biological and chemical data, ultimately aiding in identifying and developing potential therapeutic compounds. Drug discovery informatics plays a crucial role in the early stages of drug discovery, where researchers aim to identify molecules or compounds that can potentially target specific diseases or conditions. It involves the integration of various data sources, including genetic and proteomic data, chemical databases, clinical trial data, and biomedical literature, to identify patterns, relationships, and insights that can guide the drug discovery process.

One of the key aspects of drug discovery informatics is the use of computational modeling and simulation techniques. These methods enable researchers to predict the behavior and properties of potential drug candidates, such as their binding affinity to target proteins, pharmacokinetic properties, and potential side effects. Computational models can also assist in virtual screening, where large databases of chemical compounds are screened to identify those with the highest likelihood of being effective drug candidates. Additionally, drug discovery informatics encompasses the development and utilization of tools and software platforms that aid in data management, visualization, and analysis. These tools help researchers navigate complex data sets, analyze chemical structures, and perform virtual experiments, ultimately accelerating drug discovery and reducing the need for costly and time-consuming laboratory experiments.

Market Dynamics

Global Market Drivers

Increasing Adoption of in-silico Modelling Tools

Drug discovery comprises several steps that rely on in silico tools to minimize the complexity. The first phase of drug discovery, which identifies a lead compound, requires synthesis and analysis of many derivatives. This can be achieved through in-silico modeling tools. The success of a drug discovery experiment significantly depends on the efficiency of tools adopted to assess the various aspects of the drug. The in-silico tools used herein include modeling tools to determine the 3D model of ligand and the protein—ADMET investigation—affinity assessment in drug-ligand interaction and docking for pharmacological profiling. These components, integral to the drug discovery space, can be effectively identified using specific in silico software. Major market participants are involved in adopting silico modeling tools and are thus anticipated to drive the market.

Advancements in High-Performance Computing and Web Services

Advancements in web-based services and computing technology, which support the decision-making of laboratory chemists through the quick generation of substantial information to avoid delays in the drug discovery process, are expected to support market growth. Medicinal chemists are now using discovery informatics platforms for preliminary analysis of ligand-receptor interactions and parallel library design. Technological advancements in software employed by computational informatics for predictive chemistry, which lead to improvement in laboratory informatics and scientific innovation, are anticipated to drive growth in the coming years. This group of “front-line” scientific applications, part of a category of software generally referred to as “laboratory informatics,” is a critical component in the redefinition of discovery informatics and is increasingly used by laboratory chemists and biologists.

Global Market Restraints

Downward Pricing Pressure and Outsourcing of Services

Market consolidation, majorly due to mergers and acquisitions, for availing informatics services and the observed increase in outsourcing of services as a consequence of the high cost of the informatics platform is expected to restrain the drug discovery informatics market growth to a considerable extent. Moreover, downward pricing pressure from rising R&D expenses can also be attributed to slow growth. In the case of informatics solutions, there is no constant circulation of new products to sales and marketing. Higher costs of informatics algorithms and services result in market participants opting for outsourcing services, negatively affecting the development of novel IT solutions and consequently restraining growth considerably. Market players are involved in using different cooperation models for outsourcing services.

Global Market Opportunities

Rising Incidence of Chronic Illness

The rising incidence of chronic illnesses, like cancer and other infectious diseases, has created lucrative opportunities for drug developers. As per the National Cancer Institute, the number of new cancer cases is expected to increase to 23.6 million by 2030. According to Cancer Facts and Figures, 2020, published by the American Cancer Society, cancer is the second most common cause of death in the U.S., with an expected 1.8 million new cancer cases and 606,520 related deaths in 2020. This translates to nearly 1,660 deaths in the U.S. As per the article published in February 2021, around 10.0 million cancer deaths and 19.3 million new cancer cases were estimated to be reported in 2020 worldwide. The four most common types of cancer worldwide are breast, lung, bowel, and prostate cancers. The new cases of chronic conditions have driven RandD in this sector.

Regional Analysis

North America Dominates the Global Market

Based on region, the global drug discovery informatics market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global drug discovery informatics market shareholder and is estimated to grow at a CAGR of 10.5% over the forecast period. North American market encompasses the U.S. and Canada. Higher incidence rates of infectious and oncology diseases are expected to drive demand for informatics solutions to aid drug discovery and development. Well, the defined regulatory framework is responsible for higher penetration of market players, leading to the generation of industrial revenue. The simultaneous developments of next-generation sequencing and chemical laboratories in the region are the highest impact rendering factor for the growth of drug discovery informatics. As these segments are capital-intensive, high RandD investment markets complement each other significantly; their interrelated development dependencies are integral to their development.

Europe is anticipated to exhibit a CAGR of 10.6% over the forecast period. Europe is second only to North America in drug discovery informatics market share. With international collaborations between European universities and informatics solution providers, the European informatics marketplace is also expected to expand significantly throughout the anticipated period. Organizations such as the European Federation for Medical Informatics (EFMI) support driving market growth by enabling data management through informatics-based platforms.

Asia-Pacific serves as a great pool of patients concerning infectious diseases and thus is expected to drive the market growth. As this region contributes 60% of the world’s population, low prevalence translates into large numbers of infected people. Emerging economies like India and Australia also contribute towards the revenue share and growth of the rest of the Asia Pacific region. As outsourcing services are gaining momentum, more Asian countries are included in creating the infrastructure that is anticipated to support drug discovery through government investment and academic innovation. This is expected to expand the market in this region by increasing revenue generation through outsourcing informatics services.

In Latin America, the Rise in the number of sequencers installed in this region is expected to drive the demand for data analysis platforms and algorithmic solutions in this region. However, the absence of market entities is attributed to support in revenue generation by outsourcing the informatics services from dominant regions such as the U.S. and Canada.

In the Middle East and Africa conducting clinical trials in the Middle East and Africa offers advantages such as patient diversity, cost advantage, infrastructure, and world-class medical facilities. Many regions are initiating to adapt to the global standards and collaborating with other global CROs to mark their presence.

Segmental Analysis

The global drug discovery informatics market is bifurcated into workflow, mode, and services.

Based on workflow, the global market is bifurcated into discovery informatics and development informatics.

The discovery informatics segment dominates the global market and is projected to exhibit a CAGR of 10.6% over the forecast period. This study's discovery informatics comprises lead identification, validation, assay development, and lead generation informatics solutions. Owing to the higher adoption of informatics solutions in the segments above, discovery informatics accounted for a significant revenue share in 2020. Drug discovery is a complex and lengthy process. Commercializing any new drug takes more than seven years and entails high investments. Many drugs have failed during the clinical trial phases, leading to a significant loss in revenue. Informatics offers manufacturers a new way to reduce R&D expenditure and curb failure rates.

Based on mode, the global market is bifurcated into outsourced informatics and in-house informatics.

The outsourced informatics segment dominates the global market and is projected to exhibit a CAGR of 10.5% over the forecast period. Outsourced drug discovery informatics dominated the market share in 2020 concerning revenue owing to higher adoption of outsourcing services than in-house services. Utilization of outsourcing services by major players in various steps of drug discovery and development, which include informatics solutions in analytics, logistics, and trial data management, results in a larger share of this segment in the drug discovery informatics market. Computational support required for the in-silico drug designing being substantially expensive fuels the demand for outsourcing these services. Different cooperation models for outsourcing drug informatics solutions in the industry, such as joint ventures, strategic partnerships, price competition, and project selection, support anticipated growth with potential avenues.

Based on services, the global market is bifurcated into sequence analysis platforms, molecular modeling, docking, clinical trial data management, and others.

The sequence analysis platforms segment dominates the global market and is projected to exhibit a CAGR of 12% over the forecast period. Sequence analysis platforms accounted for the largest share in 2020, owing to their price reduction resulting in a higher adoption rate. According to the National Human Genome Research Institute, a significant decrease in the costs for genome sequencing has been witnessed since the first Human Genome Project was initiated in 2000. The below figure illustrates the exponential decrease in the cost of sequencing a million bases (1 Mb).

Recent Developments

• January 2023- Schrödinger announced the launch of its new QML Suite, a software platform that uses quantum machine learning to accelerate drug discovery.
• February 2023- Dassault Systèmes announced the acquisition of Medidata Solution, a clinical trial management software provider.