Winning strategies in the life science tools market


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BioInformatics LLC, the leading research and advisory firm serving the life science tools market, will conduct an unprecedented analysis of competitive strategies in an era of flat growth, Thermo Fisher Scientific’s acquisition of Life Technologies, other mergers, and disruptive technologies. This prospectus highlights the objectives and methodology of the research effort and the analysis and actionable strategies that will be delivered in the final report.

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Winning strategies in the life science tools market

  1. 1. 1 Competing in a Changed Market: Competitive Strategies in an Era of Consolidation & Disruptive Technologies M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S
  2. 2. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 2 Competing in a Changed Market: Competitive Strategies in an Era of Consolidation & Disruptive Technologies BioInformatics LLC, the leading research and advisory firm serving the life science tools market, will conduct an unprecedented analysis of competitive strategies in an era of flat growth, Thermo Fisher Scientific’s acquisition of Life Technologies, other mergers, and disruptive technologies. This prospectus highlights the objectives and methodology of the research effort and the analysis and actionable strategies that will be delivered in the final report. The Situation The life science tools market has been in a near constant state of flux over the past five years as established companies have merged or been acquired, new companies are founded, and emerging technologies (such as next generation sequencing) disrupt long established markets and create new opportunities. All of this change is layered over constrained research funding in the United States and Europe and increased levels of life science spending and investment in Asia. This market turbulence came to a head when in April 2013 Thermo Fisher Scientific (TMO) announced that it planned to acquire Life Technologies (LIFE) in a $13.6 billion transaction. On February 3, 2014, the deal closed and a $17 billion company focused on the life sciences emerged. Completion of the transaction followed the receipt of all the required regulatory approvals and included the sale of the cell culture (sera and media), gene modulation and magnetic beads businesses to GE Healthcare for $1.07 billion. This constant state of disruption can be confusing for customers, challenging for the merging companies, and (if played appropriately) moments of opportunity for competitors. “There have been so many acquisitions in the last couple of years that I don’t really care who owns who as long as my products don’t change.” - Customer commenting on a recent transaction
  3. 3. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 3 Now what? Life science tools companies have had a year to determine how to compete in this new market that is dominated by one very large competitor with enhanced scale, impressive channel access, and the breadth and depth of capabilities to meet customer needs in research, specialty diagnostics and applied markets. Mergers are one way for companies to respond to external market conditions that reward scale, size and cost-effectiveness. The prevailing question that this report seeks to answer is: How should life science tools companies compete in this new market environment? n Should other suppliers merge in response to this acquisition? n Will competitors retreat from peripheral markets in order to defend core markets? n Will there be more alliances among competitors? n How can smaller life science companies bring new technologies to market? n If major players move aggressively into personalized medicine/clinical diagnostics are there openings for suppliers who remain focused on basic research? In light of these questions, which business strategies might be implemented? For example: n “Attack” Strategy: Attack newly merged entities when they are distracted by their mergers’ turmoil and confusion. n “Magnet” Strategy: Create a “magnet strategy” to attract and hire your merging competitors’ best people while their companies are in a state of merger shock. n “Threat” Strategy: Use the threat to your firm’s survival to jump-start internal change. n “Alliance” Strategy: Use multiple alliances, networks, licensing, or joint ventures—instead of mergers—to fuel growth. n “Fast-track M&A” Strategy: Plan and execute your firm’s fast-track mergers and acquisitions to acquire new technology, increase channel access or extend product lines. “Customer service got worse when Life Technologies bought up Molecular Probes, GIBCO, etc. Fisher customer service has always been poor. The combination of the two is depressing to contemplate.” - Customer discussing concerns about the potential for problems following a merger.
  4. 4. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 4 n “Composite” Strategy: Create a composite strategy by using two or more of the above strategies simultaneously to maximize growth and profitability. The purpose of this study is to take the pulse of the life science ecosystem to discern the effects of recent mergers, overall low growth, and disruptive technologies on suppliers and customers. Research Objectives n Understand if and how competitors are adjusting their business strategies in light of recent transactions and current market conditions (e.g., pharma consolidation). n Ascertain how customers perceive the current life science research landscape—suppliers, channel access, research funding, research initiatives (e.g., BRAIN Initiative), science policy (e.g., translational research), and their adoption of new technology. n Present strategies for competing successfully in the turbulent life science market. “Optogenetics is an upcoming avenue in neuroscience. It is effectively being used in the study of brain stroke and epilepsy. It is a valuable tool as it provides a way to manipulate brain functions externally using a beam of laser light and observe changes rapidly. It also has high translational potential to be applied in the clinic and will surely prove beneficial to patients.” - Research scientist discussing an emerging technique that may be a new market opportunity.
  5. 5. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 5 ADVANTAGE OF MULTI-SPONSOR RESEARCH Mega-mergers tend to weed out marginal competitors and create opportunities for those astute enough to know what is happening around them. Multi-sponsor market research enables companies to quickly gain competitive advantage through insights that support strategic decision- making—at a fraction of the cost of a custom research project. Multi-sponsor research is the concept of sharing the costs and the results with a select group of market participants at a significant discount months before the results are released for general sale. Start-Up Time BioInformatics LLC has a multidisciplinary team of scientists, industry veterans and market research experts who will begin work upon receipt of your Sponsorship Agreement. Expertise BioInformatics LLC has unmatched expertise in the life science market and has delivered market studies to more than 500 unique firms. Objectivity BioInformatics LLC multi-sponsor research projects are unbiased and provide a fresh perspective on your strategies. Efficiency There is no need for pre-publication sponsors to disrupt their routine activities. BioInformatics LLC will perform all aspects of the research and deliver the final report within the required timeframe. Cost Control To commission a private study of similar scale and scope would cost approximately $80,000 to $100,000 USD. “Genome engineering with Zn-nucleases, TALENs or CRISPR- Cas9 systems—allows genetic research at the organismal level with unprecedented precision.” - Customer speculating about the ground- breaking technology they will adopt in 2014.
  6. 6. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 6 RESEARCH METHODOLOGY Open Source Intelligence We will conduct an extensive review of recent analyst calls, reports and industry news to document changes in strategy, personnel, acquisitions, partnerships or alliances that might reflect a competitive response to the Thermo Fisher Scientific acquisition of Life Technologies. Research will also be conducted to establish a framework by which to categorize the business strategies employed by various life science suppliers to reveal industry trends. Market Participants BioInformatics LLC will conduct dozens of private, off-the-record in-depth interviews with senior executives, marketing and product managers and sales people to understand how life sciences suppliers are reacting to the acquisition of Life Technologies by Thermo Fisher Scientific and how the presence of this new competitor has affected their business strategies and corporate performance. From the perspective of those actively competing in all segments of the life science market, we will uncover the opportunities or threats to their business in light of this transaction. We will also explore how market participants view emerging technologies and applied markets as a path to growth. * At no time will BioInformatics LLC ask a respondent to disclose any information that he/she declares is proprietary and/or confidential and, in fact, will explicitly explain to said individual that he/she is only being asked to provide more general information or insight, and their opinions on market evolution and competitor activity. “Federally funded biomedical research is critical to address our nation’s health needs by providing novel therapies that lower the cost and duration of treatments for major diseases (including cardiovascular disease, cancer, diabetes), and developing new point-of-care diagnostic tools that will transform the practice of medicine over the next decade.” - Translational research scientist telling BioInformatics LLC about the long-term implications associated with short- term budget battles.
  7. 7. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 7 Customers We will survey approximately 1,000 life science customers in the United States, Europe and Asia to gauge their overall reaction to the merger and the uncertain funding environment. The customers to be surveyed will encompass all segments of the market in which the major participants are actively competing. We will probe how mergers have affected product availability, ordering, sales, delivery, performance and support. In addition, we will determine whether recent mergers have had any impact on customer access to other brands through both the customer survey and interviews with Purchasing Agents at key accounts. Customers will be asked which new approaches they believe will most likely affect their research and how these developments will impact their budgets and buying behavior. Market Observers The opinions of leading market luminaries will provide color and context to the data. From notable Board members, company founders, investors, strategy consultants, branding experts, and marketing agencies, these observations will provide unique insight as to what actions life science suppliers might take to best compete and thrive. “…Research, especially in genomics, is changing too quickly to purchase needed materials on guessing plan with an unknown budget. We need to be able to respond to the changing market and research landscape in an efficient manner in order to maximize the effect of our scarce (in agriculture) research dollars…” - Scientist discussing the disconnect between technological innovation and budget uncertainty.
  8. 8. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 8 ANALYSIS & REPORTING Our experienced team of industry veterans and professional market researchers will continually assess incoming information throughout the duration of this study—comparing, corroborating and challenging information as it is received. Constant crosschecking of information validates the data and enables us to highlight trends in the market’s competitive dynamics that forecast change. In the final weeks of the study, the team will finalize an analytical framework by which the different strategies employed by key players will be compared and contrasted. We will analyze the data and insights from all sources and produce a thorough and comprehensive report with actionable recommendations. “When research budgets comes into effect, the basic research which ‘seems’ to have nothing to do with human benefits, are the ones that are most likely to be cut (e.g., evolutionary biology, systems biology). Meanwhile, the NIH is trying to push some grand cooperated research on human brain. The fact is we need novel theories and tools, which do not yet exist, to deal with problems with such complexity. These theories and tools could only be derived from intensive basic research.” - University scientist telling BioInformatics LLC about their concerns about 2014 research funding. Open Source Intelligence News Articles Press Releases Analyst Reports Investor Presentations Public Statements Regulatory Filings Customers Purchasing Agents Principal Investigators Lab Managers Staff Scientists Market Observers Industry Veterans Strategy Consultants Marketing Experts Sales Strategists Market Analysts Market Participants Corporate Executives Marketing & Sales Managers Product Managers Sales Reps Actionable Competitive Strategies
  9. 9. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 9 “Training a good research scientist takes 10-15 years. The flat research budget over the last several years has greatly reduced the number of talented students entering research, and force many established scientists to close their labs.” - Clinical scientist commenting on the long term effect of budget cuts. The final report will consist of the following sections: Section 1: Executive summary and overview Section 2: Competitor strategies and market analysis Section 3: Customer perceptions and experiences Section 4: Competitive response and strategy recommendations Section 5: Study methodology Section 6: Additional data analysis, including verbatim comments from customers SECTION 1 ©2013 BioInformatics LLC US-1 We estimate that life science R&D funding in the United States will be approximately $135.1 billion in 2014. n Private industry is the largest source of life science R&D funding, investing approximately $92.6 billion n Includes pharmaceutical and biotechnology firms, agricultural biotechnology, medical devices, diagnostics, etc. n Also includes life science venture capital n Federal government is the second largest source of life science R&D funding overall, however the largest single source of funding for academic research labs n Estimated life science R&D funding will be $32.6 billion* (selected agencies including NIH, CDC, FDA, USDA, DOD medical research and NSF; used FY2013 budget estimates) n Institutional funding and other sources including: n State/local governments n Non-profit associations and institutes Sources: AAAS Research and Development FY2014 report, 2014 Global R&D Funding Forecast, sponsored by Battelle and R&D Magazine, December 2013, and NSF Higher Education Research and Development Survey, 2011. U.S. Overview Industry $92.60 Federal Government* $32.61 Institutional Funding and Other Sources $9.86 MajOR FUnDing SOURceS OF 2014 U.S. LiFe Science R&D (in biLLiOnS) Sample page from a recent multi-sponsor report.
  10. 10. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 10 “The use of genome wide and exome sequencing of individual patient’s tumors to determine the specific defect(s) and mutations that are expressed in the cancer, to understand the individual cancer drivers, and to use chemotherapy, targeted therapy, microRNA treatment and emerging treatments of cancer together to get the best outcome for each patient.” - Pharmaceutical customer on how microRNA is driving their drug discovery program. SECTION 1 ©2013 BioInformatics LLC US-2 Growth in biotechnology firms has been offset by restructuring in large pharmaceutical firms; overall headcount and R&D spend is little changed over the past five years. Domestic R&D spenD by phRmA membeR compAnies 2001 to 2012 (in millions) U.s. private industry Funding $23,502 $25,665 $27,065 $29,556 $30,969 $33,968 $36,608 $35,571 $35,356 $40,688 $36,374 $36,810 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Domestic R&D Spend by PhRMA Member Companies 2001 to 2012 (in millions) Sources: Pharmaceutical Research and Manufacturers of America, PhRMA Annual Membership Survey, 2013 and downloads/20120313#sthash.TfxVtLUv. dpuf. • As represented by PhRMA member companies growth in domestic R&D has increased 0.6% since 2007, the year before the Great Recession • Big pharma increasingly looks to partner with academic researchers to accelerate drug discovery to bolster shrinking pipelines and reduce costs • In 2012, PhRMA members spent approximately 76% of their R&D dollars in the United States • Increased levels of R&D activity are shifting to Asia, to China and India in particular, to take advantage of lower costs and a scientifically adept workforce Sample page from a recent multi-sponsor report.
  11. 11. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 11 BUDGET & TIMING Since 1994, BioInformatics LLC has been providing market insights and fact- based consulting to life science suppliers to help them make better business decisions. Our multi-faceted approach to research has been developed over 20 years and is based on knowing how to reach the people who know what you want to know. By asking the right people the right questions we develop a composite point of view. We are objective and unbiased in how we interpret the differing perspectives of market participants and scientific customers. What we offer is the reaction time needed to develop and implement strategic initiatives. What clients receive from this multi-sponsor research is greater confidence in the accuracy of your market assumptions, and better intelligence on competitor activity and customer behavior. To learn more, please visit These fees are calculated based on the nature and the scope of the project, the level of detail, the objectives and the relative difficulty of obtaining the information. The delivery of the final report will mark the end of this assignment. Task Timing Due date for signed agreement June 23, 2014 Report delivered August 15, 2014 Total $15,000 USD per sponsor BioInformatics LLC provides critical market intelligence to leading companies serving the life science, medical and pharmaceutical industries. We support clients across the entire market spectrum—from scientific research to diagnostics and therapeutics— providing high-level management with market insights.
  12. 12. M U L T I - S P O N S O R R E S E A R C H P R O S P E C T U S 12 Engagement Terms For this engagement, BioInformatics LLC billing procedures are as follows: n 50% of the total engagement cost is due upon receipt of your signed Authorization Letter. n Balance due upon receipt of the final report. n The delivery dates and fees contained in this prospectus will remain in effect until June 23, 2014. n A minimum of six (6) companies must participate or BioInformatics LLC reserves the right to cancel the project. If BioInformatics LLC cancels the project, sponsor fees will be refunded. n Sponsors will have exclusive access to the report for 90 days before it is released for general sale. Questions/Comments Robin Rothrock, Ph.D. Director of Publications BioInformatics LLC 703.778.3080 x 25 For more information about BioInformatics’ product and service offerings, please visit our website at, call 703.778.3080 x22, or email g.thompson@ Deadline for Sponsorship: June 23, 2014 Greg Thompson, M.S., M.B.A. Director, Business Development BioInformatics LLC 703.778.3080 x22 Zach French Marketing Manager BioInformatics LLC 703.778.3080 x 19
  13. 13. 13 M U L T I - S P O N S O R R E S E A R C H A uthori z ation Project No.: 14-006 Purchase Order Number: ____________________________ Please remit to: BioInformatics, LLC 2111 Wilson Boulevard Suite 250 Arlington, Virginia 22201 703.778.3081 fax n Yes, my company wishes to participate as a pre-publication sponsor of BioInformatics’ study: Competing in a Changed Market: Competitive Strategies in an Era of Consolidation & Disruptive Technologies I understand that the budget for this project is $15,000 including expenses, for delivery of the final report on or about August 15, 2014. A non-refundable payment of $7,500 is due from each Sponsor before the start of the project. The balance of $7,500 is due upon delivery of the final report. Payment method for initial deposit: (please select one option) n Charge my credit card Type: American Express MasterCard Visa (circle one) Number: ________________________________________ Name on card: _ _________________________________ Expiration Date (MM/YY): _________________ n Bank wire/ACH payment (if selected, we will send our bank details) n Invoice me referencing Purchase Order #: __________________________ Authorized by: _______________________________________ _____________________________________________ (signature) (date) Proposal authorized by: Accounts payable address: _______________________________________ _____________________________________________ _______________________________________ _____________________________________________ _______________________________________ _____________________________________________ _______________________________________ _____________________________________________ _______________________________________ _____________________________________________ BioInformatics’ Federal Tax Identification Number is 54-2001907. Please sign, date and complete the Accounts Payable details and REMIT TO:, or 703.778.3081 (fax)