The Chemical and Biological Detection Market:
Not So Toxic After All
Ryan Hendrix, Industry Analyst
Aerospace and Defense
December 17, 2008

Focus Points
Total Market Overview
•
Major Trends
•
Market Challenges
•
Market Drivers
•
Key Participants
•
Major Findings
•
Conclusions
•
2

Market Introduction
source: http://www.army.mil/cmh-pg/photos/WWII/Preps/WW2-Prep.htm
3

Total Chemical and Biological Detection Market Revenue
$6.8
$2.1 Chemical& Biological Total Market (U.S.), 2006-2012
450.0
$35.3
400.0
$20.3 350.0
300.0
$62.8
$11.0 250.0
200.0
$ Million
$ Million
$ Million
150.0
100.0
50.0
0.0
$113.9 2006 2007 2008 2009 2010 2011 2012
$306.8
DoD DHS State & Local Other Fed
Chemical& Biological Total Market (U.S.), 2007
$2.70 , 1%
$27.10 , $136.50 ,
14% 70%
2006
2012
$29 , 15%
• The U.S. chemical and biological detection markets have had a high priority in
receiving funds. The U.S. Department of Defense (DoD) comprises 70 percent of
the total chemical and biological detection market.
Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan
4

Chemical Detection Market - Trends
• More and more companies are realizing the demand for Rugged
systems
Rugged Systems*
• Smaller systems continue to be in demand by the military
Product Miniaturization*
• The DoD has set aside significant funding for projects involving
chemical detection
Multi-Detection Systems*
• Identifying specific agents are in greater demand
Identifying Agents*
* Source: Microsoft Clip Art
5

Biological Detection Market - Trends
• Government RDT&E and procurement spending increased for fixed-
site air samplers
Continuous Sampling*
• Biological detection devices with reduced operating costs across all
market segments
Operating Costs*
Immunoassay international first responders market has many potential
•
opportunities
International First
Responder Market*
* Source: Microsoft Clip Art
6

Chemical Detection Market - Challenges
High DoD Standards
Long Procurement Cycles
Highly Competitive Market
State and Local Markets are Reaching Saturation
High DoD Standards
•
Weak
Long Procurement Cycles Can Keep
•
Challenges
Potential Vendors Out of the Market
Highly Competitive Market
•
Strong
State and Local Markets are Reaching
•
Saturation
Length of arrow indicates relative impact
Source: Frost & Sullivan
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.

Biological Detection Market - Challenges
Government spending leans toward bio-
•
Lack of testing standards
Devices for state and local must be listed on the AEL
counter measures rather than detection
Government spending leans toward bio-
counter measures rather than detection
Weak
Lack of testing standards
•
Restraints
Devices for State and Local must be listed on
•
the AEL
Strong
.
Length of arrow indicates relative impact
Source: Frost & Sullivan
8

Chemical Detection Market - Drivers
Length of arrow indicates relative impact
The Demand for More Advanced Detection
•
Equipment
Strong
Continued DoD and DHS spending on RDT&E detection
The demand for more advanced detection systems
Continued DoD spending on detection equipment
Continued Spending on Detection
•
Equipment by Department of Defense
Drivers
Continued Spending on RDT&E by
•
Department of Defense and Department of
Homeland Security within the Detection
Market
Weak
equipment
Source: Frost & Sullivan
9

Biological Detection Market - Drivers
Length of arrow indicates relative impact
Persistent Fear of a Devastating Attack
•
Strong
Delivers accurate results both in the lab and in field
Increased DoD Expenditure
•
Drivers
Need for Biological Detection Equipment that
•
Delivers Accurate Results Both in the Lab and in
the Field
Increased DoD Expenditure
Persistent fear of an attack
Weak
Source: Frost & Sullivan
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Total U.S. Chemical and Biological Detection Market
Total Chemical and Biological Detection Market Spending by
Segment (U.S.), 2006-2012
300.0
($ Million)
200.0
100.0
0.0
2006 2007 2008 2009 2010 2011 2012
113.9 136.5 159.3 193.5 241.4 276 306.8
DoD
11 29 34.8 46.8 54.9 59 62.8
DHS
2.6 2.7 3.1 3.7 4.5 5.7 6.8
Other Federal
20.3 27.1 28.4 31.2 34 34.6 35.3
State & Local
Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan
The U.S. military, which is the largest purchaser of chemical and biological agent
detection equipment, has not reduced the number of programs and funding. The
size of the U.S. chemical and biological markets continue to increase.
11

Total U.S. Chemical and Biological Detection Market
Total Chemical and Biological Detection Market Spending by
Category (U.S.), 2006-2012
500
400
($ Million)
300
200
100
0
2006 2007 2008 2009 2010 2011 2012
14 32.6 19.3 19.8 22.6 28.8 31.8
Services
36.1 59.4 125.8 155.9 180.6 185.9 195
RDT&E
97.7 103.3 80.5 99.5 131.6 160.6 184.9
Procurement
Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan
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Key Participants
Total Chemical/ Biological Company Market Share (U.S.), 2007
10%
Smiths Detection
24%
General Dynamics-ATP
ITT
Ahura Scientific
Hamilton Sundstrand
28%
2%
AAI Engineering
3%
U.S. Genomics
3%
Idaho Technology
4%
SESI
Bechtel
5%
12%
4% Other
5%
Source: Frost & Sullivan
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Conclusion
Chemical/ Biological Company Market Assessment (U.S.), 2008
High
Most Attractive Markets
Attractiveness
Biological
Detection
Revenue
Chemical Attractiveness
Detection
High
Medium
Low
Low
Market Open
Significant
Openness Market
Barriers
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