The long-term forces shaping our markets are positive
The life science industry which Abcam serves is experiencing increases in research funding and capital investment to support the growth of collaborative and global biomedical discovery networks.
The Group’s addressable markets are currently estimated to total approximately $8bn. This figure is comprised of an addressable market for proteomic research reagents of approximately $3bn and an addressable market for out-licenced antibody development for diagnostic and therapeutic companies intended for clinical use, totalling approximately $5bn.
We expect the continuation of a number of industry forces to sustain long-term market growth trends across both research use only (RUO) and clinical use markets, resulting in increasing long-term demand for our products and services.
1. Strong funding environment for biomedical research
Life science research funding continues to grow in many countries around the world, driven by increased investment into biomedical research from a variety of sources, including governments, industry participants and private capital. Increased investment is funding translational research programmes associated with the development of nextgeneration therapies including immuno-oncology and immuno-therapy, treatments for chronic diseases associated with ageing populations, as well as rare and genetic diseases and the ongoing threat from infectious diseases. This trend is also leading to an increase in funding for industry-academia collaborations.
2. Focus on increased research reproducibility and reagent quality to reduce wasted time and resources
Beyond their use in therapeutics, antibodies play a vital role in biomedical research across the life science industry. The quality of research reagents is intrinsically linked to the reproducibility of data. High-quality research antibodies, providing high specificity, sensitivity and consistency are critical to increasing confidence in research outcomes and reducing the gratuitous expenditure of both time and funding resources.
With an estimated $17bn lost in avoidable experiment expenditure annually, against a backdrop of increased outsourcing of research and development in order to optimise efficiency and reduce lead times, the ability for researchers to source high-quality and validated reagents is increasingly important.
3. Growing significance of genomics and proteomics
Proteins play a central role in biological systems. Understanding protein function is increasingly seen as a complex, yet critical requirement to a better understanding of diseases and health and, by extension, health outcomes. The proliferation of genomic sequencing in recent years, driven by a rapid decline in sequencing costs, has led to a rapid rise in the identification of possible genetic targets and associated protein biomarkers for disease diagnosis and more personalised treatments.
To address this market opportunity in protein research, the proteomic tools industry is experiencing high rates of innovation and capital investment in support of myriad new solutions to discover and evaluate protein biomarkers. These technologies, many of which rely on high quality antibodies or affinity binders as part of the workflow, are not only enabling the simultaneous measurement of multiple proteins or biomarkers in a single sample (multiplex), but are also enabling greater sensitivity, higher speed, greater resolution, and increased automation and throughput, allowing for a comprehensive, quick analysis of multiple samples and/or protein targets.
These developments have the potential to significantly increase the efficiency and speed of biological research and thus the volume of data generated, which in turn drives advances in process design and development in an ongoing cycle. We believe all areas of proteomics research are benefiting from these trends.
1. Favourable demographic and epidemiologic trends
The global population is expected to rise to 10bn people by 2050, with the proportion of over 60s expected to reach over 20%, up from 12% in 2015. These trends, together with an increased prevalence of chronic diseases and a rising focus by governments on improving access to healthcare underpin the long-term growth in demand for biomedical research and healthcare services, including new diagnostics and treatments.
These trends may be further exacerbated by the COVID-19 pandemic, which has highlighted the importance of research and development in tackling major healthcare crises. The Centers for Medicare and Medicaid Services estimate that in the US, the total healthcare expenditure will increase from representing approximately 17.7% of gross domestic product in 2018 to approximately 19.4% in 2027.
In addition to the demographic trends driving the global demand for healthcare, there has been a steady rise in the population of the scientific community that forms a large part of our customer base. In the United Kingdom, for example, from 2015 to 2019, there was a 5% annual increase in the number of individuals who obtained higher education qualifications in Biological Sciences and a 10% annual increase in postgraduate degrees awarded during this same period (source: HESA).
2. China expansion and prioritisation of R&D
Despite short-term concerns over the economic outlook, the Chinese market represents a large and attractive long-term growth opportunity for life science research. Increasing health needs, driven by an ageing population, continue to drive heightened impetus for healthcare and innovation. In 2020, China increased government spending on research and development by over 10% to $376bn, an equivalent to 2.4% of the country’s GDP (source: Chinese Ministry of Science).
The Chinese government has placed scientific and technological innovation at the centre of the long-term socio-economic development of the country and is supporting this initiative through funding, reform and societal status. The pursuit of innovation-driven development is at the core of China’s 14th five-year plan (2021-2025) which calls for R&D spending to increase by more than 7% a year during the period of the plan. Within this, the share of spending on basic research is planned to increase sharply, from 6% of R&D expenditure in 2019 to 8% in the 14th FYP.
According to Nature, the leading science journal, in 2020 China’s share of global natural science research increased by 15% (Source: Nature Index 2020 Annual Tables) and the supportive backdrop in the country means the increases in research output seen over recent years will continue.
In CY2021, China’s contribution to Abcam’s catalogue sales rose to over 19% (CY2020: 17%). We believe the Chinese market has the potential to grow to become the same size as the US market for our business over the next 15 years.
We believe that we are well positioned to leverage our expertise in protein binding reagents to support clinical and instrument platforms, capturing greater market share and driving growth within these markets as a result.
Learn more about the drivers of the proteomic research reagents market
Learn more about the market for third party antibody development in clinical applications