Prospering in a Down Market: Strategies for Life Science Suppliers Executive Summary Page 1 of 7
©2009 BioInformatics, LLC
EXECUTIVE SUMMARY
Prospering in a Down Market: Strategies for Life Science Suppliers
REPORT #09-001 March 2009
Print: $3,200 $2,700Electronic (.pdf): $5,200 $4,500
Enterprise: $7,940 $6,750
Overview
With an estimated $21.5 billion in federal research and development (R&D) funding signed into law on February 17th, many suppliers are breathing a sigh of relief that the life science market will be immune from the global economic crisis. But it is unclear how quickly these funds will be released, what programs will be funded, and how much of this infusion will translate into purchases of instruments, kits and reagents. In the meantime, pharmaceutical, biotechnology, academic and government labs continue to react to the deepening recession with budget freezes and staff reductions. In fact, 65% of the scientists surveyed report that their research has already been affected by the downturn in the economy.
During this tumultuous time in our industry, the opportunity for life science suppliers to thrive—rather than survive—will be predicated on a detailed understanding of how labs will allocate 2009 funds. This report, scheduled for release in March is designed to provide guidance, backed by hard data, as to how scientists plan to cut corners, modify experiments and change purchasing behaviors in response to shrinking budgets. With unparalleled access to the voice of the customer, BioInformatics, LLC analyzes in this report the broad scope of how scientists plan to control lab costs, what products will be affected and the degree of concern scientists have about the economic climate.
Providing a roadmap for the life science supplier, this study compares and contrasts FY2008 (actual) and FY2009 (projected) budgets, revealing anticipated trends and changes. Expenditures for capital equipment (greater than $25k), instrumentation ($25k or less) and consumables are detailed, and sources of funding for research and drug discovery are listed for both years. Fourteen product categories are examined using multiple variables, including current suppliers, price points that increase likelihood of switching and projected expenditures through FY10. Additionally, the respondents provide insight as to how their labs are adapting to this crisis—65% of those surveyed say their organization has already implemented a hiring freeze and 63% are delaying or canceling non-essential purchases for their labs.
Quick responders will win in this tight economy. Prospering in a Down Market: Strategies for Life Science Suppliers is not only a compilation of how life science customers are planning to allocate 2009 budgets; it also outlines in detail how scientists expect suppliers to respond. Scientists share their opinions about how suppliers can differentiate
themselves, and what types of incentives, discounts and packaging would entice a lab to purchase more. The study also includes feedback as to whether or not scientists will turn to vendors for advice—on how to conserve reagents, how to preserve the shelf-life of instrumentation and how to go “green,” thereby counting on suppliers to become more involved in promoting efficient operations in the lab.
With a fifteen-year tradition of informing life science supplier strategy, BioInformatics’ March release of this report will make the first step of decision-making—finding out how customers plan to spend their money—both timely and accurate. In light of budget cuts and in the spirit of collaboration with life science suppliers, Prospering in a Down Market: Strategies for Life Science Suppliers will be available at a pre-release price of $2,700 (print copy only), $4,500 (electronic plus print copy), or $6,750 (enterprise) until March 15, 2009. A comprehensive study packed with responses from the people who have budget authority and/or make purchasing recommendations in the lab, this report is mandatory for the life science supplier who intends to come out ahead in 2009.
Contact us at 703.778.3080 x13 to review the study questionnaire fielded to more than
500 U.S. life scientists.
How This Report Can Be Used
• Prepare to answer the urgent questions from Boards of Directors, analysts and investors.
• Pinpoint areas of growth, stability and decline by market segment, region and product category
• Reposition marketing and sales resources across major product categories.
• Tailor marketing programs to enhance customer loyalty and prevent switching to lower cost suppliers.
• Focus R&D and Product Development on areas of growth.
This pre-publication discount price is only available until March 15, 2009!
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BioInformaticsmarket insights from gene to drug
I. The Impact of the Economic Crisis on Laboratory Budgets
• Fiscal year starts/ends
• FY08 Lab budget
• FY09 Lab budget
• Percentage spent on
Capital equipment (>$25,000)
Instrumentation (<$25,000)
Consumables
Other
• Sources of funding FY08 and FY09
Percent of funding by source
Anticipated change in FY09
Anticipated change in through 2011
II. Scientists’ Reactions to the Current Economic Climate
• Impact economic recession on current research
• Level of concern
Perception of overall impact compared to other
Specific budget cutbacks in the lab
Specific budget cutbacks in the institution
• Overall impact on purchasing
• Changes in grant applications
III. Anticipated Changes in Laboratory Purchases in 14 Product Categories
• Products in use/Primary Supplier
Cell biology instruments—Flow cytometer-based
Cell biology instruments—Microscope-based
Cell biology kits and reagents
Cell culture media and reagents
Computer hardware
Gene expression analysis products
High throughput screening and analysis systems
Image analysis systems
Instrumentation for genomic analysis
Instrumentation for protein analysis
Laboratory plasticware
Nucleic acid purification and separation products
Protein purification and separation products
RNAi products
• Anticipated change in purchases by product category
• Planned capital equipment purchases by product category
• Potential for customer switching
IV. The Adoption of Cost-Saving Lab Practices
• Cost saving measures employed
• Planned Cost saving measures
Bulk ordering
Change direction of inquiry
Conservation measures
Decrease/stop long-term experiments
Defer capital equipment purchases
Delay/cancel nonessential purchases
Downsize staff
Halt new initiatives
Increase energy efficiency
Increase the use of core facilities
Lease instrumentation
Outsource work
Participate in “reagent rental” programs
Postpone or suspend projects
Postpone or suspend specific experiments
Purchase through alternative channels
Purchase/acquire used instrumentation
Purchasing groups
Reduce/cease experiments with animals
Rent instrumentation for the duration of a project
Reuse products
Share resources with other labs
Standing orders
Switch to less expensive alternatives
• Interest in used lab equipment
• Impact of cost saving measures on service contracts
• Attractiveness of special offers from suppliers
• Interest in assistance/advice of suppliers
• Credibility of supplier advice
• Interest in environmentally-friendly products
Additional Analysis by
Years of experience
Lab size
Purchasing authority (consumables)
Purchasing authority (instrumentation)
Product category
Market segment
U.S. geographic region
Appendix A. Verbatim responses to the questions:
• Despite this economic recession, is your lab planning on adopting new technologies this year? Why or why not? If so, which technology(ies) will your lab will be adopting?
• Do you think your research or the research in your field will change due to policies implemented by the new presidential administration? Why or why not?
Prospering in a Down Market: Strategies for Life Science Suppliers Executive Summary Page 2 of 7
©2009 BioInformatics, LLC
Report HighlightsProspering in a Down Market: Strategies for Life Science SuppliersREPORT #09-001
Prospering in a Down Market: Strategies for Life Science Suppliers is based on responses to a 43-question online survey conducted by BioInformatics, LLC. The questionnaire was completed by 530 life scientists in the U.S. between January 30 and February 2, 2009. To be eligible to complete the questionnaire, all respondents were required to demonstrate knowledge of the laboratory’s annual budget and be regular users of at least one of the 14 specified product categories. The questions were answered by highly-qualified members of The Science Advisory Board™. BioInformatics sponsors The Science Advisory Board™, an online community of more than 40,000 scientists engaged in basic biological research, clinical research and drug discovery and development. These experts have agreed to make themselves available to answer questions including emerging areas of research, the tools and techniques used in their labs, and their satisfaction with their current suppliers.
Prospering in a Down Market: Strategies for Life Science Suppliers Executive Summary Page 3 of 7
©2009 BioInformatics, LLC
Methodology
A Highly-Qualified Survey Population
The 530 scientists were pre-screened to ensure a representative sampling of the U.S. life science market reflective of our clients’ product offerings in 14 product segments.
All Major U.S. Market Segments Represented Perspectives From Across the Life Science Spectrum
Academic
53%Industrial
39%
Government
8% 71%
32%
18%
17%
16%
12%
3%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Basic research
Drug discovery/development
Preclinical research
Translational research
Clinical research
Molecular diagnostics
Other
Prospering in a Down Market: Strategies for Life Science Suppliers, BioInformatics, LLC’s first report of 2009 provides detailed insight into each of the following topics:
• Understand current sources of funding for research and drug discovery and what effect the current economic situation will have on each, including a FY2008/FY2009 comparison.
• Measure life scientists’ near-term level of concern with the impact of the economic crisis on their lab's operating budget.
• Correlate level of concern with planned purchases in 14 product categories.
• Identify strategies life scientists intend to employ to “stretch” budgets and suggest effective positioning and marketing programs for suppliers.
Report Objectives
(continued)
The Voice of Experience…With Purchasing Authority
Budget Authority—Instruments Budget Authority—Consumables
Less than 5 years
0% 5 to 10 years
15%
11 to 15 years
29%
16 to 20 years
24%
21 to 25 years
15%
More than 25 years
17%
Evaluate
instrumentation and
make recommendations
54%
I have budget authority
for and/or authorize
these purchases
43%
End-user only
3%
Evaluate consumables
and make
recommendations
37%
End-user only
3%
I have budget authority
for and/or authorize
these purchases
60%
A Highly-Qualified Survey Population (continued)
Prospering in a Down Market: Strategies for Life Science Suppliers Executive Summary Page 4 of 7
©2009 BioInformatics, LLC
A Breadth of Scientific Knowledge and Job Responsibilities
15%
16%
17%
20%
21%
23%
26%
41%
41%
49%
0% 10% 20% 30% 40% 50% 60%
Oncology
Microbiology
Protein Chemistry
Immunology/Virology
Genetics
Drug Discovery/R&D
Biotechnology
Cell Biology
Biochemistry
Molecular Biology29%
25%
19%
12%
11%
3%
3%
0% 5% 10% 15% 20% 25% 30% 35%
Staff Scientist
Principal Investigator
Lab Director/Supervisor/
Coordinator
Post Doctoral Fellow
Professor/Teacher
Laboratory Technician
Other
Prospering in a Down Market: Strategies for Life Science Suppliers Executive Summary Page 5 of 7
©2009 BioInformatics, LLC
Other Recent Publications*
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Why Purchase Our Reports?Our published reports have several unique qualities that create value unmatched by other firms:
Sources of Independent, Unbiased ResearchUnlike reports from other firms that are based on an analyst’s subjective summary of information from publicly available sources, our reports are based on the results of detailed surveys of hundreds—even thousands—of scientific and medical professionals who buy your products.
Developed by a Team of ExpertsOur questionnaires are developed by a multi-disciplinary team of scientists, industry veterans and market research experts with years of experience. These professionals understand that survey questions need to be asked in a way that ensures the answers will directly address the business challenges you face. Once the survey data is collected, this same team creates a unique report that presents the reader with a thorough understanding of the topic and the scientific and business implications of the results based on sophisticated statistical analytics.
Carefully Selected Survey ParticipantsWhen others promote results from their online surveys, they fail to mention the uncontrolled nature of their broadcast email invitations. To provide you with the most valid and accurate results possible, the respondents to our surveys are
members of our unique online panel—The Science Advisory Board—which consists of more than 42,000 verified life science and biomedical professionals who have agreed to take part in our surveys, focus groups and other market research activities. These respondents are carefully selected based on their professional qualifications, market segments and geographic regions—we can even select them based on the products they use and their preferred suppliers.
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*See Web site www.gene2drug.com for a complete listing.
Prospering in a Down Market: Strategies for Life Science Suppliers Executive Summary Page 6 of 7
©2009 BioInformatics, LLC
About BioInformatics, LLC Since our inception in 1994, BioInformatics has provided critical market intelligence to leading companies serving the life science, medical device 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 from gene to drug.
Our multi-disciplinary team of scientific experts and business analysts creates value for our clients by combining extensive industry knowledge and experience. We offer a variety of products and services that enable executives to see themselves, their market and their competitors through the eyes of the most important information source of all—customers. We can precisely meet the needs of our clients through the most appropriate mix of research methodologies, including:
• Online Surveys• Online Focus Groups• Mail Surveys• Telephone Interviews
Our strength lies in our ability to integrate our understanding of science and medicine with cutting-edge market research techniques. As one of the first firms to recognize how the World Wide Web has transformed market research, BioInformatics formed The Science Advisory Board. Launched in 1997, this global community currently consists of more than 42,000 life science researchers, physicians and biomedical professionals who convene regularly via the Web to voice their opinions on a wide variety of issues relating to biomedical research and clinical technologies. Clients tap into this panel of experts and receive answers to their critical marketing questions in days, rather than weeks. In addition to providing real-time insights into the perceptions of the market, posing questions to The Science Advisory Board offers substantial cost savings over gathering information via traditional market research techniques.
BioInformatics offers both published reports and custom research services. Published reports allow marketing professionals to share in the results of broad-based market studies that provide access to high quality research at an affordable price. Our custom research is tailored to the specific needs of the company’s executive management. For more information about BioInformatics’ product and service offerings, please visit our Web site at www.gene2drug.com, call 703.778.3080 or email [email protected].
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REPORT #09-001 Prospering in a Down Market: Strategies for Life Science Suppliers
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BioInformaticsmarket insights from gene to drug