Imagine an industry that is highly technology dependent. In fact, the creative use of new technology gave birth to this industry and the ongoing evolution of technology continues to have a profound impact. This industry is also totally dependent on a constant stream of creativity, new ideas and intellectual property. As this industry matured, it realized that effective marketing and sales efforts could significantly increase the success of its products. So this industry became dominated by large companies that were vertically integrated all the way from the beginning of the IP creative process through marketing, distribution and final point-of-sales. As these megaliths matured, they needed increasingly larger revenue streams to keep their growth rate high, and so they became more and more dependent on "blockbuster" products and the associated marketing to maintain that growth. The creative process suffered, as only products with perceived "blockbuster" potential got advanced, even though everyone acknowledged that it was very hard to predict what products would be a "blockbuster". So those involved in the creative process grew frustrated, and some left to work for younger, smaller companies that were focused only on the creative process, and which typically contracted with the large, megalithic companies for marketing and sales of their products. Eventually, the large megalithic companies became so ineffective at the creative process that they got out of that business, ceding that portion of the business to the small, creative companies, and focusing on what they were good at - marketing, sales and distribution. And to accompany the many small, IP-creating companies an equal number of small, young technology companies sprung up, for after all, the industry was and is still very technology driven.

Sound a bit like your industry? Well, I'm describing the motion picture industry, but the same scenario at various stages of evolution can be seen across many industries. This was the subject of a recent article by Liam Bernal in The Scientist, entitled "Why Pharma Must go Hollywood". In short, Bernal proposes that the pharma industry is going and must go through this same evolution. It's a fascinating read and in light of that premise, I thought it would be interesting to ponder the evolution of laboratory automation should this scenario come to pass. To assist in this pondering, I enlisted Charles R. Powell, Chief Commercial Officer of Aurora Biotechnologies. Charles has a well rounded past, having spent many years in the lab automation product division of Beckman Coulter as well as the investment banking industry with CIBC Oppenheimer where he focused on the biotech and pharma industry.

Charles points out that the current pharma model of automated drug discovery is based on the need to generate a large number of leads, to feed multiple therapeutic programs, hopefully eventually resulting in multiple new chemical entities hitting the market each year. The automation and informatics infrastructure needed to support and sustain such an approach is considerable, taking a good amount of money and time to develop and support. If, on the other hand, drug discovery were all done via many small biotechs, Charles feels that such companies would not likely be willing to make a similar financial investment in large infrastructure, nor would their program even require an infrastructure of that size. Perhaps more importantly, though, they would not be able to afford the time required to develop and implement a complicated infrastructure. Their corporate time frames are short and they have to be focused on generating science and IP rather than on building an infrastructure that may not pay off for many years.

Charles notes that you can already see examples of the pharma "Hollywood" model today, it's just not gone 100% that direction. Today, over a quarter of the products of the top 20 pharma companies are the result of in-licensed compounds. He refers to this movement as the "democratization" of drug discovery. Naturally, small drug discovery companies still need to do sophisticated science and still value technology that offered productivity improvements, although perhaps on a more personal scale. In this model, Charles thinks it'll be increasingly important to provide scientists with tools and consumables which allow them to "ask and answer" the same types of scientific questions that are explored in big pharma, but without the presence of large, expensive infrastructure. You could envision this being addressed via more pre-packaging of experimental tools. For instance, microplates sold already spotted with appropriate amounts of test compounds together with homogenous assay reagents provided at the proper concentration. A basic liquid handling device and plate reader would be all that was needed to support a moderate throughput screening effort.

The Lab Man would also point out that such a distributed R&D model would only increase the challenge of sharing data. This will heighten the need for products like ELN's that adhere to common standards of data interchange and offer organizations templates for data and terminology that multiple parties can agree upon.

How would this model affect the development of laboratory automation products? Charles speculates there would probably more outsourcing of areas of product development because with the de-emphasis on "big infrastructure" products, it'll be harder to sustain the need for continuous internal presence of certain types of expertise. Even large technology providers like Beckman-Coulter already practice this. In a way, this is just like Hollywood, where a small creative studio outsources special effects work to another company, who may in turn outsource work to model makers or computer graphics specialists. They all come together as a team for a specific project, but then go their separate ways when the project is done. If the "buying" players, i.e. pharma/biotech, are smaller and more decentralized, then the technology providing players also have to minimize their infrastructure investment and become more nimble.

If this sounds like a more uncertain and less stable environment all around, you're right. Ask people in the movie industry, or even those who work now for very young biotech companies. Innovation is driven by the need of all the small players to differentiate themselves, to stand out of the pack. Presumably in the "Hollywood" model, innovative companies would find each other and team up on a project basis, resulting in the periodic sensational product like occasionally comes out of Hollywood - something like the Lion King. Where would R&D money come from? The large Pharma's would still be out there doing marketing, sales and distribution, just like the current large Hollywood studios. They would probably be the primary source of funding for projects out amongst the collection of small R&D biotech's, along with private and public investment money.

So, is your industry "going Hollywood"? Are you ready?

As you read this, The Lab Man is in the Kashmir Himalaya, seeking enlightenment for yet more future blogs. Namaste! Keep reading! Please comment!

Domo Arigato, Mr. Roboto