CHEMINFORMATICS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

Market Challenges And Opportunities

Cheminformatics Market Drivers

• Increasing R&D investments in pharmaceutical and biotechnology industries: The pharmaceutical and biotechnology industries are steadily increasing their R&D investments to discover novel drugs and biologics. The average cost of developing a new drug is estimated to be over US$2.50 billion. Companies are adopting the latest technologies, like cheminformatics, to make the long and expensive drug discovery process more efficient. For instance, in 2021, the global pharmaceutical R&D spending was estimated to be US$179 billion, increasing by about 3% over 2020. The expanding R&D budgets create significant opportunities for growth of the cheminformatics market. Moreover, according to the 2022 EU Industrial R&D Investment Scoreboard, health industries invested about US$ 266.40 billion (€235.3 billion) in R&D in 2021, accounting for 21.5% of total business R&D expenditure worldwide.
• High throughput screening and combinatorial chemistry: High throughput screening allows rapidly testing thousands of chemical compounds against therapeutic targets. Combinatorial chemistry produces large compound libraries for high throughput screening. This generates huge volumes of chemical data. Cheminformatics plays a vital role in analyzing this data and identifying hit compounds. For example, machine learning models can predict properties of virtual compounds to focus screening on compounds with desired characteristics. The growing adoption of HTS and combinatorial chemistry drives cheminformatics software adoption.
• Growth in biosimilars and biologics: Biologics, including monoclonal antibodies and recombinant proteins, are complex, large molecules. Their discovery and development require specialized modeling and simulation tools provided by cheminformatics software. The increasing number of approved biologics and the upcoming patent expiration of blockbuster biologics are expected to drive the growth of biosimilars. Cheminformatics enhances the characterization, production, and quality control of biosimilars. According to estimates, the global biosimilars market is projected to grow at a CAGR of over 30% from 2022 to 2030.
• Increasing adoption of cloud-based solutions: Cloud-based cheminformatics software enables researchers to access advanced modeling and simulation capabilities on-demand through cloud infrastructure. It allows companies to reduce upfront costs associated with on-premise solutions. Small companies also gain access to enterprise-level cheminformatics capabilities. Cloud solutions also offer advantages like better collaboration, scalability, and regular feature upgrades. The growing trend of adopting cloud-based solutions is expected to provide growth opportunities.

Cheminformatics Market Opportunities

• Integration with emerging technologies: There are significant opportunities for the integration of cheminformatics software with emerging technologies like artificial intelligence, machine learning, and automation. AI can analyze large chemical datasets through high-throughput screening to predict the properties of new molecular structures. Automation can help accelerate workflows in repetitive tasks like data entry, analysis and reporting. For example, advanced algorithms can systematically traverse chemical space to generate focused virtual compound libraries. Integrating these technologies can enhance productivity. For instance, on March 28, 2023, Simulations Plus, Inc., a leading provider of modeling and simulation software and services for pharmaceutical safety and efficacy, announced that it established a strategic research collaboration with the Sino-American Cancer Foundation (SACF). This collaboration will leverage Simulations Plus’ staff and Artificial Intelligence-driven Drug Design (AIDD) technology in the ADMET Predictor software platform to support the discovery and design of novel inhibitors of methylenetetrahydrofolate dehydrogenase 2 (MTHFD2), an emerging cancer target.
• Expansion in emerging markets: Emerging pharmaceutical markets in Asia Pacific, Latin America, and Middle East & Africa offer lucrative growth opportunities for cheminformatics software providers. The increasing investments in biopharmaceutical research and favorable government policies are attracting companies to these markets. Local companies are also increasingly adopting newer technologies. Setting up partnerships and providing localized solutions tailored to market needs can help strengthen presence in emerging markets.
• Growing focus on rare and orphan diseases: The emerging focus on developing treatments for rare and orphan diseases presents an opportunity for cheminformatics software. These diseases have complex underlying mechanisms and often lack clarity on therapeutic targets. Cheminformatics can assist in understanding disease pathways and identifying suitable drug molecules through modeling molecular interactions. Companies can leverage these benefits and develop specialized modeling solutions for rare disease drug discovery.
• Entry of new players: The cheminformatics software market has high entry barriers due to the initial investments required in R&D and advanced algorithm development. However, the increasing adoption of cloud-based solutions offers opportunities for specialized technology companies to enter this space through strategic partnerships. Emerging companies focused on AI and ML can partner with pharmaceutical companies to transform legacy workflows by integrating new capabilities. This can expand the range of solutions on offer.

Cheminformatics Market Restraints

• High upfront costs: Cheminformatics software solutions require large investments in licensing, hardware, maintenance, training and integration. Companies must strategically evaluate expected ROI from automation of specific drug discovery processes before software purchase. Many smaller companies cannot afford large upfront expenses, limiting adoption. However, the availability of scalable cloud-based pricing models is expected to address cost concerns and drive broader adoption.
• Shortage of trained personnel: The efficient use of cheminformatics platforms requires researchers trained in deploying, operating, and maintaining complex software tools. However, there is a shortage of personnel with specialized skills like software coding, computation chemistry knowledge, and data analytics experience. Educational institutes must develop targeted cross-disciplinary training programs and industry collaborations to address this gap in skilled labor.
• Integration challenges: Seamless integration of cheminformatics tools with existing research workflows poses challenges for technology adoption. For instance, legacy enterprise systems may lack the capabilities to interface with newer software. Migrating historical data to new structured formats can be difficult. Companies must properly evaluate integration requirements during technology evaluation to maximize benefits and ROI from investments.