Disclaimer: Combichem or HTE is definitely not my area of expertise. It is, therefore, inevitable that I’ll say something blindingly ignorant about it. Despite my admitted ignorance, is appears to me that there is something happening, some kind of phase shift, in the small molecule discovery marketplace that is of general interest to the chemical R&D community. In fact, it may just be part of an overall change in how we do chemistry in general.
I’ve been hearing no small amount of buzz from chemists in the job market about the flattening or even downturn of US pharma R&D in general and of combichem or High Throughput Experimentation (HTE) in particular. It is not that HTE is in any particular danger of extinction, but rather certain companies who offer the equipment platforms and tech packages seem to be evolving away from supplying equipment as a core business activity. Many of the big customers who could afford the initial cash outlay for HTE technology are doing their work in-house, dampening the demand for discovery services by HTE players at their aggressive prices.
One company I know has evidently shifted emphasis into the drug discovery field rather than try to continue marketing HTE equipment. Near as I can tell, they are betting that having their own drug candidates in the pipeline is a better strategy than being strictly a technology or R&D services supplier. Time will tell the tale.
What the honchos in the board rooms of America’s big corporations forget is that the art they export so profitably was in all likelihood developed by people educated in US taxpayer subsidized institutions with US government grants. American citizens subsidize the university research complex in this country and by extension, supply a brain subsidy to industry. To export chemical R&D is to subsidize the establishment of a similar R&D capacity in other nations. I think if you poll most US citizens, they’ll say that this is not the outcome they expected.
Software for HTE has become a derivative product that, for at least one HTE player, is proving to be rather successful. It isn’t enough to have the wet chemical equipment to make hundreds and thousands of compounds. You must be able to deal with the data storm that follows.
The business of HTE technology is evolving to a mature stage as the market comes to understand how to make and lose money with it. There is always a tension between “technology push” and “market pull”. It is often easier to respond to concrete demand with existing tools that to get new adopters to invest in leading edge tools to discover risky drug or catalyst candidates.
The extent to which the US chemical industry (all areas, including pharma and specialties) is outsourcing its R&D or simply moving it offshore is distressing. R&D is our magic. And promoting its execution offshore is to accelerate the de-industrialization of the USA. It is folly to train the workers of authoritarian nations like China to execute your high art. American companies must learn to perform R&D in an economically accessible way and keep the art in-house.
What makes R&D so expensive in the USA? Well, labor for one thing. In the end, our dependence on expensive PhD’s to do synthesis lab work may be a big part of our undoing. But there is much more to it than that. Look at the kinds of facilities that are built for chemical R&D. In the US and EU they are usually very expensive to build and maintain. Regulations and litigation avoidance are trending industry in the direction of ever more complex and high-overhead facilities in which to handle chemicals and conduct research.
Then there is the cost of every widget and substance associated with chemistry. Look at the pricing in the Aldrich catalog or get a quote from Agilent. Have a look at the actual invoice from your latest Aldrich order and look at the shipping cost. High isn’t it? We’ve accelerated our demand for ready-made raw materials and hyphenated instrumentation. To what extent are we gladly buying excess capacity? Who doesn’t have an instrument with functions and capabilities that have never been understood or used?
It is possible to conduct R&D under lean conditions. But it can’t be done cheaply in existing industrial R&D campuses. Cost effective R&D will require a recalibration for most chemists in terms of the kinds of working conditions and administrative services they expect. But business leaders will have to recalibrate as well. Prestige can be manifested in product quality and a sense of adventure and conviviality rather than in an edifice. There are companies all over the world doing this every day. They set up shop in a commercial condo or old industrial building with used office furniture and grubby floors. What matters in chemistry is what is happening (safely) in the reactor. Everything else is secondary.