It was billed as "A Kaleidoscope of Chemistry." But the 49th Pittsburgh Conference & Exposition on Analytical Chemistry & Applied Spectroscopy, held earlier this month in New Orleans, also was about endurance and survival. Any visitor who wanted to at least walk by the booths of each of the more than 1,000 exhibitors had to trek more than 7 miles, according to one estimate. That took stamina.

For exhibitors, Pittcon is a matter of survival. They come to the show each year to find new customers for their wares. But they also come to show their competitors that they are a force to be reckoned with in the marketplace. Survival also leads many people to come to Pittcon "to sell themselves or buy someone else's expertise," writes James F. Ryan, editor of Today's Chemist at Work, in a commentary in last month's issue of that magazine. "Pittcon has become an excellent place to recruit instrument distributors." Furthermore, Ryan notes, "if a firm is in the market for a merger or acquisition, Pittcon is a great place to size up candidates."

At Pittcon '98, in fact, there was much talk about mergers and acquisitions, which lately have climbed to new heights. In 1997, mergers and acquisitions in the world's analytical instrument and laboratory equipment industries rose to a record value of over $5.5 billion-more than double the 1996 figure of $2.2 billion, according to Analytical Instrument Industry Report. Although the 1997 figure was inflated by the inclusion of Beckman Instruments' $1.1 billion purchase of Coulter Corp. and the $1 billion recapitalization of Fisher Scientific, the number of mergers and acquisitions-more than 85-also was a record, according to AII Report.

"If you're looking for trends," says Gordon Wilkinson, managing editor of the British-based AII Report, "then 1997 was the year when well-established companies made acquisitions or entered alliances that gave them access to technologies and products for the high-throughput screening and drug-discovery markets." Examples include Beckman's acquisition of robotics pioneer Sagian; Perkin-Elmer's (PE) purchase of PerSeptive Biosystems plus a controlling stake in Tecan US; Waters Corp.'s addition of Micromass; and Hewlett-Packard's (HP) investment in drug-discovery start-up Irori.

Such mergers, acquisitions, and partnerships are driven by many forces, but the bottom line is survival in the marketplace. And to survive, a company must compete effectively by providing a broad range of solutions to customers' problems and more efficient service and support. As Peter Barrett, PE vice president for corporate business development, noted at a press luncheon in New Orleans, life scientists don't want to buy instruments-they want to buy solutions. And new technologies provide new solutions. Traditionally, those technologies often are developed in-house, but they can be acquired more quickly from other companies.

Thus, for example, PE announced at Pittcon '98 that its analytical instruments division has acquired rights to electrochemical sensor technology from Giner Inc., a 25-year-old Waltham, Mass.-based R&D company. The technology will be used to design measurement systems for medical diagnostics, environmental monitoring, and other areas critical to public health. Like other agreements and alliances recently announced by PE, this one will provide its customers with more application-specific analytical solutions.

Likewise, Beckman's merger with Coulter to form Beckman Coulter is aimed at improving the company's survivability because the new entity will be able to offer researchers in the life sciences a more diverse array of products or solutions from a single source. Beckman Coulter also is focusing on helping its customers improve lab processes to achieve greater efficiencies and productivity.

At a Pittcon '98 seminar on trends in analytical instruments sponsored by InfoScience Services, a consulting firm in Northbrook, Ill., several speakers pointed out that the pressure to produce more product-and to do it more efficiently-is one of the driving forces in the analytical instrument industry. The productivity pressure on pharmaceutical companies, in particular, is enormous, noted one of the speakers, Robert J. Olan, a health care research analyst with New York City-based investment bankers Hambrecht & Quist LLC. That pressure is leading to the industrialization of pharmaceutical labs, he said. "Drug development will occur less through serendipity and individual creativity and more through raw throughput and processing power."

The growing pressure to increase the number of new pharmaceuticals also was addressed at an HP press briefing by Vince Dauciunas, business development manager of the Chemical Analysis Group. He pointed to "competitive price pressures on existing drugs, the increased role of managed health care plans, tough competition, drugs coming off patent opening the door to cheaper competition, and the need to be number one or number two with a new drug" as all having combined to force companies to respond with initiatives to increase research productivity. Drug manufacturers are trying to increase output from an average of one new drug every year or two to three drugs per year in 2000, Dauciunas noted.

TO SIDEBAR: Pittcon approaches its 50th birthday

While companies are trying to boost output, the cost of the drug-development process itself continues to rise. Each new drug costs an estimated $200 million to $400 million and takes up to a dozen years to bring to market, he said. "Imagine running a business where your project managers want you to commit $100,000 a day for eight years, and you won't know if you'll make a profit until the very end!"

To cut the discovery and development time, drug companies will have to understand and improve the entire process. This approach also will involve reworking their global information technology infrastructures to make their researchers more efficient, Dauciunas believes.

In the discovery phase, he explained, researchers seek to identify fundamental disease-causing mechanisms. The key technologies they use are genomics and proteomics-the systematic search for the genetic and protein underpinnings of disease. DNA sequencers and synthesizers and protein sequencers and synthesizers are used to discover and validate biological targets, Dauciunas explained. Mass spectrometry (MS) will have a growing role, HP believes. And "there is growing excitement over the ability of DNA arrays to test large numbers of samples very quickly and accurately," he said.

Early in the development phase, researchers search for molecules (leads) that can interact with the biological target in the desired way, either turning on or turning off a cellular mechanism. Combinatorial chemistry has caught on as a way to quickly synthesize thousands of candidate drugs. Purification and characterization of these potential leads is accomplished by using automated synthesizers, liquid chromatography, MS, X-ray crystallography, and nuclear magnetic resonance spectroscopy.

To choose from the thousands of possibilities generated combinatorially, high-throughput molecular screening is used to determine how effectively the leads interact with the biological target of interest. Techniques used here include fluorescence and radioisotope labeling, and soon, Dauciunas said, MS may serve as a high-speed screening tool.

Not surprisingly, all these instrumental techniques and assays can generate enough data to overwhelm researchers. At a Zymark Corp. press briefing, President and Chief Executive Officer Kevin Hrusovsky noted that it is not unusual for more than 100,000 data points per day to be generated in the development of a new drug. Informatics-the collection of information management techniques that turns these data into usable knowledge-is becoming more and more important, he said. And instrument companies that understand this are moving fast to combine analytical and informatics technologies to create new solutions to the customer problem of too much data.

Hrusovsky also pointed out that automation platforms can accelerate the discovery and development process that leads to new drugs. Many customers want platforms that allow them to use Zymark automated workstations and other systems together with the products of several other instrument companies. So in the past 12 months, Zymark has forged partnerships with 25 other companies. Zymark has worked with these companies-including Dionex, Millipore, HP, and PE-to make their systems so compatible that the customer is offered "a seamless solution," in the words of one product manager.

The growing impact of drug discovery on the analytical instrument market also was the theme of this year's annual Pittcon breakfast hosted by Centcom Ltd., the advertising sales management company for American Chemical Society publications, including C&EN. Even before the morning's program began, attendees received a flyer promoting a new ACS magazine-Modern Drug Discovery-that will premiere this fall. The publication, with a planned circulation of 40,000, is aimed at the growing audience of chemists and other scientists in drug discovery and life science research.

First on the Centcom program was K. C. Warawa, president of K. C. Associates, a market research firm in Wilmington, Del. She presented some facts and figures about the pharmaceutical industry culled from various sources. She noted, for instance, that the worldwide pharmaceutical market reached $297 billion in sales in 1997 and is expected to climb to $378 billion by 2001. By comparison, the analytical instrument market is about $12 billion.

Investments in drug R&D are "staggering," Warawa said. According to a 1998 survey by Pharmaceutical Research & Manufacturers of America, research-based drug companies in the U.S. are expected to invest $20.6 billion in R&D in 1998-a 10.7% increase over last year's investment. This level of R&D spending is equal to 19.6% of the industry's annual revenues." That's one dollar in every five going into R&D," she pointed out.

Earlier this year, K. C. Associates polled members of the pharmaceutical industry to get a snapshot of the industry's activities. Of the 700 respondents, about 8% said their organization is involved in multiple parallel synthesis, 10% in genomics, 16% in high-throughput screening and combinatorial chemistry, and 17% in modeling for rational drug design. Obviously, Warawa noted, other methods-those of traditional organic chemistry-are still very much in place in many organizations.

When respondents were asked how their organization's involvement in genomics, high-throughput screening, or combinatorial chemistry would change in the next three years, a majority (54 to 61%) said it would increase; most of the remaining respondents said it would stay the same. Responses to other questions indicated that in the next three years, multiple parallel synthesis and combinatorial chemistry are expected to grow at the expense of traditional synthesis.

Why are these changes occurring? Warawa's survey suggests one key answer: Almost one-third of the companies said their goals for new drugs had not been met in the past two years. So they're trying newer techniques to up their productivity. But about one-quarter of the companies don't expect to meet their goals in the next three years or aren't sure if they will.

Following Warawa, Don Schoeny, senior vice president for worldwide sales, service, and support at PerSeptive Biosystems, took the podium to address what he sees are the many opportunities and challenges in the pharmaceutical and analytical instrument industries. He told his audience of top industry executives that there are "huge opportunities for everybody in this room" and for the pharmaceutical industry in general. But things will have to change. For example, he said, "the drug-development cycle is 12 to 13 years, and it's too long." Typically 6,200 to 8,000 compounds are synthesized, from which" you end up with 21 targets." Of those, six or seven end up being tested in humans, two or three actually make it to Phase III clinical trials, "and you end up with one approved drug." That development cycle" has got to move down to the six- to seven-year range. Many people think that's possible by 2000 or 2002."

He pointed out that a number of other paradigm shifts are in progress or need to be. Natural product leads are giving way to combinatorial chemistry leads. One-at-a-time processes are yielding to massively parallel ones. The organization of many companies is shifting away from disciplinary groups such as "the mass spec lab" to functional groups such as "the cancer group." Individual strategy, which led to" too much reinventing of the wheel," is being replaced by systemization-sharing and integrating information across the industry. And lastly, drug development is moving more toward protein- and peptide-based drugs. "Many of the companies that missed the great gold rush of genomics are investing heavily now in proteomics," Schoeny said. "They don't want to miss the second gold rush. And I think that's going to be a great opportunity."

But the emergence of proteomics also is a big challenge, he said. Protein- and peptide-based drugs are not as easy to handle, measure, and understand as small-molecule drugs. Of the top 10 pharmaceuticals in 1996, nine were small-molecule drugs and only one was a protein-based drug, according to Schoeny. But that's changing.

"Drug discovery itself is an emerging industry," he noted, and "it's all about measurements." The industry needs to move toward greater reproducibility, more user-friendly measurement techniques, integration of measurements and informatics, and rapid purification of proteins, to name just a few issues that Schoeny touched on.

"Collaborations and alliances are going to be key in the future," he said. Just as none of the drug companies wants to build its own trucks to take drugs to market, none of them wants to invent its measurement, screening, or combinatorial chemistry solutions." They want to buy them."

Schoeny also made a plea to his listeners to "make high tech usable [by] real human beings who don't want to be technowizards." Imagine, he said, trying to market a conveyance system that includes both a 20-gal container of a highly explosive, lethal fluid and a device powered by thousands of controlled explosions per second: "A conveyance system that, when used by a normal operator, could be lethal and has more microprocessors in it than probably the PC sitting on your desk." This conveyance system, marketed as an automobile, "is much more complex than a mass spectrometer. And yet everybody here can use one." Why not make analytical instruments that easy to use? he asked.

Part of the reason this has not been done, he suggested, is that "there is no next-bench syndrome." In the electrical instrument world, for instance, "people who design voltmeters for a living work next to people who use voltmeters for a living." They speak the same language. But engineers who design instruments for drug discovery don't use those instruments in their work. "Your engineers ... have got to learn to speak to microbiologists and cell chemists," Schoeny said. "If you want to succeed in the drug-discovery industry," you have to adopt this new manufacturing paradigm.

The final speaker of the morning- Kenneth G. Krul, president of the Panda Group, an industry consulting firm in Rancho La Costa, Calif.-touched on some of these same themes of challenge and opportunity. Krul, though, placed them in a personal context by urging his listeners to meet the challenge, and in doing so," make an impact on the world that I don't think you've ever been able to make before." By producing better, less expensive, and more effective drugs, diagnostic tests, and related products, he said, people in the pharmaceutical industry can share in the "great feeling" that they have helped someone. "And some day you can walk up to [a stranger] and say, 'I don't know you, but I've had a major part in your life.'" So, Krul concluded, "I'm looking forward to seeing from this group the instrumentation that will make tomorrow's pharmaceutical industry better."

COMBINATORIAL CHEMISTRY POSES ANALYTICAL CHALLENGES

CHROMATOGRAPHY, MASS SPECTROMETRY, AND NMR

OPTICAL SPECTROSCOPY