Tiny Technology Promises Tremendous Profits

See also, "Making Every Nanoliter Count," Microfluidics, the technology of handling liquids on an extremely small scale, promises to enter the commercial marketplace in a big way during the next three years. This so-called lab-on-a-chip technology may offer enormous cost advantages in scientific processes ranging from artificial insemination in cattle to lab analyses in hospitals. Scientists expect it to increase the efficiency of biological tests and analyses by requiring far smaller amounts of samples. Surabhi Garg, industry manager for drug discovery technology at the Palo Alto, Calif.-based market research firm of Frost & Sullivan, estimates the microfluidics market at $3.4 billion by 2004. "We are talking about an emerging industry. It will have an explosive growth," she says. According to Garg, what's driving this market is the promise of replacing an array of laboratory apparatuses with a microchip that can be put into a personal computer. Garg is not alone in her optimism. "The value proposition is that you're going to be able to do what is done today more efficiently and more cheaply. In a lot of life science experimentation, ... one of the highest-cost items is the reagent," says John Kim, a managing director of Burrill & Co., a San Francisco-based investment firm. These reagents can be difficult-to-make molecular compounds used in various analyses. Using far smaller amounts to test efficacy can make sound financial sense. "This technology has a possibility to build a process that's better, cheaper, faster," he says. Other reports are only a bit more modest. Analyst Marlene Bourne in 1997 forecast a $1.7 billion market for the technology by 2003 for Business Communications Co. of Norwalk, Conn. Wide Range Courtesy of the University of Wisconsin, Madison A graduate student in biomedical engineering at the University of Wisconsin-Madison, shows a microfluidic channel for culturing embryos. One scientist heavily involved in microfluidics, both as a researcher and entrepreneur, is skeptical about such figures. "Microfluidics is very much in its infancy in terms of commercialization," says David Beebe, associate professor of biomedical engineering at the University of Wisconsin-Madison, and cofounder of Vitae LLC, a small firm working to use the technology in artificial insemination in the dairy industry. "Pick a number, I'll justify [it] for you," he adds, doubtfully. "We don't know what all the applications are yet, and which ones are going to work and which aren't." The artificial-insemination application alone, Beebe says, could produce anywhere from a $100 million to a $1 billion market for microfluidics--a wide range. Factors such as the costs of a microfluidics device in that particular market can help determine whether the technology will find a niche. Though optimistic, Kim says boosters of microfluidics must prove its value. "As with adoption of any new technology, where people's current needs are being served, whether optimally or not, that's the question. There are switchover costs--there are training costs, [and] industry inertia possibly to adopt this platform, and frankly I think the microfluidics industry really has to prove its value proposition in a robust way to convince potential customers of the economic benefits of switching over," maintains Kim. His firm has invested in microfluidics companies, such as ACLARA Biosciences of Mountain View, Calif. Orchid Bioscience of Princeton, NJ, is planning to use microfluidics in the analysis of single nucleotide polymorphisms (SNPs) in 2002. The technology is being used to save money, says Gary Schnerr, Orchid's executive director of engineering and instrument systems. "The price pressure on SNP analysis is increasing, and one of the ways of reducing that cost is packing things tightly together, which speaks of microfluidics. To conduct the large-scale SNP analysis our customers would like to do, we are applying innovative technology to reduce costs." Schnerr says the company hopes microfluidics will provide it a competitive advantage, by dramatically reducing the volume of reagents used. "That's where you're going to drive the cost," he says. Schnerr would not name the reagents for proprietary reasons. He did though, indicate that the cost to clients using the company's SNP analysis service today ranges from 50 to 75 cents per genotype to "multiple dollars." "We see prices going down to 25 to 30 cents per genotype and then going further for very large volume projects as microfluidics is developed," he says. Market Positioning The benefits of using microfluidics for SNP technology could depend on the advancement of other technologies, Beebe cautions. "SNPs is a huge market area. Whether microfluidics will play a significant role--my opinion is now, who knows?" he comments. Although Orchid Bioscience plans on using its microfluidics technology in-house in a service capacity, other firms are forming alliances with companies specializing in microfluidics. In May, Genecor International Inc., of Palo Alto, announced a one-year collaboration with Gyros AB of Uppsala, Sweden, in which the latter will develop microfluidics platforms that Genecor can use to characterize the enzymes it makes. For Genecor, microfluidics means the difference between using microliters and nanoliters--a difference of great magnitude, according to Michael Arbige, Genecor's senior vice president for technology. "This is the way to take it to the next level. It's the next step in the game," he says. The technology should also allow "multitasking," so that researchers can study, in a single unit, a range of characteristics such as temperature, ionic strength, and pH. Microfluidics may have promise for cutting costs and speeding enzyme analysis and genotyping, but its adoption as a point-of-care technology faces hurdles. It will have to be cheaper and faster than existing technologies to earn its place in the diagnostics market. It offers fast and accurate analyses of lab tests in hospitals, for example, but some of those tests are already cost-effective. Using microfluidics for pregnancy tests, or other similar applications, means challenging an already expensive technology, Beebe notes. "The sensor costs less than a penny, and the packaging costs a quarter. That's a big issue, which will take another generation of technology to solve, before you're going to be able to compete with existing diagnostics," he says. Garg talks of the difficulty of "spotting" DNA or hybridizing it as an area that demands more work. "The chemistry involved is very tricky. It has to be standardized," she says. Handling the data produced by microfluidics equipment also can be problematic, Garg observes. "Is the bioinformatics industry ready for data handling?" she questions. Still, if the pace of work of Beebe's lab is any kind of benchmark, the potential for rapid growth in bioinformatics could be huge. "We're discovering potential new applications almost on a weekly basis," he says. "My lab has been filing at least one patent disclosure a month for the past 18 months." Harvey Black (773.2227@compuserve.com) is a freelance writer in Madison, Wis.

Tiny Technology Promises Tremendous Profits

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