Crunching Digits for Drugs

By Unmesh Kher With Reporting by Michelle McCalope/Houston and Jennifer Prittie/Toronto

Investor dollars are not the only things flowing out of digital technology and into biotech; plenty of high-end hardware and software are following the money. The pursuit of new drugs through genomics and proteomics requires the gathering and sifting of oceanic volumes of data about molecules and their reactions to one another. Vertex Pharmaceuticals, for example, simulates 47 billion reactions between drugs and proteins a day--nearly as many as the number of e-mails sent out in the world every week. This requires the massive deployment of supercomputers and highly sophisticated programming tools--all key elements of a booming field dubbed bioinformatics.

Some biotechs, including LION Bioscience of Heidelberg, Germany; Gene Logic of Gaithersburg, Md.; and Compugen of Princeton, N.J., have been selling their expertise in bioinformatics to big drug companies. But they face heavyweight competition from the likes of Hitachi and IBM, hungry for a slice of a bioinformatics market that Frost & Sullivan predicts will grow fivefold, to $7 billion over the next five years.

Compaq, which got in early by assisting the human-genome mapping projects, has the largest market share at 37%. It is working with Celera Genomics and the U.S. government to build a supercomputer that will perform 100 trillion operations a second--enough to read the entire Library of Congress, some 18 million books, 30 times a second. Says Ty Rabe, a director at Compaq's bioinformatics program: "The life-science industry will be as important to the world economy in the next decades as the computer industry is today."

IBM, which said last year that it would invest $100 million in the field, has now more than doubled its life-sciences investments. Says the initiative's general manager, Carol Kovac: "Partnering with companies in proteomics and genomics is essential for our success." Big Blue has invested $10 million in MDS Proteomics, a subsidiary of MDS, based in Toronto, Canada, and recently announced a collaboration with LION. It is also building what will be the world's fastest supercomputer, Blue Gene, to work out the complex rules by which proteins assume their shapes.

Other computer and telecom giants are also playing. Marconi, based in London, has pitched in to help Oxford GlycoSciences map all human proteins, while Hitachi and Oracle are doing the same with Utah's Myriad Genetics.

But bioinformatics isn't just about genes and proteins anymore. "It's now used to describe how to manage and integrate all information from the drug-discovery process through clinical trials," says Pradip Banerjee, an analyst at consultancy Accenture. That's why drug giant Merck bought Kirkland, Wash.-based Rosetta Inpharmatics, a leader in the field, for $620 million last May. The much touted convergence of biotechnology and computing, it seems, has revolutionized a host of other fields.

--U.K., with reporting by Michelle McCalope/Houston and Jennifer Prittie/Toronto