Emerging Markets for

Microfluidic Applications in Life Sciences

and In-Vitro Diagnostics

Micromachine Summit
29 April 2010

© 2010
 Content

– Presentation Yole Development

– Market of microfluidic devices
– Examples
– Value chain
STmicroelectronics
In-Check lab-on-chip

– Conclusions

Fluidigm (US) - TOPAZ™

Screening Chips

© 2010 • 2
 Content

– Presentation Yole Development

– Market of microfluidic devices
– Examples
– Value chain
STmicroelectronics
In-Check lab-on-chip

– Conclusions

Fluidigm (US) - TOPAZ™

Screening Chips

© 2010 • 3
 Yole Développement
• Yole Développement is a market research and strategy consulting
company, founded in 1998 with headquarters in Lyon, France.
• Our fields of competence include:
• MEMS
• Microfluidics
• Compound Semiconductor (SiC, GaN, AlN, ZnO)
LED & HB LED, RF devices
• Power electronics
• Photovoltaic
• Advanced Packaging (3D IC, TSV, SoC, WLP)
• Nanomaterials

• Our market research is performed by in-house personnel

conducting open-ended discussion based interviews.
• 20 full time analysts with technical and marketing degrees
• Primary research includes over 2,500 interviews annually

• We have a global customer base and a global view.

© 2010 • 4
 Yole Développement
Our Services

Market & Technology Consulting Services

• Custom research, analysis and evaluation
• We help you quantity & qualify markets, evaluate & understand
technologies, develop strategies, discover opportunities and solve
challenges.
Publication of Market & Technology Reports
• 20-25 reports published each year
• Timely topics selected by our analysts, highly technical, extensive in
scope, presentation format.
Yole Media & Communication
• Free newsletters, news portal, webinars and briefings
• Providing information to tens of thousands of users worldwide.

© 2010 • 5
 Content

– Presentation Yole Development

– Market of microfluidic devices
– Examples
– Value chain
STmicroelectronics
In-Check lab-on-chip

– Conclusions

Fluidigm (US) - TOPAZ™

Screening Chips

© 2010 • 6
 Markets Considered

Life sciences
Pharmaceutical & In vitro diagnostic
Medical devices
Biotech industry (IVD)

Biological tests Medical equipment

Drug discovery and
sales
773 Billion USD 2008
CAGR 08: 4.8%
Source IMS Health, VFA
Microfluidic
development and development and
sales sales
45.5 Billion USD 2008 336 Billion USD 2008
CAGR 06-08: ~14% CAGR: 6%
Microfluidic Source MX: Business Strategies for Medical
contribution: $563 M
Technology Executives

contribution: $160 M Source Yole estimation

Microfluidic
contribution: $120 M
Source Yole estimation
Environment
Agrofood control
R&D spending around
control . water R&D spending between
(17 %) of annual
. process monitoring, 3 and 8 % of sales
turnover control, homeland source Eucomed
source PhRma
traceability,…
security,…

© 2010 • 7
 Geographic Market Distribution

Geographic distribution of the medical and diagnostic market in 2009 – source Eucomed

Canada Europe
2% 33% Japan
11%
China
2%
US India
45% 1%

Bresil
1% Australia
1%

© 2010 • 8
 Market Distribution
• The market of in-vitro diagnostics, medical devices and pharmaceuticals is
dominated by the US and European industry.

• The diagnostic market is very concentrated. The top 10 diagnostic

companies share approximately 80% of the diagnostic market.
top 10 IVD companies by sales in $ billion
rank company country net sales 2007 net sales 2006 change %
1 Roche CH 8,32 7,17 13,8%
2 Siemens Medical * D 4,72 0,48 89,8%
3 Johnson & Johnson US 4,1 3,562 13,1%
4 Abbott US 3,16 2,84 10,1%
5 Beckman Coulter US 2,163 1,93 10,8%
6 BD US 1,905 1,755 7,9%
7 BioMerieux France 1,564 1,365 12,7%
8 BioRad US 0,832 0,6849 17,7%
9 Sysmex corp Japan 0,792 0,697 12,0%
10 Unknown

All data related to exchange rate at the end of exercise date

* Estimation Yole Developpement
© 2010 • 9
 Microfluidic Component Market
Value and forecast Market in $M

MicrofluidicDevices market in M$
3500,00

3000,00
CAGR 16%
MicrofluidicDevicesmarket in M$

2500,00 2005 – 2011 CAGR 16% Drug delivery (inhalers,

micropumps, microneedles)
Industrial and environmental
2000,00
Analytical devices

1500,00 Pharmaceutical and life science

research
Point of Care diagnostics
1000,00
clinical & veterinary diagnostics

500,00

0,00
2006 2007 2008 2009 2010 2011 2012 2013 2014

The microfluidic device market will exceed $3 Billion in 2014

© 2010 • 10
 Compound Annual Growth Rates
2006-2008 and 2009-2014

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%
clinical & Pharmaceutical
Point of Care Industrial and Total microfluidic
veterinary and life science Analytical devices Drug delivery
diagnostics environmental market
diagnostics research
CAGR2006-2008 13% 35% 26% 17% 27% 38% 22%
CAGR2009-2014 19% 39% 33% 14% 27% 22% 26%

The largest growth is expected in the Point of Care diagnostics field.

Pharmaceutical research applications will see significant growth as well.
This is particularly true for the technologies enabling multiplexing.
© 2010 • 11
 Content

– Presentation Yole Development

– Market of microfluidic devices
– Examples
– Value chain
STmicroelectronics
In-Check lab-on-chip

– Conclusions

Fluidigm (US) - TOPAZ™

Screening Chips

© 2010 • 12
 Philips Magnotec
• Philips Handheld Immunoassays
focuses on developing innovative
solutions for point-of-care testing.

• Philips has established the Handheld

Immunoassays business venture to
develop novel handheld diagnostic
testing solutions based on the
Magnotech technology.

© 2010 • 13
 STMicroelectronics
In-Check platform

• Commercialized product through Veredus and

Mobidiag
• An integrated system to perform sample preparation, PCR
amplification and detection, comprising:
– In-Check lab-on-chip consumables = silicon chips that
integrate all the functions needed to identify given
oligonucleotide sequences in a sample, including microfluidic
handling, a miniaturized PCR reactor and a custom
microarray. The chip is mounted on a 1” x 3” plastic slide that
provides the necessary mechanical, thermal, electrical and Temperature
fluidic connections. Control
System
– An independent Temperature Control System (TCS) that
manages up to five different In-Check chip tests and protocols
simultaneously.

– An independent compact optical reader to detect and analyze

the microarray in a few seconds. This easy-to-use automatic
instrument is particularly suited for non trained personnel and
point-of-care applications. Compact
Optical
– The chip costs approximately $160, and can include 10 Reader

© 2010 • 14
targets.
 DALSA Semiconducteur BioMEMS
• A highly miniaturized DNA identification equipment for inexpensive point-of-care
diagnostics.
Integration of sample preparation, DNA amplification, separation and optical detection at the
micro scale using mass production semiconductor MEMS, HV, CMOS and IMAGING
technologies is the key to drive the costs down by several orders of magnitude, and provide
accessible healthcare applications.
. To demonstrate its capabilities, DALSA has developed an integrated Point-of-care
device that fits on a USB stick.

© 2010 • 15
Siemens Medical Solutions Quicklab

Siemens Medical Solutions

(development taken over from
Infineon - May 2005)
Quicklab® silicon lab-on-chip is a molecular diagnostic system
to perform quick tests in clinical routine diagnostics. The entire
analysis system is integrated on a smart card and provides the
basis for comprehensive as well as cost-effective analysis
method.

•When a drop of blood is placed on the card, capillary forces

draw a microliter of it into a channel and various chambers.
Chemicals are then used to break the cell-walls and copy and
label the DNA. Bio-molecules capture the target sequences of
DNA, and enzymes ensure that an electric signal is triggered.
This signal is the indicator that the gene of interest, e.g. of a
pathogen, was in the blood. The aim is that this purely electrical
identification process will be performed so economically that it
will only come to a fraction of the cost of an analysis in a
laboratory.

© 2010 • 16
Semicon Industry Needs Partnership
•Many Players from the Semicon industry try to enter the diagnostic and
Point-of-Care market
•However, access to the market has to be done through diagnostic
companies.
•It is therefore crucial for technology providers to set-up partnership with the
key players in the development phase.

© 2010 • 17
 Content

– Presentation Yole Development

– Market of microfluidic devices
– Examples
– Value chain
STmicroelectronics
In-Check lab-on-chip

– Conclusions

Fluidigm (US) - TOPAZ™

Screening Chips

© 2010 • 18
 Microfluidic Prototyping and
Production

© 2010 • 19
 Materials by Application
Microfluidicdevices market, in M$
Material breakdown
100%

90%

80%

70%

60%
Market share

50%

40%

30%

20%

10%

0%
Clinical and Industrial &
Pharmaceutical Analytical devices Total microfluidic
veterinary Point of care devices environment Drug Delivery
research (MS, GC, HPLC) device market
diagnostics applications
autres 3,9 0,2 2,4 0,0 0,5 1,5 8,7
Si 59,2 8,3 8,9 26,3 9,4 107,5 219,6
Glass 41,2 19,6 44,8 98,4 4,6 0,1 208,7
Polymer 156,0 78,3 97,1 20,3 8,6 3,8 364,0

• The choice of material depends on the application. In general, polymer is preferred for disposable
devices due to its low cost.
• The drug delivery market is dominated by the Inhaler from Boehringer Ingelheim and the insuline
micropumps, which are manufactured in Silicon
© 2010 • 20
 Case Study
Cost analysis Caliper Labchip
• The production costs have been estimated using our reverse Cost Breakdown for 500 000 units/ year
costing model. This model simulates the different process
steps and the associated costs. Depreciation Cost Manufacturing
3% Cost
10%

• The model provides an order of magnitude of the Packaging and QC

dicing
manufacturing costs. The figures presented have not been 6%
17%

validated by Caliper. Therefore, exact data may differ from Yield

Losses
reality, as we do not possess all the necessary information, 4%
Raw Wafer Cost
such as depreciation of the equipment, yield… 36%
Labor Cost
24%
• However, it is a very powerful tool to analyze trends such as
the effect of production volume, material choice and
production location.

Chip unit price as a function of the production volume

$10 000,00

$1 000,00

$100,00

Glass
$10,00 Polymer

$1,00

$0,10
10 100 1000 10000 100000 1000000 10000000

© 2010 • 21
 Cost Breakdown

Patient test

Laboratory costs, manpower, margin…

Diagnostic device

Biology, marketing, distribution, margin

Microfluidic Device

Design, IP, Manufacturing, margin

Maretials

$- $50,00 $100,00 $150,00 $200,00 $250,00 $300,00 $350,00

Market value

• Material costs are a very small fraction of the final cost of an IVD test.
• The added value of design and manufacturing of a microfluidic based device
brings the price of a device to the order of $0.10 to $10
• Diagnostic company add value related to biology (application knowledge,
reagents) and take care of marketing and distribution. The price per test becomes
in the order of $30 to $100
• At the end, the cost paid by the patient can reach up to $300 for molecular biology
tests, principally due to manpower of highly qualified laboratory staff.
© 2010 • 22
 Content

– Presentation Yole Development

– Market of microfluidic devices
– Examples
– Value chain
STmicroelectronics
In-Check lab-on-chip

– Conclusions

Fluidigm (US) - TOPAZ™

Screening Chips

© 2010 • 23
 Conclusions
• Many things happened over the last 3 years: A large number of companies have
been created and/or raised funds, and a large number of microfluidic based
technologies have been developed.

• Some technologies entered the market successfully. In many cases, these

technologies have been acquired by major players.

• Although some technologies have been already acquired by major players, it will still
require some time for microfluidic technologies to become common diagnostic
products.

• Research applications show high growth rates. However, this domain is very
segmented in terms of requirements and technologies. One particular aspect is the
need for technologies allowing multiplexing and simplifying High Throughput
Screening (HTS).

• The Point of care market did not really take-off yet. However, it is expected to grow
considerably in the coming years

© 2010 • 24
 Conclusions
• Point of care diagnostics suppliers need both microfluidics technology and
medical expertise, so close and effective partnerships between very
different companies are required.
• Preferably these partnerships will have to be formed before development
proceeds too far, so development work focuses on users’ practical needs
early on.
• In fact, the complex reality of marketing to medical infrastructure probably
means any diagnostics technology supplier will have to partner with one of
the top ten medical diagnostics players.
• Unfortunately, however, those key medical companies do not want to take
any risks on new technology. Now they prefer acquire technology
supplying companies, figuring it’s well worth paying a higher price for
100% assurance of success.
• It provides an efficient exit strategy for biotechnology startups, but it’s a
problematic model for big semiconductor companies developing these
technologies.
© 2010 • 25
 Conclusions
• They may have a hard time interesting these risk-adverse giant medical
companies in partnerships, and will have then to propose extremely
innovative solutions precisely fitting with the market needs.

• Be aware of the big market risk – the diagnostic field is represented by many
different segments with their own requirements and expectations from an
economic and technological point of view.

• The high technology level is important, but the understanding the biology
remains the main success factor

• The launching of a device in the LS field and especially the medical or

diagnostic field is time consuming.

© 2010 • 26
 For More Information …

Visit our websites

www.i-micronews.com
www.yole.fr
Subscribe to our newsletters online,
Or get one of our market reports !
EMMA 2009 POC 2010
Emerging Markets for Microfluidic Applications in
Life Sciences and In-Vitro Diagnostics Point of Care Testing :
Applications of Microfluidic Technologies

Overview of the technical & economic requirements for POC applications

July 2009
March 2010

45 rue Sainte Geneviève, F-69006 Lyon, France 45 rue Sainte Geneviève, F-69006 Lyon, France
Tel: +33 472 83 01 80 - Fax: +33 472 83 01 83 Tel : +33 472 83 01 80 - Fax : +33 472 83 01 83
Web: http://www.yole.fr Web: http://www.yole.fr

© 2010 • 27