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Research Summary

  • Secular Trends

The Dawn of Molecular Medicine

The Transformation of Medicine and Its Consequences for Investors

May 27, 2011

Molecular medicine is beginning to transform healthcare, with dramatic likely consequences for human health and longevity—and dramatic likely investment implications over many sectors, particularly healthcare and technology.

Key research conclusions include:

  • Accelerating growth in the volume of DNA sequencing data (Display) is likely to be a catalyst for advances in molecular medicine.
  • Thus, collecting, processing and storing molecular information will become a large, new source of demand near-term for information technology.
  • The drug and diagnostic testing industries should be affected most by the advance of molecular medicine.
  • By 2020, molecular diagnostics are likely to generate $20 billion in revenue, just under a third of the total for the in-vitro diagnostic industry.
  • Incorporating molecular information into drug discovery and development will make it far more productive and profitable.
  • The blockbuster drug model will be redefined.
  • Tremendous opportunities exist for those companies that are helping to make molecular medicine possible and for those that can adapt as old business models are challenged; incumbents unable to adapt will be disrupted.
Sequencing Data Generation Should Rise Rapidly, in Our View
Sequencing Data Chart
As of February 8, 2011; estimates are subject to change.
Projections begin on January 1, 2009, and are in terms of bases from finished sequences, rather than the total number of bases generated (which is considerably higher, as multiple runs are needed to arrive at a complete sequence); DVD comparison assumes conversion rate of one base per byte.
Source: Cisco Systems, GenBank and AllianceBernstein

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