The Impact of COVID-19 on the Life Science Market
In July 2020, SAMPS kicked off a webinar series by speaking with three groups who have been conducting research since March 26th, 2020 to understand the impact COVID-19 was having on the life science industry.
We invited Joan Boyce, of Biocompare, which is a buyer’s guide for life scientists, to join our panel discussion on the state of the market. Biocompare conducted an exit survey, taken over three intervals, of 6,600 researchers predominantly from universities, biotech companies, and medical schools who had visited the Biocompare website. Respondents took on a global perspective, which was comprised of 35% North America, 30% Europe, 24% Asia, 4% South America, and 7% rest of the world (Figures 1A and B).
We were also joined by Bill Kelly of BioInformatics Inc., which is part of the Science and Medicine Group providing marketing intelligence to suppliers catering to the life sciences, analytical instrumentation, clinical diagnostics and medical imaging markets. Our third panelist was Hamid Ghanadan of the LINUS Group, an insights, strategy and innovation consultancy. During the discussion, we gained insight into whether laboratories were still open, if they were still ordering, if funding would be cut, and what the new normal might look like.
Which laboratories were still open?
In March, when the emergency was first declared, our panelists found that 87% of all science labs were closed but by the end of July, this had dropped to 18%. Most of those that remained closed were located in North and South America. Laboratories still open at the start of the pandemic were predominantly in the pharma and biotech sectors, although they were operating at a reduced capacity by limiting the number of personnel in the lab at any given time. Those engaged in COVID-19 research were considered essential workers, therefore more of their labs were open.
We saw that larger organizations were more formalized with their remote operations plans and best prepared to access data or communicate with each other remotely. The only thing that was not happening was work at the bench. As the pandemic progressed, organizations began to develop clear guidance on how to reopen their laboratories. Expectations were set in terms of limiting personnel on site, establishing shifts, implementing handwashing stations, mandating personal protective equipment (PPE) and conducting regular COVID-19 testing.
Biocompare found open labs were running at a reduced capacity (Figure 2). Participants surveyed during the first period, March 24th to April 30th, were operating at 40% capacity. During the second data period, in May, they were at 47% operating capacity and finally in the third period, June 1st through July 8th , they saw an increase to 69% operating capacity.
How was research affected?
The LINUS Group developed a model based on their research about different pandemic phases (Figure 3). They found initially everyone was in shock. People were worried about their own personal safety, their loved ones, and their lab. Productivity essentially came to a halt, and many labs temporarily shut down.
Once the initial panic dissipated, we entered the Golden Interim phase. Despite restricted access to the bench for wet labs, scientists had a chance to step back, catch-up on reading papers, submit manuscripts, analyze data, and collaborate in an unprecedented way. They were able to make strategic decisions about how their research could change, answer alternative questions, and introduce new techniques once they got back into the lab.
The Biocompare survey data supported this through insights from their website traffic (Figure 4). They receive 3.3 million scientist visits annually, with the majority of them viewing the product directory prior to making a purchase. However, at the start of the pandemic, this plummeted since people were unable to get into the lab. This rebounded in June and is now equal to that of 2019, with the majority of traffic coming from Europe and Asia.
Despite a downward trend in directory traffic, Biocompare’s editorial traffic skyrocketed by 268% (Figure 5). This makes sense as scientists were spending more time planning and reading. Digging into details, they saw huge spikes in product categories, such as thermal cyclers, biological safety cabinets, laminar flow hoods or PCR hoods. Delving further into research areas and workflows, they saw huge increases in both automated DNA, RNA purification sample workstations and viral RNA purification kits.
Surprisingly science hasn't stopped
With laboratories closed, scientists were unable to conduct planned experiments. One researcher said for every month out of the lab, it would take two to three months to ramp back up. However, as the pandemic progressed, things were not as dire as anticipated, and laboratories began to figure out ways to resume their research. Conversely, biopharma companies focused on vaccine development were reducing the number of employees on site but working in shifts around the clock.
During the first period, 74% of laboratories who weren't doing COVID-19 research still ordered products. Those in contract research and diagnostic labs were purchasing the most. By the third period, 91% of respondents were ordering products and sales of consumables and instruments improved (Figure 6).
Research shared by Hamid Ghanadan, conducted through the LINUS Group, disclosed that people studying immune response were researching immunotherapy and the secondary effects of cytokine storms as a result of cell therapy. They observed people looking at cell therapy changing course and transitioning into COVID-19 research as cytokine storms seemed to be a major issue with people who contracted the virus. Scientists were trying to comprehend how they could contribute to our understanding of COVID-19.
Do we anticipate funding and grant cuts?
Through the BioInformatics survey, we saw a great deal of uncertainty with 58% of respondents reporting budget reductions and hiring freezes which restricted their ability to explore new research directions (Figure 7).
They found at the start of the pandemic, there was anticipation of doom and gloom with respondents anticipating major funding cuts. But as time progressed, they became optimistic and began to anticipate increases. This was because researchers looking at complex and rare disease models, like cancer, were not seeing an impact, whereas those working on infectious diseases anticipated an increase due to the emergence of COVID-19 specific grants. Then in July, the US House of Representatives Appropriations Committee approved a $5.5 billion in NIH funding for fiscal 2021.
Despite the turbulence around us, labs are just looking towards next steps because the future is unknown. Academics want guidelines so they can get students back into class. There are thoughts that labs might choose to personalize communal products, such as pipettes, which would mean researchers must lock equipment in a drawer to prevent others touching them. This will drive sales of consumables and everyday lab products, but strategic purchasing decisions on larger equipment were probably made during the Golden Interim phase. Once labs open again, we will probably see a surge in economic activity to recoup lost time.
How can a company prepare for a product launch?
From a commercial perspective, there will be winners and losers as we evolve our methods of communication with our audience. Spontaneous customer visits or in-person meetings with a large number of stakeholders are likely no longer feasible, at least in the short-term. Similarly, since tradeshows will presumably adopt either fully virtual or hybrid formats, opportunities to engage customers at live events could become sparse. When the LINUS Group asked their respondents when they expected to attend a live conference, most thought it would be sometime in early 2021. Now that timeframe is fading in the rearview mirror. Knowing that a virtual conference and exhibit hall experience is vastly different than walking the aisles and attending talks in person, how do we innovate in parallel to cultivate relationships with our customers?
Overwhelmingly, our audience said they were looking to implement digitaliization, provide remote access, and automate their lab. Additionally, they see an increase in collaborations and sharing of data across borders which will result in an industrialization of science and the emergence of labs running samples 24/7. The new normal could see a higher level of productivity. Obviously, coronavirus isn't going away as rapidly as we had hoped, but there's a big opportunity for us to innovate as we enter the next normal. Keep in mind we will not be going back to normal. That state no longer exists.