For decades diagnostic labs have relied upon clinical
chemistry and immunoassays to detect disease, but with
the mapping of the human genome and advances in instrumentation
technology, physicians of the future will have access to
molecular diagnostic tools that will revolutionize the
way medicine is practiced. Applied Biosystems, a division
of Applera, is dominant in the life sciences industry market
with respect to instruments and reagents, including nucleic
acid detection and synthesis. Another division of Applera,
Celera Genomics, has been securing intellectual property
on gene expression patterns and single nucleotide polymorphisms
(SNPs) faster than anyone in the industry today. With this
combination of assets, Applera may be poised to capture
the majority of the molecular diagnostics industry, the
fastest growing segment of the $22B in vitro diagnostics
industry.
This paper will
first review the current structure of the diagnostics
industry; and in particular the nascent
but fast-growing molecular diagnostics segment. Next, we
will introduce Applera Corporation and its key subsidiaries,
Applied Biosystems, Celera Genomics and Celera Diagnostics,
a joint venture between Applied Biosystems and Celera Genomics.
We will analyze Applera’s intellectual property and
complementary assets, key pieces to Applera’s strategy
within the molecular diagnostics industry. Using this understanding
of the company’s strategy we will assess the current
commercialization environment and explain why Applera may
not retain a majority of the value from its innovations.
However, we will then consider a standard setting approach,
which is an alternative that Applera can consider in efforts
to increase the value it may obtain from its position in
the molecular diagnostics industry. We will compare the
strategy in this industry to the competitive structure
of the computer industry, one that is dominated by standard
setters such as IBM and Microsoft. Finally, strategic recommendations
for achieving maximum growth and sustainability in this
segment will be discussed.
