The bioanalysis market - France

1.2 A highly promising global market

According to a **** study by bioanalysis group Eurofins, the global bioanalysis market is afast-growing and highly promising market , particularly in the food sector. At the time, Eurofins estimated that the global market could reach €*.* billion in value sales by ****.

More recent figures put the global bioanalysis market at US$*.* billion in ****; it is expected to grow at a CAGR of +*.*% over the ****-**** period, reaching US$*.* billion in ****.

Bioanalysis market size and forecasts World, ****-****, US$ billion Source: ****

There are two main reasons for the sector's dynamism: on the one hand, the tightening of regulations (***), and on the other, the growing demands of consumers anxious to consume healthy, safe food. This is driving manufacturers and producers to step up controls, and making analytical laboratories indispensable for verifying product conformity.

It's important to note that these figures only reflect a sub-segment of the market dedicated to DNA and genome testing - an essential part of bioanalysis, but not the whole picture.

If we follow the French breakdown of the sector, this sub-segment would in fact represent only **% of bioanalysis activity, with the global market estimated by MarketWatch at around : *.** / *.** = **.* billion dollars in ****.

1.3 Sustained growth in the French market

The French market experienced sustained growth between **** and **** (***), as shown in the following graph. This increase accelerated further from ****, when the Covid-** crisis boosted the activities of bioanalytical laboratories, mainly in the food and pharmaceutical segments.

Eurofins Scientific sales France, ****-****, millions of euros Source: ****

We note that Eurofins Scientific's growth in the French market is faster than the average player due to two things:

Its organic growth The external growth policy it has been implementing for several years

The second is that, over time, Eurofins Scientific has captured a larger and larger share of overall growth in the French market. We estimate that Eurofins Scientific will account for around **% of the French bioanalytical market by ****. The French bioanalysis market would therefore be around : *,*** / *.** = *,*** million euros.

1.4 Overview: PESTEL analysis

In order to gain a clear understanding of the bioanalysis market environment in France, its structural drivers and inhibitors, we propose to carry out a PESTEL analysis to determine the impact of various factors on the market.

1.5 The health crisis as a partial redefinition of the market

The bioanalytical sector is holding up rather well in the face of the health crisis, mainly thanks to the robustness of the food and pharmaceutical industries, both of which are considered essential. However, there is some uncertainty about growth in the sector in **** and ****: while it averaged +*% between **** and **** (***), it is likely to be lower in **** and ****.

There are also a number of risks to the profession, including the following:

The reputational risk inherent in the health crisis Deflationary pressure on prices throughout the ecosystem: as transfer costs are low for customers and offers are too undifferentiated, this mechanically strengthens the position of the leaders, who have been able to lower the cost of their analyses thanks to economies of scale, which is more difficult for smaller laboratories to achieve The rise of departmental public laboratories: some have joined forces within public interest groups because they see an economic interest in doing so (***). Thanks to this trend, Labéo, for example, has grown in size and is beginning to compete with some of the top ** private players.

In response to this new balance of power, the major private groups have often opted for offensive solutions. These include

Innovation: Eurofins, Carso-LSEHL and ...

2.1 Strong demand in all three market segments

Demand is well oriented towards the three main segments of the bioanalysis market: environmental, food and pharmaceutical analysis.

Environmental analysis

Among the main customers for bioanalytical laboratories in the environmental sector are companies (***).

One of the main factors underpinning demand in this bioanalysis segment is the evolution of regulations concerning, for example, pollutants to be limited, discharges of pollutants into the air and water, and so on. Here are some examples of recent changes in the regulatory framework:

Mandatory indoor air quality (***) monitoring in nurseries and nursery and elementary school since July* , ****.[***] Repérage Amiante avant travaux (***) has been mandatory since July **, **** in all buildings built before ****, as asbestos is considered an extremely toxic substance. [***]

Food analysis

The main clients of bioanalysis laboratories in the food sector are the food industries. The laboratories analyze the composition of foodstuffs on their behalf, in order to detect the potential presence of pathogenic components. While most manufacturers have in-house analytical skills, they call on laboratories for the most technical analyses.

France's leading industrial sector, food industry sales totaled ***.* billion euros in value in ****, a stable figure that year (***). French household consumption of food products and non-alcoholic beverages nevertheless fell slightly by -*.*% in volume ...

2.2 Traceability and transparency are becoming essential in the agri-food sector

According to a Challenges survey, **.*% of French people believe that the safety of products bought in supermarkets is declining. This is largely due to the numerous scandals that have broken out in the food industry, prompting consumers to be more vigilant about the quality and traceability of the products they consume.

Poll: "In recent years, would you say that the safety of products bought in supermarkets has tended to...?" France, ****, % Source: ****

While it's fair to say that the French are rather more wary of food safety, they're therefore leaning towards products they'd rather cook than ready-made meals.

Product choice in supermarkets France, ****, % Source: ****

The proliferation of food scandals in France in recent years is part of this growing consumer distrust, and highlights the important role and progress to be made in bioanalysis, in setting standards and monitoring their application. Here's a selection of the main food scandals to have hit France since ****, and where they came from.

These food scandals have a real impact on people's consumption habits: according to a survey carried out in July **** by BVA, **% of those polled say they are forever changing their eating habits as a result of the various food scandals and crises taking place ...

2.3 The credibility of the pharmaceutical market is under threat

The rise of counterfeiting in the pharmaceutical industry

Globalization, market deregulation and the free circulation of certain goods are leading to the wider distribution of counterfeit products.

According to a survey carried out for Leem (***), there has been a growing mistrust among the French, which has affected all types of medicines in recent years, with the exception of homeopathy and generics. Whereas in ****, **% of French people had confidence in prescription drugs, only **% have confidence in these same drugs in ****.

Confidence intensity by drug type France, ****-****, % Source: ****

In view of the various developments observed, the ANSM should increase its staff to prevent these risks and gather patient testimonials. It has also set up sample libraries containing reference samples for quality standards and health risks. These enable suspect samples to be compared with genuine samples, for rapid detection of counterfeiting or falsification. [***]

The rise of health scandals

Over the past ** years (***), there have been a number of health scandals with serious consequences in France. These scandals are national or even worldwide in scope, and each time affect a significant number of people.

For example

The Mediator scandal: * million patients and over *,*** deaths. [***] The PIP implants scandal: tens of thousands of implants were ...

3.1 The different types of player

Segmentation *: three categories of company

There are three main types of player in the French bioanalysis market:[***] [Industrie Pharma

Generalistpure players , the three main ones being Eurofins, Carso and Mérieux NutriSciences. Eurofins has a significant market share in the healthcare segment. Diversified "follower" operators, generally specialized in one of the three market segments (***) rather than all three. There are around ten of these, including SGS, Bureau Veritas, Intertek, etc. Local or even regional (***) SMEs , also positioned in just one of the three segments.

The price cuts generated by the productivity gains achieved by the pure players have had a direct impact on follower operators and local SMEs, particularly the smaller players. Indeed, forced to align their prices to remain competitive, but with lower investment capacities, some players are losing up to two points on their margin rate.

it's worth noting that the issues and services involved vary from one business sector to another, because needs and standards are not the same.

Segmentation *: distinction between public and private spheres

Another segmentation is the distinction between private and public laboratories.

Public laboratories:

The public sphere includes departmental and national laboratories. Departmental laboratories have struggled to maintain their position in recent years. In ...

3.2 Different growth strategies

Concentration

Bioanalytical laboratories are seeking to increase their volumes in order to reach a significant size and consequently reduce the cost of analyses, gains that are notably passed on to customers in the form of lower prices. For example, Eurofins doubled in size over the period ****-****, thanks to an acquisition volume of between ** and *** million euros per year; in **** alone, the company acquired more than ten companies. These may be foreign, enabling Eurofins to open up internationally, or hyper-specialized in one sector to enhance the Group's expertise. For example, Eurofins has acquired the American company Calscience Environmental Laboratories, which specializes in environmental analysis. [***]

More recently, Eurofins announced that its subsidiary Eurofins Clinical Testing US Holdings, Inc. had entered into an agreement to acquire DNA Diagnostics Center (***), a leader in consumer genetic testing. DDC expects to achieve sales of over US$** million in ****.

DDC is one of the most accredited genetic testing laboratories in the world, and was founded on the principle that technological advances in DNA testing should translate into accessible and affordable services for all. The company offers comprehensive DNA testing services for consumers and the justice system, in the fields of paternity and family relationships, fertility, lifestyle, veterinary ...

3.3 A market shaped by a strategy of external growth

The bioanalysis market is driven by the need to reduce costs through economies of scale, so it seems logical that the biggest players in the market are looking to make acquisitions one of the major levers of their growth.

4.1 The main market segments and their offerings

There are three main areas of expertise for players in the bioanalysis sector in France: environment, agri-food and health.

Environmental bioanalysis

Bioanalysis in the environmental sector focuses on various components of the environment, including air quality, water quality, solids analysis and building quality.

Environmental analysis holds **% to **% of the market share in the sector in France, growing at an average annual rate of +*.*% between **** and ****.

Bioanalysis in the food industry

Food analyses are used to carry out various controls on foodstuffs. They focus on human and animal nutrition, and may concern product composition, contaminants, supply control or GMOs (***).[***]

Food analysis holds **% to **% of the market share in the sector in France; it recorded an average annual increase of +*.*% between **** and ****.

Bioanalysis in the healthcare sector

Bioanalysis in the healthcare sector (***) involves carrying out a variety of tests on drugs: bioanalytical services, toxicological studies for clinical research programs, and so on. It is an integral part of the clinical and pre-clinical phases of drug development, enabling efficient validation of assays, biological analysis of samples, sample tracking and reporting of results. For the most part, it's a broad R&D procedure that takes a compound through to the submission of a marketing authorization ...

4.2 Prices for analysis services

An overall drop in prices

Overall, prices have fallen over the last ** years, thanks to productivity gains achieved through R&D investment.

For example, some laboratories can now carry out a toxin search in two days, at a cost of between €*** and €***, compared with €*,*** and a much longer period ** years ago.

Significant price pressures

This overall drop in analysis prices is explained by the fact that, for several years now, bioanalysis laboratories have been facing significant pricing pressures. In particular, the INSEE index of production prices for technical testing and analysis services indicates a stagnation in prices over the period ****-**** : this stems from the fact that, due to an ever-tightening regulatory framework, manufacturers have increased the volumes of samples they entrust to bioanalytical laboratories, enabling them to put pressure on prices. With the intensification of competition between laboratories and the relative homogeneity of the players' offer, making them easily substitutable, price has become one of the main criteria used by customers to select service providers.

Producer price index for technical testing and analysis services France, ****-****, base *** in **** Source: ****

4.3 Major market trends

The market's slight loss of momentum compared to **** can be explained in several ways. Growth was partly driven by the outsourcing of certain services, but this trend is slowing down, having a direct impact on growth in the bioanalysis market.

In addition, investment in R&D has enabled bioanalytical companies to achieve productivity gains, and therefore to lower their prices. These price cuts have a direct impact on the sales of other manufacturers and on the market as a whole. However, public-sector laboratories are slowly getting back on their feet, after facing stiff competition from the private sector. Private laboratories will be faced with a slight upturn in activity from departmental analysis laboratories, even if their weight in the bioanalysis market will remain marginal. Lastly, the concentration of market players will drive growth in the sector and create more competitive players.

The development of the organic sector in the agri-food industry and the growth in demand in this sector, the resurgence of allergies and the fear of scandals, the rise of vegan trends and the desire to see "vegetarian" certifications emerge, as well as gluten-free, lactose-free, etc., are all promising trends. are all promising trends, particularly for bioanalysis in the health ...

5.1 Current regulations

The bioanalysis market has benefited greatly from the tightening of regulations in each of the three main bioanalysis segments: sanitary controls, food controls, air and water pollutant discharges, and so on.

Pharmaceuticals and cosmetics:

Health safety in France is fundamentally based on the concept of the benefit/risk ratio: a health product should only be distributed if the benefits it brings to the patient outweigh the risks it entails. Most countries have developed similar regulations. Pharmaceutical rules are now largely international, even if their application remains highly uneven.

Pharmaceutical industry standards in France are partly governed by the WHO (***). The preamble to the **** Constitution enshrines a fundamental right to health protection: "The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being ". These standards have become particularly stringent in the wake of the numerous drug scandals of recent years: Mediator, third-generation pills, Distilbene and, more recently, Depakine.

Pharmaceutical standards are also governed on a European scale, with standards common to all EU countries, due to the rules governing the free movement of goods and services.

A comprehensive process for assessing the product's risk/benefit ratio has thus been drawn up, with the introduction ...

6.1 Segmentation

Among the main players in the bioanalysis market, there are * main generalist leaders (***), which between them account for almost **% of total market sales, and follow-on operators, the main ones being SGS, Intertek and Bureau Veritas.

m€ : billion euros m€ : million euros

• Eurofins
• Carso groupe
• Mérieux NutriSciences
• SGS
• Intertek
• Bureau Veritas BV
• Phytocontrol
• Qualtech (IFBM Groupe)
• Valbiotis
• Abbott Groupe
• Agilent Technologies
• Beckman Coulter
• Bio-Rad Laboratories
• Genomic Vision
• LFB Groupe
• Novacyt
• Qiagen
• Randox Laboratories
• Roche Diagnostics France (Roche Group)
• Thermo Fisher Diagnostics