The Nuts and Bolts of Drug Research

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While Merck (NYSE: MRK) just released a pair of papers in the journal Nature detailing the network of proteins that are linked to obesity, it won't benefit much financially from the study. Sure, Merck and rivals Pfizer (NYSE: PFE), Eli Lilly (NYSE: LLY), and Amylin Pharmaceuticals (Nasdaq: AMLN) can use the information to design better drugs to fight obesity and diabetes, but the immediate beneficiaries will be those who make the tools that make the research possible.

The research conducted by Merck and deCODE genetics (Nasdaq: DCGN) identified more than 1,000 genes that are intertwined in a network that determines whether an individual becomes obese or not. As you can imagine, working out a system like this isn't a trivial matter and requires analyzing the entire genome to determine which of the 25,000 human genes are in the system.

The key to the research is biochips, which help scientists analyze the entire genome of an individual in a single experiment. In studying the obesity network, researchers analyzed DNA variations and gene expression levels from more than 1,000 people in Iceland, a set of experiments that would have been impossible without the tools made by Affymetrix (Nasdaq: AFFX) and Illumina (Nasdaq: ILMN).

With systems biology picking up and such a large number of diseases to be studied, you can expect that sales of the research tools used to perform these experiments will increase. While drugmakers should ultimately benefit from these experiments because the results will help them design better drugs, Affymetrix and Illumina will benefit whether the clinical trials are successful or not.

More Foolishness on companies that benefit from drugmakers' research:

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