EY recently came out with their report on the global biotech industry anno 2014 – and the results? are staggering.
Globally the industry has reached incredible results on practically all the commonly used financial metrics and measuring models, such as: Revenue, capital raised and profitability.
Some of the factors that has influences this tremendous success is a number of high-profile products, which has been successfully launched as well as a good year for drug approvals, means the industry, for the first time, reached a market capitalization above US$1t.
A sign that the year has really been booming is the increased investment in research and development (R&D), which rose with 20% compared to the former year. The major part of the R&D is accomplished by smaller companies.
Glen Giovannetti, EY’s Global Life Sciences Leader, says: “The global biotechnology industry’s outstanding performance and maturation are driving optimism that a new age of biotech innovation will create long-term value for companies (…). Investors are bullish on the future, investing historic amounts in the smaller players that will drive future breakthroughs.”
As such venture capital raised in both EU and USA amounted to US$7,6b, which is a 28% increase from prior year.
And while all appears glorious - there are some down sites:
For instance the many drug approvals will most likely increase the price pressure. A lucrative industry tends to bring in a heightened competition as players fight to get the greatest share. Further many companies made their growth through merger and acquisitions, but seeing as the number of smaller companies decrease and the number of strong buyer are increasing as the financial result are very dependent on the mergers – the price will likely skyrocket due to the short supply.
Read the full article at danskbiotech.dk.
Find the report on which the article is based here.