Europe’s buoyant biotech set for further growth
pharmafile | April 16, 2007 | News story | Research and Development, Sales and Marketing |Â Â biotechÂ
A new comprehensive survey of the world's biotechnology industry shows the sector to be in great health, with indications of continuing expansion.
The Ernst & Young Beyond Borders report 2007 features in-depth analysis of the sector and surveyed companies in the US, Europe and Asia.
The poll found executives in all three continents bullish about the future, with Europe's biotech leaders in particular predicting growth in 2007 and beyond.
Chief among the factors behind the sector's growth was the surge in deals with major pharma companies. The Ernst & Young report calls 2006 the 'Year of The Deal'.
Alliances involving US companies totalled $23 billion over the year – an all-time record – while high premiums paid by pharma to buy out companies drove the value of mergers and acquisitions to the second-highest level in the industry's history.
"In many ways, 2006 was the year of the deal – but this is all the more remarkable because there was no one deal of the year," said Glen Giovannetti, Ernst & Young's Global Biotechnology Leader. "In prior years, high deal-value totals were typically driven by a single mega deal, but in 2006, we now have widespread recognition among buyers of the potential value in biotech's platforms and pipelines. That's remarkable, and a testament to the tremendous innovation of the global drug development industry."
Europe: The report concludes that the European biotech sector sustained the recovery it began in 2005, with revenue growth of 13% – more then twice the 2005 growth rate and contributing to revenues of over €13 billion ($16 billion).
The year marked a definite turnaround compared to its low-point in 2003, when revenue in European biotech declined 12%.
Financing rose an impressive 45% to 4.7 billion, with venture capitalist financings reaching an all-time high of €1.5 billion ($1.9 billion). The pipelines of publicly traded companies grew 30%, bringing the overall pipeline to almost 700 compounds, plus 27 in registration and awaiting regulatory approval.
In addition, Europe's privately held biotechs have nearly 800 compounds in their pipelines, and 12 compounds in registration.
"Last year, there was cautious optimism in the European biotech industry – as the sector emerged from a prolonged period of restructuring," said Siegfried Bialojan, Germany Biotechnology Leader, Ernst & Young. "This year, double-digit revenue growth – and sustained success across multiple measures – prove Europe's biotech sector has bounced back."
In 2006, revenue growth was fuelled by such industry heavyweights as Actelion and Serono ( both based in Switzerland), Meda and QMed (Sweden), Novozymes (Denmark), Eurofins (France), Qiagen (Netherlands), Elan (Ireland) and UK-based Shire Pharmaceuticals.
These companies accounted for around 80% of public company revenues, up nearly 20% in total.
Meda achieved the highest revenue growth (83%) primarily due to the launch of Novopulmon for the treatment of asthma in several European markets.
Actelion increased revenues by 43% thanks to strong product sales, especially for Tracleer (up 42%) for the treatment of pulmonary arterial hypertension.
M&A to continue: Significantly, last year saw a 30% rise in the number of products in European biotech pipelines, reaching a total of nearly 700 compounds in publicly owned companies.
One major factor behind this growth was a number of significant IPOs (initial public offerings) to investors, with the trend expected to continue on the continent over the next few years.
Finally, a survey of over 400 global biotech chief executives found them in a confident mood. Ninety four percent said they were likely or very likely to increase their number of employees over the next two years. Meanwhile 52% expected to forge new alliances around their products in the near future, with biotechs on both sides of the Atlantic predicting a merger or acquisition.
Related Content
Cellbyte raises $2.75m to fund pharma drug launch platform
Cellbyte has announced that it has raised $2.75m in seed funding for the streamlining of …
Lilly opens fourth US Gateway Labs site
Eli Lilly has opened its newest Lilly Gateway Labs (LGL) site in San Diego, California, …
LGC Group opens $100M Organic Chemistry Synthesis Centre of Excellence
LGC Group, a life sciences company, has opened its new Organic Chemistry Synthesis Centre of …
