The global biotechnology industry put in another year of strong growth, with revenues rising 17% to $54.6 billion dollars in 2004 and the sector’s leading companies now ranking among the top therapeutic companies in the world, according to Ernst & Young’s annual report on the sector.
Entitled “Beyond Borders”, this year’s report highlights the globalisation of the biotech industry, with companies no longer constrained by the limitations of their home markets and able to look for resources around the world. Driven by competition, pricing pressures and funding challenges, particularly in Europe and the US, the biotech sector is locating activities around the world. This is particularly evident in China and India, which are emerging as hubs for research and, with improved regulatory an intellectual property frameworks, new markets for biotech products.
The sector raised $16.9 billion in capital in the USA and 2.8 billion euros in Europe, surpassing 2003 levels, and received approval for 20 new biotech medicines in the USA and nine in the EU, compared to 18 and six, respectively, during 2003.
Ernst & Young notes that the USA still dominates the biotechnology sector, with $42.7 billion in revenues, or 78% of the world market, followed by Europe with $7.7 billion (14%), and Canada and Asia-Pacific with around $2.1 billion revenues – or 4% of the world market – apiece. These proportions are largely unchanged from 2003 [[14/05/04g]].
This dominance is also reflected in what Ernst & Young describes as the "coming of age" of the US biotech sector, with 230 products on the market, 55 awaiting approval and 365 in Phase III testing, up from 290 in 2003.
But Europe is catching up, despite a tough operating environment over the last four years caused by flagging investor sentiment, product disappointments and market factors, according to the report. Revenues fell 5%, but net losses improved by 19%, and the European sector is likely to see increased momentum, providing it can adopt a "laserlike focus" on product development, according to the report.
Meanwhile, the Asia-Pacific region, with aggressive growth, increasing governmental support, and improving regulatory regimes and infrastructure, is not far behind. Revenues rose 36% in 2004 over 2003, while net losses were slashed by 45%.