This article focuses on the increasing market clout and profitability of the biotech industry, both in the U.S. and abroad. It also underscores the growing number of medical innovations flowing from biotech pipelines, and the impact that the biotech industry is having on so-called “Big Pharma” companies. Ironically, as biotech companies flex their market muscle, the dividing lines between biotech and pharma companies are blurring through mergers, licensing deals, and shared technology.
As the biotechnology industry grows in confidence and maturity, it is positioning itself to feed growing demand for new drugs and develop treatments in areas of unmet need. The promise of personalized medicine remains tantalising close.
Following the tough years for technology stocks that followed 2000, confidence and new money has returned to the biotech sector. The market valuations of the biggest biotechnology companies such as Amgen and Genentech now rival some of their biggest pharmaceutical industry peers.
Research from Ernst & Young, cited in this article, notes that the U.S. remains the international leader in biotech, at least for the time being, with three-quarters of global biotech revenues. The U.S. also raises twice as much venture capital as the E.U. and approved twice as many new biotech medicines in 2004. Our global competitors in India, China and the E.U., however, are doing their best to close the gap.
More worrisome than competitors abroad, however, are trends at home. The U.S. biotech industry could lose its edge if Congress bows to increasing pressure to inflict European-style price controls on new medicines or legalize drug importation—either of which would slash industry profits and stem the flow of biotech investment capital. This would be bad news for the industry, and for the patients who depend on their life-saving products.