Biotech: Industry Snapshot

Consistently strong growth of around 15% is a result of the rapid innovation and massive investment of capital into the US biotechnology and drugs market. The relentless technological advancement within the sector shows no signs of slowing with the biotechnology market set to reach a value of $80 billion by 2008.

Product sales are the most abundant revenue source in the market, although funding initiatives in terms of venture capital are increasingly important to the smaller players in the market. Whilst the markets innovative approaches to discovery offer great potential, the investment community and many strategic investors have been very cautious with recent investments, focusing on late stage development opportunities and products close to approval. However, the introduction of a zero capital gains tax rate on entrepreneurial equities could spur biotech investment into 2005.

Developments within the genomics sector are set to inspire growth as companies begin to incorporate complex genomics into their products, saving huge amounts on drug registration fees and changing the business focus of the sector from simply mapping proteins to catalyze drug discovery. The threat of bioterrorism has provided a substantial government investment into the industry although the misuse of bio-products and the controversy surrounding cloning will continue to provide the industry with negative publicity.

The US is expected to maintain its position as the worlds dominant market for biotechnologies in the near future with Amgen, Biogen Idec, Chiron, Genentech, Biogen Idec and MedImmune amongst the major players. The huge potential of biogenerics, whilst currently limited by existing legislation, is attracting the interest of companies currently faced with limited scope for profitable expansion in the commodity generics markets. The potential introduction of regulatory pathways for the approval of generic versions of biologics by the FDA could promote massive expansion into this sector, driving revenue growth for the industry moving forward.

Source: Reuters