The latest report on the global biotechnology industry from Ernst & Young notes that while the sector rebounded strongly last year, particularly across the Atlantic, that growth was driven by a small group of big players. and others need to become much more efficient.
EY’s Beyond borders: unlocking value analysis of 2013 notes that companies in the industry’s established biotech centres (the USA, Europe, Canada and Australia) generated revenues of $98.8 billion, up 10% on 2012, but “virtually all of this growth came from 17 US-based ‘commercial leaders’, defined as companies with revenues in excess of $500 million.”
Other findings from the report showed that R&D spending rebounded forcefully, up 14% from the prior year, driven primarily by a 20% increase in the USA, while market capitalisation leapt 65% to $791.8 billion. Biotechs in North America and Europe raised $31.6 billion in 2013, up from $28.7 billion raised in 2012 and the second highest total since 2003, while venture capital raised by companies in the latter regions totalled $5.8 billion in 2013, up slightly from $5.5 billion in the prior year.
Despite the strong overall results, EY noted that most biotechs “operate in a resource-constrained environment, increasing the need to conduct R&D in capital-efficient ways”. The report calls for more adaptive trial designs to enable biotechs to “refine their hypotheses and reallocate R&D dollars in real time based on data generated in the clinic”.
The analysis also pushes for biotech’s to get more involved in cross-industry collaborations. “While participation in these efforts requires the commitment of resources, including capital and senior leadership time, it can offer benefits for companies seeking to avoid wasting precious resources on common challenges”. In addition, involvement in such initiatives “can help companies build trust with key stakeholders, which is particularly valuable at a time when payers and regulators are bringing more scrutiny to products”.