Big Biotech growth outpacing Big Pharma

affiliate-marketing-salesAs healthcare shifts to a new value-based focus, Big Biotech companies are showing that they are better positioned than their pharmaceutical industry counterparts to meet changing demands.

Big Biotech has outpaced Big Pharma in terms of growth of sales, income, investment in R&D and market cap during the past three years. As the industry moves away from the time of the one-size-fits-all blockbuster, the biotechnology industry’s strength at developing innovative therapies that meet unmet medical needs and target the molecular mechanisms of diseases gives it an advantage in creating value.

But as pricing pressures become an increasingly challenging prospect for the companies like pharmaceutical and biotechnology, they will need to find new ways to build relationships with payers, providers and patients to capture value outside of their products.

Big Biotech experienced a 57% increase in market cap for the three years ended December 31, 2012. As the total value of the group reached $260.6 billion from $160.1 billion at the end of 2009. That compared to a 17.4% increase for Big Pharma during the same period as the market cap for the group climbed to a collective $1,257 billion from $1,070 billion.

The big jump in the value of Big Biotech companies is not just a matter of investor speculation – these companies have had significant clinical and market successes that have driven their value higher.

Net income for Big Biotech jumped 23.3% during the three-year period, to $11.0 billion from $8.9 billion. That compared to an increase of just 1.1% for Big Pharma, as its net income rose to $96.4 billion from $95.4 billion.

Revenue growth for Big Biotech grew 40.6% to $48.6 billion at the end of 2012, from $34.3 billion three years before, compared to an increase of 17% for Big Pharma, whoses revenue rose to $526.8 billion from $450.1 billion during the same period.

The growth in revenue for Big Biotech has been reinvested into increased R&D spending, which has grown 38.8% to $10.3 billion, or more than triple the 11.7% increase in R&D spending by Big Pharma during the period. The latter group’s spending reached $76.3 billion at the end of 2012, up from $68.3 billion.

Biotech’s products will dominate the list of top-selling drugs for Big Pharma and be the most prized assets in their pipelines.

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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