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 international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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