There has been a flurry of news reports this year showing the heightened awareness of the biotech industry and the concomitant growth.
Business Week recently published an article touting that Biotechnology has finally come of age after 30 years of biological research. Now, recent developments in gene and exotic chemical manipulation have brought a wave of biological drugs, many of them reengineered human proteins. These drugs represent real progress for a range of diseases all but untreatable just five years ago.
The article points out that a decade ago there were fewer than 10 oncology drugs in clinical trials, most of them highly toxic chemotherapies. Today, there are 230 medicines and related products created from biotech techniques with over 400 cancer drugs being tested in humans, and almost all are targeted biotech drugs.
Last year alone, the Food & Drug Administration approved 20 biotech drugs and there are at least 50 of 250 biotech drugs currently in late-stage clinical trials that should gain FDA approval. This represents a success rate of almost three times that of Big Pharma.
This all means that biotech investors are starting to be optimistic even though few of the 1,500 companies in this sector are profitable (see BW Online, 6/2/05, “Why Biotech Stocks Are Sedated“). A new report from Ernst & Young shows a 17 percent increase last year in global revenues at publicly traded biotech companies, to $54.6 billion. In the United States, equity financing rose 17 percent, to $16.9 billion from $14.4 billion in 2003. In Europe, the percentage increase was even higher, with equity financing increasing 31 percent, to $3.4 billion last year from $2.6 billion in 2003.
It’s not all rosy, though. The biotechnology industry lost a combined $6.4 bln in 2004, according to Ernst & Young, leaving biotech a money-losing, niche industry of 1,400 companies that employ about 183,000 workers nationwide.
But the drugs are selling. Ernst & Young International estimates that nine new biotech drugs approved in 2004 will bring in total revenues of $3 billion this year. By 2007, sales of just those products should grow to $8 billion. These numbers have spurred efforts by Big Pharma to mimic biotechs or merge with them.
Interestingly, the article points out that this blooming of biotech really owes a debt of gratitude to academic researchers who, since 1973, have been the real forefront to gene manipulation and gene targeting.
Many now see stem cells as the next great advance of bio-medical research, which may enable many different kinds of tissue regeneration in patients to repair or replace diseased organs.
Let’s hope politics don’t get in the way of real advances in medicine.
