Beyond borders: global biotechnology report 2012

Financial performance heads back to normal

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After adjusting for large acquisitions, the industry’s revenue growth rate returned to double-digit territory for the first time since the global financial crisis.

The aggregate financial performance of publicly traded biotechnology companies in the four established clusters — the United States, Europe, Canada and Australia — showed encouraging signs of recovery and stabilization.

Growth in established biotechnology centers, 2010-11 (US$b)

Source: EY and company financial statement data.
Numbers may appear inconsistent because of rounding.

The acquisition of three large US companies — Genzyme Corp., Cephalon and Talecris Biotherapeutics —by non-biotech buyers made a significant dent in the industry’s 2011 performance.

To get a sense of the organic “apples-to-apples” growth of the industry, we have therefore calculated normalized growth rates that remove these three firms from the 2010 numbers.

After adjusting for these large acquisitions, the industry’s revenue growth rate returned to double-digit territory for the first time since the global financial crisis. R&D grew by 9% in 2011, after being slashed in 2009 and growing by a modest 2% in 2010.

US biotechnology at a glance, 2010-11 (US$b)

Source: EY and company financial statement data.
Numbers may appear inconsistent because of rounding.

As always, since the US accounts for a large majority of the industry’s revenues, the US story is very similar to the global one.

After normalizing for the acquisitions of Genzyme, Cephalon and Talecris , the US industry’s revenues increased by 12%, outpacing the 10% growth rate seen in 2010 and 2009 (adjusted for the Genentech acquisition).


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