Biotech blasts back in 2003
industry, and 2004 looks set to be even better. This is the verdict
of James Burrill, head of US merchant bank Burrill & Co, who
describes the industry as "rising like a phoenix from the
ashes" in a just-released commentary.
The re-emergence of the industry is good news for contract biomanufacturing companies such as Lonza, which have suffered of late from the knock-on effects of less investment in biotech - a delay in bringing new biologics through clinical trials. The rebirth, coupled with the manufacturing undercapacity in the marketplace, suggests that the sector could be in for a lucrative 2004.
The biotech sector in the US will end the year with a total market capitalisation of around $320 billion, less than its $500 billion peak in 2000 but up nearly a third year-on-year. And this dramatic price recovery was accompanied by more than $16 billion in raised financing and seven new companies entering the public markets.
2004 will see the recovery continue, predicts Burrill, because many of the issues dampening down the sector have disappeared. The Medicare legislation has been passed and should increase the market for prescription drugs, including biologics, and there is new leadership at the US Food and Drug Administration (FDA) after a long period without a permanent Commissioner.
The threat of war in the early part of the year meant that the industry got off to a slow start, but 19 biotech drugs were approved, including the first biologics for psoriasis, asthma and Fabry disease, and these are likely to be joined by some important new drugs in 2004.
Among those lining up for approval are Genentech and Roche's Avastin (bevacizumab) and ImClone and Bristol-Myers Squibb's Erbitux (cetuximab; already registered in Switzerland) for colorectal cancer, Genta's antisense drug Genasense (oblimersen sodium) and CV Therapeutics' Ranexa (ranolazine) for chronic angina.
Financing activity will continue in 2004, although the initial public offering (IPO) market will remain a little 'choppy', said Burrill. He is predicting that 25 to 30 IPOs will take place, with total funding in the year set to reach $20 billion.
Outside the US - Europe, China, India, Eastern Asia and Australia - the biotech industry will be more robust, according to Burrill. These countries will continue to contribute new technology and increasingly become markets for biotech products and sources of capital, as biotech becomes an increasingly global industry.
