Biotech industry buoyant - but costs cutting must not hamper innovation
Biotech companies worldwide reported a profit in 2009 for the first time since 1985 as revenues increased and spending on R&D was cut. A report published by Ernst and Young Global Ltd revealed that the industry had made a profit of $3.7 billion, compared with a loss of $1.8 billion in 2008 in the U.S, Europe, Canada and Australia. At the same time, sixty percent of European firms reduced research costs and overall sales increased in the industry, driven primarily by a small number of large companies with well performing existing products.
Commenting on the report, EuropaBio Chairman Andrea Rappagliosi said “The data shows that even in these times of worldwide credit crunch the biotech industry is resilient and robust. Biotechnology will have a huge role to play in meeting Europe’s future goals for 2020 on Innovation, Employment and Skills, Competitiveness and the creation of a knowledge-based bio-economy. As an industry, we are working to grow in a smart way but this growth must also be sustainable. This is vital if we are to continue finding the innovative solutions that we need for patients, our environment and our energy and food needs.
EuropaBio’s Secretary General, Nathalie Moll added “In tough economic times the urge to cut costs is strong. Our biggest challenge for the coming years will be to ensure that the incentives to invest in biotech remain clear and strong.”
The report shows that smaller companies have been particularly hard hit as where cuts in capital have been made it is they, and not the larger companies, that are often the casualties.
Moll concluded “SMEs represent the engine that drives biotech innovation in the EU and we must help them to fulfill their potential. Biotech companies must be enabled, through the creation of a predictable, coherent and supportive regulatory environment, to continue finding solutions to some of society’s most important challenges. In this respect, we were encouraged by the Commission’s recent creation of an Innovation Committee and we hope that it will also address the challenges and opportunities for the biotech sectors in the future.”
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