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Bio Technology : July 2009
AusBioFEATURE Sales and profitability of big pharma and biotech With the world in recession and 13.7m unemployed in the US, it is worth checking out the performance of the top pharma and biotech companies. These 18 companies are capitalised at US$1 trillion or 63% of the market value of US listed healthcare companies. The top companies reported sales of US$470b in 2008 (64% of all IM-reported global sales), an increase of 7% from 2007. Profits for 2008 were US$112b, up 8%. But sales and profits from the five major biotechs rose 18% and 23% respectively. Profit margins for the pharma companies were steady at 22.4% in 2008 (22.5% – 2007) and dipped slightly to 33.2% and 32.9% for biotech companies. March quarter 2009 margins were 24.9% and 32.4% for pharma and biotech respectively. While these figures seem robust enough, it’s going forward that matters. Will sales decline? Will margins be eroded? The lagged effect of busted western economies is bound to dent healthcare earnings to some degree, but by how much, nobody really knows. The issue for the big end of the drug world is the patent cliff, which is by some estimates a US$60b income cliff over which some drug companies are going to fall, basically tomorrow (in 2011). This ‘have-I-got-your-full-attention’ flashing light is one reason why Pfizer is buying Wyeth, Merck is buying Schering Plough and Roche has taken up the last slice of the Genentech pie. The fact that big pharma accounts for no more than a third of all NMEs approved by the FDA from 2006 through 2008 has also been a driver behind the high levels of M&A and partnering activity that has taken place in the last 12 months or so. However, the reality is that many biotechs, especially those without strong backers, have been crunched by the global financial crisis. Specialist biotech investors are for the most part supporting their portfolio companies. The IPO market has been like a football match in Mexico City* – utterly empty. The new medicines and therapies pipeline is stalled in parts, is dying in others and will be much reduced in future. * Reference to the swine flu outbreak in Mexico in May 2009. Sypharma GMP Manufacturing ADVERTORIAL Sypharma provides GMP clinical trial manufacturing services in a range of dosage forms for a number of Australian and International customers. Our client list includes large and small companies and research projects, and we are growing all the time. The services we provide include aseptic fill and finish, protein purification through filtration, viral reduction, as well as release chemical testing and microbial analysis. Sypharma is also licensed to manufacture Medical Devices, and transdermal gels. Sypharma is a Drug Incubator, who can project manage your GMP manufacturing and provide realistic estimates and timeframes for your GMP development. We can also co-ordinate your dealings with drug development laboratories to ensure uniformity and relevance of documentation and results. We tailor our services to your requirements, not the other way around, and know that you may only require a very small number of units for stability, phase 1 or pre clinical testing. We know the importance of GMP to you and to your future plans, and starting off early with GMP manufacturing can reduce a lot of headaches and replication of testing and trials later on. Our focus is on reproducibility of results which protects you and your shareholders. Starting GMP manufacturing early on is not as expensive as you might think, and can be staged to give you a solid data package to provide to regulators, evaluators and licensees at a reasonable cost, so please call or email us today for a quote. Sypharma Pty Ltd 27 Healey Rd, Dandenong, Vic Ph: 9706 4913 www.sypharma.com.au email@example.com Volume 19 • Number 2 • July 2009 Australasian BioTechnology 21