Beyond Borders: Global biotechnology report 2010

together improved their net income by
about US$1 billion, as well as up-andcoming
firms such as Human Genome
Sciences and Jazz Pharmaceuticals.
Europe
Like their US-based counterparts,
European biotech companies
demonstrated considerable resilience in
the economic downturn. The number of
public companies decreased by only 4%,
from 179 companies in 2008 to 171 in
2009 — a much smaller drop than most
industry watchers had expected.
Revenues of publicly traded European
companies grew from €11.0 billion in 2008
to €11.9 billion in 2009 — an 8% increase
that was well below the 17% growth seen
in 2008. While several of Europe’s leading
companies — including Actelion, Crucell,
Elan, QIAGEN and Meda — continued to
post double-digit revenue growth rates,
UK-based Shire saw a significant slowdown
on its top line. This was largely the result
of the introduction of generic competitors
to Adderall XR, its blockbuster drug for
treating attention deficit hyperactivity
disorder. Excluding Shire, Europe’s other
large companies — those with revenues
greater than €200 million — saw their
combined top line expand by a robust 14%.
However, smaller public companies below
the €200 million threshold saw revenues
decline by 1%, dragging down the overall
sector’s performance.
As in the US, R&D expenditures failed to
keep pace with revenue growth. European
public companies’ R&D expenditures
were essentially flat, posting a modest 2%
decrease in 2009. This was driven not by
a few large companies, but rather by R&D
cutbacks across much of the industry.
Similar to the situation in the US, close to
60% of public companies reduced their R&D
expenditures in 2009.
US biotechnology at a glance, 2008–09 (US$b)
Public company data
Ernst & Young survival index, 2008–09
2009 2008 % change
Product sales 48.2 53.9 -11%
Revenues 56.6 65.1 -13%
R&D expense 17.2 22.6 -24%
Net income (loss) 3.7 0.4 782%
Market capitalization 270.4 340.7 -21%
Number of employees 109,100 120,300 -9%
Financings
Capital raised by public companies 13.5 8.6 58%
Number of IPOs 3 1 200%
Capital raised by private companies 4.9 4.4 10%
Number of companies
Public companies 313 366 -14%
Private companies 1,386 1,405 -1%
Public and private companies 1,699 1,771 -4%
Source: Ernst & Young
Data were generally derived from year-end information (31 December). The 2009 data are estimates based on January—September
quarterly filings and preliminary annual financial performance data for some companies. The 2008 estimates have been revised for
compatability with 2009 data. Numbers may appear inconsistent because of rounding.
US Europe Canada
2009 2008 2009 2008 2009 2008
More than 5 years of cash 30% 20% 45% 28% 22% 19%
3–5 years of cash 8% 5% 11% 7% 5% 4%
2–3 years of cash 8% 11% 7% 13% 5% 0%
1–2 years of cash 18% 20% 12% 14% 17% 19%
Less than 1 year of cash 36% 44% 25% 37% 51% 57%
Source: Ernst & Young and company financial statement data
Chart shows share of public companies in each location. Numbers may appear inconsistent because of rounding.
The cost cutting helped boost the sector’s
net income by a remarkable 68%, as
combined net loss fell from €913 million
in 2008 to only €288 million in 2009.
Out of this €625 million improvement on
the bottom line, €147 million came from
the decrease in public company count,
since most of the companies that ceased
operations or were acquired during the
year were in a net loss position. Despite
slowing revenue growth, Shire was able
to deliver strong growth on the bottom
line, and a number of other companies
— including Genmab, Meda, Photomed,
Q-Med and QIAGEN — posted strong
increases in net income.
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