Biotech Growth Rate outperforming classical pharmaceuticals
Description:
Over the last years, the growth rate of biotech industry has by far outperformed the one of the classical pharma industry. This has not had a positive impact on the profitability of biotech as such – profitability of most classical pharma majors is still higher than the one of most biotech companies – but it has shown in the development of stock prices. Biotechnology stocks have outperformed the ones of classical pharma majors thanks to the hope for future profits.
Enablers:
• Hope for good profit margins
• Hope for huge ROE
• Potential for spectacular breakthroughs in Research.
Inhibitors:
• Increase (instead of decrease) of R&D cost in biotechnology
• Decrease in R&D costs for classical drugs
• Entry barriers getting lower because of increased availability of fundamental research
• Drug Approval regulations getting stricter
• Insecurity regarding the development of legal frameworks
• Price Pressure due to exploding healthcare cost
Paradigms:
• Investors look elsewhere
Experts:
The Future of Biotechnology for Medical Applications in 2005, Growth/Development Issues
Timing:
Web Resources:
See our Research regarding Growth and Development issues