Biotech Firms Now Business Driven, Says KPMG

Biotechnology companies started as science-driven organizations but are now driven by business and the marketplace, according to KPMG of New York. Robert Esposito, national director, biotechnology and life sciences at the accounting firm says "the biotechnology industry as a whole is maturing, becoming business-driven and therefore more sophisticated in its approach to the marketplace. He adds that biotechnology companies are also outsourcing to avoid costly infrastructure and so neither employee headcount or the age of a company are reliable measures of their maturity.

The KPMG study, entitled Blueprint for Growth: Building the Biotechnology Business, indicates that the industry is now divided into three areas: emerging companies lacking a customer-focused approach to product development; middle-tier companies with varying degrees of focus on customer needs; and top-tier companies with a sophisticated view of the health care market. The top-tier firms, comments Mr Esposito, are those which are "adequately planning for the transition from R&D to manufacturing" and undertaking pharmacoeconomic studies early in the product development process.

Meantime, says the Washington Biotechnology and Biomedical Association, the increased likelihood of litigation in the USA, especially in younger, high-risk industries such as biotechnology, is putting a heavier burden on business expansion. Lawsuits are also forcing companies to pay more for capital and limit funds for investment and R&D. The association said it welcomed congressional efforts to outlaw frivolous securities lawsuits and added that it backed moves for reform legislation.