Biotechnology companies continuing to grow despite economic slowdown

The biotechnology industry, both in the USA and Europe, continues toachieve good growth despite the current economic slowdown and reports suggesting that the latter still lags well behind that of the USA (Marketletter May 28). The largest 100 biotechnology companies worldwide in terms of their stock market capitalization increased their revenues 25% on average in 2000, according to analysis carried out by the German newspaper Handelsblatt, which notes that around a quarter of the leading firms were operating in the black last year and had positive cash flow.

This group included the US firms Genentech, Amgen, Biogen, Genzyme and Immunex, while in Europe, the most profitable biopharmaceutical companies included Serono, Elan, Celltech and Shire, which owe their positions to an aggressive strategy of acquisition, the report states.

Furthermore, most industry observers maintain that many more biotechnology companies will emerge on the market with new drugs and will be able to achieve consistent levels of profitability. The Munich, Germany-based investment adviser Medical Strategy estimates that in the period to 2004, the number of profitable biotechnology companies in Europe could easily quadruple.