Biotechs continue to invest more in R&D; US analysis

Amid a robust period in the biotech industry, R&D spending continues to rise. According to the third annual study from BDO USA, an accounting and consulting organization, average R&D expenditure among biotechs increased 8% in 2012, compared to a 4% increase the previous year.

The 2013 BDO Biotech Briefing, which examined the most recent 10-K SEC filings of publicly traded companies listed on the Nasdaq Biotechnology Index, found that companies spent on average $54 million on R&D in 2012, up from $50 million in 2011 and $48 million in 2010. Biotech companies also saw an average 13% revenue jump in 2012. However, larger biotechs are the primary contributors to the increase. Large companies, which for the study have revenues over $50 million, saw a 28% increase in revenue, while smaller biotechs reported a 27% decline in average revenue last year.

Biotechs remain committed to R&D efforts despite reporting bigger losses in 2012. On average, companies reported a $50 million loss, up from $36 million in 2011. Nearly all small companies (98%) posted losses compared to nearly three-fourths (72%) of large companies.