Euro Biotech: A Fast-Growing Market Segment

Although biotechnology company shares might be out of favor at the moment, there is a great deal of upside for the sector in Europe, with continued growth expected until the turn of the century, according to a new report from marketing consultants Frost & Sullivan. It notes that there are around 600 companies involved in the European biotechnology market, compared to almost 1,200 in the USA.

The increased need for low-cost, high-efficacy drugs for the treatment of diseases for many indications, including oncology and central nervous system disorders, will result in extensive use of biotechnology in the area of health care. Moreover, the report notes, as the world's population increases dramatically, the need for higher yields to feed people will make imperative the use of biotechnology in the agricultural segment.

Although the seed of the biotechnology industry germinated in the USA in the early 1980s, European biotechnology has grown considerably in the 1990s, significantly closing the gap with the USA, F&S comments. The recession of the early 1990s had a serious impact on the R&D spend-intensive biotechnology industry, but growth resumed after 1993.