Top 10 Biotechnology Companies - SWOT Analysis, Competitive Benchmarking, Financial Analysis and R&D Pipeline

18 May 2010 • by Natalie Aster

GBI Research’s new report “Top 10 Biotechnology Companies - SWOT Analysis, Competitive Benchmarking, Financial Analysis and R&D Pipeline” provides an insight into the global biotechnology industry and analyses the competitive positioning of the top 10 companies in the industry. The report estimates the market size of the global biotechnology industry and its future prospects. It benchmarks the leading companies in the biotechnology industry on selected parameters to analyze their competitive positioning in the market. The future landscape of the biotechnology industry is also analysed by forecasting the revenues of leading companies till 2012. For each company this report analyses the financial strength, product portfolio, pipeline strength and therapeutic focus of its R&D activities. It critically examines the strengths and weaknesses of individual companies and the opportunities and threats facing them.

The Average Growth in the Biotechnology Industry Has Been More than That of the Global Pharmaceutical Industry

The biotechnology industry has emerged as a major growth area in the global healthcare industry. Since its emergence in the 1970s, biotechnology industry has shown tremendous growth to reach approximately $90 billion in 2008. GBI Research analysis suggests that biopharmaceutical drugs have outperformed the pharmaceutical market in the past few years. The biotechnology industry witnessed a YoY average growth rate of approximately 19% in 2008 over 2007. This is very high as compared to the pharmaceutical industry growth rate of 6% in the same time period.

On an average, the revenues of the top 10 publicly listed biotechnology companies have increased by approximately 14% in 2008 over 2007. In fact, companies such as Celgene recorded revenue growth rates in excess of 60% in 2008. In contrast, the biggest player Amgen recorded low growth rates, mainly because of safety concerns related to some of its products. The high growth in the revenues of biotechnology companies can be attributed to their focus on areas of clinical need that are unmanageable with conventional therapeutics like oncology, infectious diseases including HIV and autoimmune disorders. A strong product pipeline for most of the top 10 biotechnology companies will result in the continuation of this growth trend in the future.

The Competitive Landscape Will be Dynamic with Many Companies in the Race for a Bigger Pie in the Biotechnology Market

GBI Research’s analysis suggests that the competitive landscape of the global biotech industry is dynamic and will change in the near future. Currently, Amgen is the global biotech leader in the biotech industry with revenues of $15.0 billion in 2008. Genentech is a close second with revenues of $13.4 billion. Over the next 5 years, Genentech is expected to replace Amgen from the leadership position through the introduction of potential blockbusters and market expansion of other current blockbusters. The revenues of Genentech are expected to reach $17.9 billion by 2012, growing at a CAGR of 7.5%.

Other companies that will grow and move up towards leadership position within this fiercely competitive industry include Gilead Sciences, Genzyme and Celgene. The revenues of Gilead Sciences are expected to grow at a CAGR of 14.3%, to reach approximately $9.1 billion by 2012. Genzyme will grow at a CAGR of 11% from 2008 to 2012 to move up the order of top 10 companies and replace UCB Pharma. Celgene, ranked number eight, recorded a growth of more than 60% in its revenues in 2008 as compared to 2007. It is expected to witness the highest growth (17%) amongst the top 10 companies from 2008 to 2012. Biotech competitive landscape is expected to change significantly in the future based on the strength of the pipeline products of the top 10 biotech companies.

Strong R&D Approach Will Govern the Future Competitive Landscape of the Biotechnology Industry

Biotechnology industry is strongly based on innovation and this will dictate the future competitiveness of the players within the industry. The importance of R&D can be assessed from the fact that the top 10 biotechnology companies spent approximately $11.8 billion on R&D activities in 2008. This accounted for approximately 18% of their total annual revenues. Genentech and Amgen boast of the most promising pipelines among the biotech companies. Genentech’s pipeline drugs are currently undergoing clinical trials for 51 indications. Amgen and Celgene are close followers with more than 30 drugs being tested for various indications.

The R&D expenditures of CSL Limited were recorded at $265m in 2008. GBI Research Analysis suggested that CSL, Gilead and Actelion are faced with a weak pipeline which might curb their future growth. However, since patents of none of Gilead’s HIV products expire before 2013, the growth is likely to continue for Gilead Sciences with increasing sales of its current products. A strong R&D approach coupled with equally strong marketed products will shape the future competition in the biotechnology industry.

High Growth Therapy Areas Will Provide Impetus to the Revenues of Top 10 Biotech Companies

Oncology and infectious diseases are the high growth therapeutic areas that will drive the growth of the biotechnology industry. The biotechnology industry pipeline mainly comprises of products for oncology (35%), infectious diseases including HIV (28%) and others (37%). Oncology constitutes a significant part of the pipeline portfolio for each of the top 10 biotech companies. It accounts for 45% of Amgen’s product pipeline, 66% of Genentech’s and 63% of Cephalon’s pipeline portfolio. Other important focus areas for the top 10 biotechnology companies include, infectious diseases and CNS disorders. Gilead Science’s R&D efforts are primarily directed towards treating HIV/AIDS, with 35% of its product pipeline focused on HIV.

GBI Research’s analysis suggests that the oncology based sales will potentially value approximately $90.8 billion in 2015, growing at a CAGR of 9% between 2008 and 2015. The HIV market is also expected to grow at a CAGR of approximately 4.5% between 2008 and 2015 to record a sales value of approximately $17.3 billion in 2015. These high growth therapy areas will fuel the revenue growth of the top 10 biotechnology companies in the future.

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