Positive Results: Biotechnology in the US Industry Market Research Report Now Available from IBISWorld

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While the Biotechnology industry was not entirely immune to the recession, new product development, a favorable regulatory environment, an aging population and access to capital have kept it afloat. In the coming years, healthcare reform, environmental concerns and the increasingly aging population will drive solid revenue growth. Furthermore, federal mandates will likely benefit the industry, causing research and development to increase over the period. And demand for cutting-edge medicines and treatments will support the industry. For these reasons, industry research firm IBISWorld has added a report on the Biotechnology industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

A favorable regulatory environment and rising environmental concerns will drive growth

Biotechnology is a relatively young industry with numerous opportunities for new applications. While recent developments have helped drive growth since 2007, they have failed to defend against the economic downturn. Revenue declined in 2008 and 2009, but growth returned in 2010. Over the five years to 2012, revenue is expected to increase 4.4% per year to $87.0 billion. According to IBISWorld industry analyst Sophia Snyder, new product development, a favorable regulatory environment, an aging population and access to capital have largely driven growth in industry revenue.

The Biotechnology industry had relatively easy access to capital prior to the recession, but it forced biotechnology companies to deal with low investor confidence and a cash-strapped government. While investor confidence declined in 2008 and 2009, the industry still received financing from venture capital due to promising technologies in the field. In anticipation of a less favorable capital market, biotechnology companies took considerable steps to reduce costs in 2009, including reduced research and development (R&D) expenditures.

Mergers and acquisitions (M&A) have been increasing during the five years to 2012, with the number of companies rising at an average annual rate of 2.1% to 1,843. As small companies integrate with larger operators, overall access to resources for R&D and marketing has grown. Biotechnology companies also benefit from continued federal funding for biological defense, so pharmaceutical manufacturers have acquired biotechnology companies in order to diversify product lines. Says Snyder, “This trend is effectively slowing growth in the number of industry operators, which is projected to remain flat during the next five years.” Major companies include Amgen Inc., Roche and Monsanto Company.

Among other government programs, healthcare reform legislation will benefit the industry through 2017. The reform paves a clear path for generic biological drugs (which provides operators with foresight to plan) and provides tax breaks for smaller biotechnology operators. A favorable regulatory environment combined with an aging population and mounting environmental concerns will drive revenue. For more information, visit IBISWorld’s Biotechnology report in the US industry page.

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IBISWorld industry Report Key Topics

Firms in this industry primarily use living organisms or molecular and cellular techniques to provide chemicals, food and services that meet human needs. The industry excludes companies primarily involved in developing small-molecule pharmaceuticals, performing contract research or manufacturing biological equipment.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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