Biotechnology is becoming an increasingly important part of product development in many industries
Melbourne, Australia (PRWEB) August 18, 2012
As genetically modified products continue pushing ethical boundaries, attitudes may begin to soften with the increasing acceptance of the process among the agricultural and other sectors. The Biotechnology industry is becoming an increasingly important part of product development in a wide variety of industries. Biotechnology companies are often spin-offs from research started in higher education, public and not-for-profit research organisations. According to IBISWorld industry analyst, Craig Shulman, “while a large amount of biotech research and development is funded by receipts from capital raisings and from interest income earned on cash balances, research in the industry is largely funded by government and non-profit organisations”. Nonetheless, the private sector is increasing its contribution. Revenue has only started to increase recently as many companies reach a stage of commercial readiness, and thus attract strong levels of investment.
IBISWorld forecasts that in 2012-13, the Biotechnology industry will generate revenue of $6.74 billion, an increase of 5.5%. Industry revenue is expected to grow at an annualised 2.2% in the five years through 2012-13. Shulman adds, “despite slower growth during the beginning of the period, strong levels of foreign investment have given the industry a boost”. Of particular importance are government allowances of biotechnology applications in recent years. These include the Federal Government's continued offering of Gardasil free of charge to all young women in Australia, and the decision made by the Victorian and NSW governments to allow the planting of genetically modified crops. In the five years through 2017-18, a larger proportion of firms will begin to generate sales revenue and move toward profitability. This will be as other biotech firms once again pursue research and development and struggle to seek out investment due to their high-risk levels in an internationally uncertain financial environment.
Australia's Biotechnology industry has a low level of market share concentration. Looking forward, most new entrants will be small firms that also concentrate on a single product line. In the medium to long term, as the industry matures, there will be downward pressure on concentration as a wider range of firms bring products to market resulting in a broader distribution of sales revenue. Countering this, however, will be merger and acquisition activity as more mature firms seek to bolster their product pipelines and capitalise on their experience in transitioning from the R&D stage to the commercialisation stage. The two major players in the industry are CSL Limited and Commonwealth Scientific & Industrial Research Organisation.
For more information, visit IBISWorld’s Biotechnology report in Australia industry page.
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IBISWorld industry Report Key Topics
Biotechnology is the application of science and technology to living organisms as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge and biotechnology products and services. Within the Australian context, this industry covers biotechnology research and development, biotechnology licensing, biotechnology product manufacture, and biotechnology product wholesale.
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Technology & Systems
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Recognised 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 Australian 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 Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.