Global Biotechnology Industry Market Research Report Now Available from IBISWorld

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Industry firms thrived on the back of technological advances that facilitated new discoveries and stimulated greater demand from firms in the pharmaceuticals and agricultural sectors; as a result, industry growth is forecast to continue skyrocketing in the next five years as investment in biotechnology from around the world increases, particularly from emerging economies. For these reasons, industry research firm IBISWorld has updated its report on the Global Biotechnology industry.

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After growing modestly during the recession, the industry will prosper with strong demand

The Global Biotechnology industry comprises a large range of firms engaged in biotechnology activities. On one end are small, dedicated biotechnology companies that are research and development (R&D) intensive and operate primarily with venture capital, grants, initial public offerings and collaborative agreements. On the other end are large, diversified companies with significant in-house R&D resources and well-established production, commercialization and distribution processes. IBISWorld estimates that Global Biotechnology industry revenue will reach $262.0 billion in 2013, having increased at an average annual rate of 11.0% over the past five years. “Growth is expected to continue in 2013, with revenue expected to jump 12.7%,” says IBISWorld industry analyst Anna Son. This increase follows a relatively modest 8.7% rise in 2009, as the global recession eroded demand for nonessential health products and easing fuel prices tempered the biofuels craze. The greater effect the recession had on the industry, however, was that private investors became reluctant to provide capital because the collapse in stock prices prompted increased risk aversion. This investor reluctance eased in 2010, although investors remain highly sensitive to any economic weakness. Any prolonged lack of funding would reduce firms' R&D budgets, which, if not reversed, will jeopardize the industry's future revenue growth.

The Global Biotechnology industry continues to be populated by many small companies, alongside a few giant pharmaceutical, chemical and agricultural firms. IBISWorld estimates that the top industry players are Roche Holding AG, Amgen Inc. and Merck KGaA. Because companies specialize in certain diseases or products that are not transferable across other industry segments, concentration tends to stay low, says Son. In addition, the industry is still in the growth stage of its life cycle, and despite medium barriers to entry, new players are expected to enter the market to provide niche services. Furthermore, continuous technological advancements and the rapid growth of emerging markets leverage industry capabilities. Over the next five years, IBISWorld projects the industry will experience increased merger and acquisition activity as companies seek to expand their operations by acquiring domestic and foreign competitors. Nevertheless, market share concentration is not expected to increase substantially. Additionally, more biotechnology companies are partnering with pharmaceutical manufacturers as the pharmaceutical industry faces a patent cliff. In upcoming years, many blockbuster drugs will lose patent protection, exposing them to generic competition. This factor has increased the incentive for pharmaceutical firms to partner with biotechnology companies to develop biopharmaceutical drugs.

The vast majority of revenue is generated in the European Union and the United States, where the industry has shown growth over the past five years. The industry's major players reported recent slower growth rates for US sales compared with other parts of the world. This trend is expected to continue over the next five years as standards of living and healthcare access improve in emerging nations, such as India, China and Brazil. Over the next five years, the industry is expected to continue to prosper, with the Asia-Pacific region, particularly China, South Korea, Taiwan and Singapore, investing significant amounts of capital to gain a strong foothold in the industry. Larger players emerging as profitable entities following the global recession will continue pursuing low-risk strategies of success, including buying out smaller firms to collect successful research for commercial-ready technologies, and partnering with academic institutions. For more information, visit IBISWorld’s Global Biotechnology industry report page.

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IBISWorld industry Report Key Topics

Firms in this industry primarily use living organisms or molecular and cellular techniques to develop products that are used in agriculture, food, industrial and medicine production.

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 industry information and analysis. 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
IBISWorld
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