Market Trends

We all know that consumer spending is down and companies across the board continue to struggle. Certain biotech areas are however flourishing, whilst the biotech market in general is sending mixed signals as to its state of health. According to the UK Trade and Investment Investment Services, in its article “UK Biotechnology and Pharmaceuticals Opportunities,” the UK  “is one of the world’s most attractive locations for international pharmaceutical and biotechnology operations.  UK companies account for 40 per cent of biotechnology products in the pipeline by European public companies.”

Another government review suggests the UK biotech sub-sector includes over 400 companies, employs over 25,000 people and generates revenues of £3 billion, the majority of which are small, young, privately held and loss making.  However, the broader bioscience/healthcare sector – encompassing diagnostic, device, service and supply companies, but excluding major pharmaceutical companies – includes over 1,100 companies, employs 100,000, people and looks a more attractive investment proposition, generating revenues of £11 billion.  This is CIPM’s area of focus. These figures put the UK on a par with one of the major US biotech clusters, such as Southern California or New England and well ahead of major European rivals in Switzerland, France and Germany.

The recent drying up of finance for biotechs in areas where investors has believed the market to be risky, such as start-ups and pharmaceuticals,  has certainly been a problem for the industry, but a recent report from Reuters claims that some of Europe's cash-strapped biotech companies may just be able to see a light at the end of the tunnel. To quote the UK Inward Investment Report 08/09 produced by UK Trade and Investment Services,  “the healthcare and medical technology sector also remained buoyant, helped by the UK Government’s continuing commitment to increase investment in the NHS”.  The NHS acts as a highly effective incubator of life sciences achievement, boosted by its close relationship with UK centres of academic excellence and its focus on the progress of translational medicine.”

It will be interesting to watch the newly formed Office for Life Sciences, dedicated to improving the operating environment for the pharmaceutical, medical biotech and medical devices sectors as a driving force in healthcare innovation in the coming year. The Office is staffed by officials from the Department for Business, Innovation and Skills, the Department of Health and HM Treasury and is led by Lord Drayson, Minister for Science and Innovation.

Bioscience 2015, written by the Bioscience, Innovation and Growth Team.

October 2009