|
2.1
Biotech startup companies 1, 2
|
|
Europe
(x ECU M)
|
USA
(x ECU M)
|
|
|
1994
|
1995
|
1996
|
1994
|
1995
|
1996
|
|
Number
of companies
|
485
|
584
|
716
|
1.311
|
1.308
|
1.287
|
|
Employees
|
16.100
|
17.200
|
27.500
|
103.000
|
108.000
|
118.000
|
|
Revenues
|
967
|
1.371
|
1.721
|
8.598
|
9.663
|
11.680
|
|
R&D
expenses
|
499
|
1.252
|
1.508
|
5.402
|
5.859
|
6.320
|
|
Equity
financing
|
215
|
1.206
|
1.113
|
3.196
|
3.500
|
3.750
|
|
Number
of companies
|
-
|
400
|
1.600
|
-
|
2.988
|
2.768
|
In
Europe, the equity financing in 1996 included ECU
750 M from initial public offerings, ECU 600 M
from followup offerings, and ECU
260 M
from venture capital investments. By the end of
1996, 49 European biotech companies were quoted on
the stock market, compared to 28 at the end of
1995.
In
1996 the total number of biotech companies in the
USA dropped to 1.287, which included a total of 177
companies that were quoted on the stock market, 62
that were financed privately, and 17 that were
wholly owned. In the USA equity financing included
USD 274 M from initial public offerings, USD 660 M
from private placements, and USD 563 M from
venture capital.3
The European companies can be categorized according
to the various market segments addressed, i.e.
therapeutics (26%), contract research/manufacturing
(14%), industry suppliers (16%), diagnostics (18%),
agrobio (8%), environmental (6%), food processing
(4%) and biochemicals (13%). The majority of these
companies have less than 50 employees.
In the USA a similar size distribution exists:
about 80% of the companies employ less than 50
people. 27% of the European biotech companies
reside in the UK; about 13% in France, resp.
Germany. For the complete overview see
Figure 1.
In the list of 'top 100' biotech companies ranked
according to their 1995 revenues, eight reside in
the UK, one in Ireland, and the remaining 91
companies in NorthAmerica. The first European
biotech company on the list is the Celltech Group,
which ranks number 15 with revenues in 1995 of
USD 38 M. The number one position on the list
is for Amgen with sales of USD 1.9
billion.
It is important to realize that the comparison
between European and US companies is confused by
the fact that a series of US biotech companies is
owned by European pharmaceutical houses: e.g.
Zymogenetics by NovoNordisk, Genetic Therapy by
Sandoz, Genetic Systems by Sanofi; Bayer Technology
by Bayer, Ares Advanced Technology by AresSerono,
and Applied Immune Sciences by RhonePoulenc, but
also by the unidirectional (equity) participation
in US startup companies.
2.2
R&D output
In the five year period 19891993, the
pharmaceutical industry has generated 203 New
Chemical Entities (NCEs) with 44% of the NCEs
originating from European companies, compared with
26% >from US and 28% from Japanese
pharmaceutical companies. In 1995, 51 NCEs were
launched worldwide, 30 from European, 14 from US,
and 7 from Japanese companies. These figures seem
to be in line with the R&D expenditure ratios
(versus revenues) with an average of 15.1% for
European, 12% for US, and 10% for Japanese
pharmaceutical companies. However, the overall
R&D expenditures of European and US
pharmaceutical companies respectively approached
approx.
USD 15 billion in 1995 each.
In 1995 the number of NCEs approved amounted to 42,
which included 8 NCEs based on biopharmaceutical
products. Prof. J. Drews (HoffmannLa Roche) has
predicted that in the year 2000, 100 biotech
related NCEs will be introduced into the market. At
this moment 200 biopharmaceuticals are in clinical
development, many of them bearing relevance to
animal cell technology.
It should be noted that a major investment in
enabling technologies is made by the pharmaceutical
industry to reinforce their drug discovery process.
These investments relate a.o. to genomics and are
focussed on the identification of new genes that
encode novel drug discovery targets. Thus
identified genes can also be used as lead for
development of gene and antisense therapy. No
concrete figures on investments in this area are
available although estimates of
USD 2 billion have been described.
Although these figures appear to indicate a
positive trend for the European health care
industry,some fundamentals appear to be less
positive.
If we look for example at worldwide biotech patents
granted, the US health care industry is taking the
lead with 41% of all patents issued versus 19%
originating from Europe and 36% from Japan, despite
the fact that the overall R&D expenditures of
European and US pharmaceutical companies are of the
same order of magnitude. Probably the patenting
awareness in the US has been better developed than
in Europe. In addition, a substantial part of the
research expenditures in the US is specifically
allocated towards cuttingedge biotechnology
research by startup companies (see section 2.1:
R&D expenses of ECU 6.3 billion in the USA
versus ECU 1.5 billion in Europe). Moreover, a
substantial part of R&D expenses of European
pharma houses is invested in US biotech! As shown
by many questionnaires a predominant patent
position is considered a prerequisite for building
a flourishing biotech industry and, thus, Europe is
still facing a serious backlog.
2.3
Biopharmaceuticals on the market
From the leading eight biotech drugs, seven have
been developed by US biotech companies, whereas
only one by a European company.
îLeadingï is defined by ranking
according to worldwide revenues in the year 1995;
followup (metoo) biotherapeutics have not been
taken into account or have been listed in 'italics'
.
Decision Resources Inc. has made an analysis of the
current and historical sales of the major
biotherapeutics. The worldwide sales amount to USD
10 billion in 1995 with blockbusters such as
erythropoietin (sales over USD 2 billion), and
GCSF, human growth hormone, human insulin and
Interferon with sales over USD 1 billion each. The
sales forecasts for these various products are
based on a compounded annual growth estimate of 1%.
Obviously, the predicted sales growth of
biopharmaceutical products beyond the year 2000 is
to be realized through launching of new
biotherapeutical NCEs.
Nevertheless, the overall growth rate is expected
to slow down because of pricing pressure, a
relative lack of new predominant protein drugs,
small patient populations to be addressed and
saturation of existing markets. In the list of the
leading 100 prescription drugs by worldwide sales
in 1995, 9 biotherapeutical drugs are quoted.
Only a Hepatitis B vaccine, a growth hormone
preparation and insulin are marketed by European
pharma houses.
2.4
Regulatory affairs
With the introduction of the European Medicines
Agency, Europe has made a significant step forward
to achieve a Europewide registration system.
Nevertheless, some hurdles remain before real
harmonisation will be achieved due to the fact that
member states have introduced additional hurdles as
to reimbursement and pricing. Comparison of the
drug approval periods by the EMEA and the US FDA
reveals that the performance of FDA is
significantly better than of the EMEA. For
biotechnology related products the difference,
however, does not seem apparent. Approval has been
obtained in 11 out of 24 approval procedures in
Europe prior to US approval.
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1. Introduction