According to IBISWorld, the US Biotechnology Industry is a relatively young industry with numerous opportunities for new applications. While recent developments have helped drive growth since 2006, they have failed to defend against the economic downturn. Revenue in 2008 and 2009 declined, but growth returned in 2010. In 2011, revenue increased 6.2% to
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. As a result, the industry experienced its first year of profitability.
Mergers and acquisitions (M&A) are increased during the five years to 2011, with the number of companies decreasing at an average annual rate of 1.8% to 1,689. 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. Profit is projected to continue improving as M&A activity continues during the five years to 2016. Pharmaceutical manufacturers have acquired biotechnology companies in order to diversify product lines. This trend is effectively slowing growth in the number of industry operators, which is projected to remain flat during the five years to 2016.
According to IBISWorld analyst,
For more information, download the full report from IBISWorld on the Biotechnology industry
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