Biopharm Development & Manufacturing
study, and 90 percent more than larger companies spent per
employee in 2012.
The results of this increased R&D; effort were recently
identified in a report from the Pharmaceutical Research and
Manufacturers of America (PhRMA), which noted that U.S.
biopharmaceutical research companies are currently developing 452 new medicines and vaccines for the treatment of rare
diseases, all of which are now in human clinical trials or under
review by the FDA.
As biotechs continue to prioritize prudent cash management,
companies reported $134 million in liquid assets in 2012, up
7 percent from 2011. This allowed biotechs to hold on average
an equivalent of 2.49 years of R&D; spending in 2012.
This September, the NASDAQ Biotechnology Index hit a
record high, up over 46 percent. Big biotechs are attracting
more investors in light of new drug approvals, positive data,
and growth in sales and earnings. Heavy merger and acquisition activity continues, but at some point the increase in valuations may slow down the pace of M&A; activity. As we enter
2014, we expect investor appetite for the biotech sector will
remain very strong and companies will continue to pursue the
public markets as a vehicle for obtaining the capital needed to
continue product development. The challenge for these new
public companies will now include meeting the expectations of
their new investors and operating under the scrutiny of public
markets.
About the Authors
Aftab Jamil is a partner and leader of the Technology
and Life Sciences Practice at BDO, an accounting,
tax, financial advisory, and consulting organization.
Ryan Starkes is a partner and leader of the Life
Sciences Practice at BDO.
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January 2014
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