slows down industry growth in APAC
Life science industry in Asia Pacific has encountered its
first speed breaker year in 2008 and the outlook for 2009, though
positive, is not particularly optimistic. Year 2008 was a year, when
one expected that the critical mass life science industry had gained in
2007 will show great results, but uncertain economic climate and the
currency fluctuation took its toll. However, it is worth mentioning
that the situation is not as bad as some other industries. The overall
outlook is still positive.
The industry, which according to BioSpectrum estimates was pegged to
grow at 13 percent in 2008 has registered an overall growth of 3.5
percent clocking $107.21 billion in revenues. This figure includes
total revenues from sales, licensing, and service income of the
companies in the Asia Pacific region, excluding Japan.
The scope of the survey is limited to core life science companies
spanning the segments of pharmaceuticals, biotechnology and medical
devices across Australia-New Zealand, China, India, Malaysia,
Singapore, South Korea and Taiwan. General healthcare and equipment
providers are excluded from this survey. The BioSpectrum research team
has used its discretion to make some exceptions to these exclusions
keeping in view the industry landscape in various countries.
The countries where exceptions have been made include China, Taiwan and
Malaysia. While the survey spanned all the publicly listed life science
companies across stock exchanges in Asia the estimations on private
companies was arrived at by a sample survey across countries,
corroborated with market estimates from the various industry
associations in respective countries.
(*for the year April
industry gets hit by slowdown, grows at 3.5%, clocks a total revenue of
growth in 2009 is pegged in the range of 3-5%
Chindia accounts for 52% of the Asia Pacific life sciences industry
The revenue figures across these Asia Pacific markets were standardized
to US dollars and the calendar year to arrive at the estimates and
company ranking. The growth has been estimated factoring in currency
fluctuation, which is a global market reality today. (BioSpectrum Asia
Pacific Survey 2008 does not use constant dollar rate.) Currency
fluctuation has resulted in many of the companies showing a negative
growth when standardized to US dollar. The statement applies more to
South Korea than any other country.
The research team at BioSpectrum estimated the industry figures by
extrapolating the data available from the survey of the public listed
companies in the region and corroborating it with the data available
from the various research reports, and country statistics released by
various government agencies and industry experts. BioSpectrum estimates
the growth in 2009 to be in the range of 3-5 percent. The economic
climate is unlikely to show substantial change until 2010.
In 2008, of the total industry revenue of $107.21 billion about 78
percent came from pharma and pharma outsourcing services. Medical
technology accounted for 12 percent, followed by biotech at 10 percent.
In terms of segment share, a trend that is likely to pick up in the
years to come is the increasing biotech share in the overall revenue.
In 2008, the biotech share in the revenue increased by 2 percent
marking the beginning of the shift.
China & India led the growth making up for 52 percent share of
the overall revenue with China clocking $33.23 billion and India
following it with $22.51 billion. This was followed by Singapore, South
Korea, Australia-New Zealand, Taiwan and Malaysia in that order.
Singapore has shown a remarkable increase of close to 3 percent over
its share in overall revenues of 2007. This is the highest increase
recorded among the countries. The island nation's biomedical
infrastructure investment is beginning to record good returns from this
year. In 2008 survey Australia and New Zealand have been clubbed
together making up for 12 percent in the overall pie with New Zealand
accounting for 1.3 percent share.
The revenues of the 273 publicly listed companies account for 30.72
percent of the overall revenue of $107.21 billion. India led the region
clocking $14663.37 million, making up 44.29 percent share of the
publicly listed companies' revenue. China became a distant
second with 18.57 percent share in close contest with
Australia's 18 percent share. It was followed by South Korea,
Taiwan, Malaysia & Singapore.
The Top 3 companies CSL and Sigma Pharmaceuticals of Australia and
Ranbaxy of India made up 36.25 percent share of Top 20 companies
generating over $6 billion of revenues during the calendar year 2008.
It accounted for 18.51 percent share in the overall revenue of public
In the Top 20 list the top 5 companies accounted for close to 50
percent revenues. However, in 2008 most companies registered a decline
in revenue growth with only 6 of the Top 20 companies recording a
positive growth. In fact, due to pricing pressures and currency
fluctuations about 50 percent of the companies surveyed showed negative
growth. Of this most notable was Mindray Medical of China that grew
over 75 percent to improve its ranking by a great leap to 9th position
from the last year's 20th position. Wockhardt of India grew
over 60 percent only to retain its 8th rank in the list. China Pharma
Group made it to Top 5 with a growth of 38.2 percent India's
Ranbaxy Laboratories, which was acquired by Daiichi Sankyo, even though
declined marginally improved its position to Rank No 4 largely helped
by the slow growth of its closest competitor in India Dr
Reddy's Laboratories. The Top 20 companies list was
dominated by pharma and biopharma companies with the exception of
China's Mindray Medical and Australia's Cochlear.
In 2008, South Korea made it to the list with 4
companies-Dong-A, Yuhan Corporation, Hanmi Pharmaceutical,
and Daewong Pharmaceutical. India dominated the list with 9 companies.
Revenues from the companies listed on Indian stock exchanges made up
44.29 percent share of the total publicly-listed company revenues. This
was followed by China and Australia with about 18.57 percent and 18
percent share respectively. South Korea made up for 15.26 percent.
In 2008, four companies made it to the billion dollar club, with Top 2
CSL and Sigma from Australia having revenues in excess of $2 billion.
The next two companies Ranbaxy and Cipla of India made it with a little
over a billion. The year also saw 6 new entrants split between China
& South Korea make it to the Top 20 list. A strong indication
of the growth in these countries.
From the 273 publicly-listed companies surveyed only 15 had revenues in
excess of $500 million. However, the number of companies with revenues
in excess of $100 million grew to 76, quite an improvement over last
year's figure of 52 companies.
Overall, the publicly listed companies averaged a growth of 11.64
percent. In 2008, at the regional level for publicly listed companies
China became the fastest growing market showcasing a percentage change
of 45.93 percent. Malaysia followed in with 32.21 percent growth and
Singapore companies averaged a growth of 23.32 percent. Taiwan
companies also grew over 13 percent. Australia and India did not
average to a double digit growth dragging down the overall performance.
Looking at the growth of revenue blocks, in South Korea companies below
$10 million revenue grew at phenomenal 125.68 percent. While in
Australia it was the companies in the range of $11-$50 million that
showed a growth of over 40 percent. However, for companies in the range
of $300-$600 million the large countries Australia, India and South
Korea showed a drop while China recorded a growth of over 30 percent.
Australia also averaged a decline for companies with revenues in excess
of $600 million.
Recession slows down industry growth in APAC