Global biotech industry continues to sizzle, market capitalization surpasses $1 trillion

Net income jumps 231% in 2014 to historic high of $14.9 billion. R&D spending surged 20% as companies in the US and Europe invested in their pipelines. Firms in the US and Europe raise a record $54.3 billion in capital in 2014


 A record 94 new US and European companies go public in red hot IPO market

The global biotechnology industry reached new heights in 2014, setting records on virtually every major financial metric, including revenues, profitability and capital raised. These positive performance indicators, combined with several high-profile product successes and a strong year for new drug approvals, drove the industry's total market capitalization above the $1 trillion threshold for the first time in its history. These and other findings were released in Beyond borders: Reaching new heights, Ernst & Young's 29th annual biotechnology industry report.

According to Mr Glen Giovannetti, EY's Global Life Sciences Leader, "The global biotechnology industry's outstanding performance and maturation are driving optimism that a new age of biotech innovation will create long-term value for companies, their investors, and patients. Investors are bullish on the future, investing historic amounts in the smaller players that will drive future breakthroughs."

But success can engender its own challenges. "Unprecedented product approvals have also brought unprecedented pricing pressures," added Mr Giovannetti. "Companies will need to continually demonstrate how their products deliver value and contribute to the overall sustainability of health care systems."

Key results highlighted in the report include:

 Revenue jumps: Companies in the industry's established biotech centers (the US, Europe, Canada and Australia) generated revenues of $123 billion, a 24 percent increase from 2013, and a new high. Excluding the unprecedented growth of one industry leader, Gilead Sciences, revenues in 2014 would have increased a healthy 12 percent.

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