Senior executives expect biotech & pharmaceutical companies to converge
'The distinction between biotech and pharmaceutical firms will erode over the next decade': so says a white paper released by the Life Sciences and Health Care practice at Deloitte.
'The distinction between biotech and pharmaceutical firms will erode over the next decade': so says a white paper released by the Life Sciences and Health Care practice at Deloitte.
The report, entitled 'The future of the life sciences industries', which was developed in collaboration with the Economist Intelligence Unit and combined three research initiatives - an online survey completed by 206 senior industry executives from around the world; in-depth interviews with executives; and an executive forum that brought leaders together to discuss survey and interview results - predicts that biotech and medical device firms will experience faster growth than their pharmaceutical counterparts. The most rapid growth is predicted in Asian markets, where revenue is expected to exceed 15% annually over the next decade, outpacing the 10% or less foreseen in the US, Japan, and Western Europe.
Biotech revenue is expected to grow in excess of 15% annually over the next ten years, compared to less than 10% growth for pharmaceuticals, and industry executives expect innovation to be a major factor, with small, young biotech companies envisaged as the future leaders.
Growing business pressure is forecast to speed up consolidation and pharma-biotech convergence, while pressure from consumers and governments to slow the growth of health care costs will drive structural changes in the industry, forcing established firms to face strong competition from emerging markets where companies are expected evolve from outsourcers and generic drug producers.
One third of those surveyed see the recent decline in the industries' reputation as a matter of great concern that will affect long-term revenue growth, with more government regulation being feared as a consequence.
'Firms can no longer rely on internal resources to achieve their objectives: they must establish a new ecosystem through acquisitions, mergers, alliances, and exploratory relationships in emerging markets,' said Stuart Henderson, life sciences partner at Deloitte. 'Companies positioned to sustain strong revenue growth and exceed shareholder expectations in the coming years will be those that harness both the innovative culture typical to biotech companies, and the operating capabilities and management processes more characteristic of pharmaceutical firms.'