industry's historical compound annual growth rate.
-- The global industry's net loss decreased from US$7.4 billion in 2006 to
US$2.7 billion in 2007. In the US, the industry came closer to
aggregate profitability than in any previous year.
-- Deal making reached new heights in 2007. In the US, the total potential
value of deals announced during the year -- including mergers,
acquisitions and strategic alliances -- was close to US$60 billion,
outdistancing all other years by a wide margin. In Europe, the total
potential value of such deals skyrocketed to about US$34 billion.
Commenting on the state of the European biotech sector, Juerg Zuercher, Ernst & Young's Biotechnology Leader for Switzerland and Central Europe said, "Today's European biotech industry is vastly stronger than it was just a few short years ago, with firms able to draw strategic buyers in droves and achieving remarkable growth in deal values, thanks to their maturing pipelines and rise in product approvals. As the industry faces a more difficult financing environment ahead, it will need to build on its enduring strength by translating its maturing pipeline into marketed products over the next couple of years."
While industry performance was strong on several fronts in 2007,
emerging challenges have made the road ahead more difficult for many
biotech companies. In the US, product approvals slowed, as safety concerns
related to new and already approved products increased, and the US Food and
Drug Administration (FDA) faced resource constraints. In the UK, growing
pricing pressures brought the first-ever agreement by a company to refund a
payor for the cost of treating patients that do not respond to its
medication. In China, safety issues prompted a determined regulatory
response. Meanwhile, the industry faces more stringent enforcement of
numerous regulations -- from sales and marketing rules to
|SOURCE Ernst & Young|
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