Navigation Links
Frost & Sullivan: Pharma and Biotech Industries Headed Toward an Era of Reduced Profit Margins
Date:5/2/2013

MOUNTAIN VIEW, Calif., May 2, 2013 /PRNewswire/ -- In the face of reduced profit margins for the pharmaceutical and biotechnology sectors, an effective financial management strategy is central to maintain sustainable growth.

New analysis from Frost & Sullivan's (http://www.financialservices.frost.com) Financial Assessment of the Global Pharmaceutical and Biotechnology Industry research evaluates the financials of public companies in the global pharmaceutical and biotechnology industries, and ranks organizations based on their financial and risk management.  This offers a comprehensive ratio analysis that includes profitability, activity (turnover), liquidity and solvency. The research identifies key trends and challenges that can impact the performance of industry participants over the next 12 months.

For more information on this research, please email Britni Myers , Corporate Communications, at britni.myers@frost.com with your full name, company name, title, telephone number, company email address, company website, city, state and country.

The main reasons attributed to declining profitability in the pharmaceutical and biotechnology industries are expiring patents, delayed approvals, the advent of generic versions of drugs, measures to contain healthcare spending, and the increasing number of participants in the same profit pool. A restricted environment for new product entry, rising prices, and lower acceptance of products in newer therapeutic areas will further squeeze profit margins in the long term.

"Companies with a diverse portfolio of drugs saw higher profitability in the pharmaceutical industry," noted Frost & Sullivan Financial Analyst Dr. E. Saneesh. "The long timelines and accumulating expenditures incurred before a drug is commercialized is making the biotechnology industry less profitable in recent years, even resulting in negative margins for companies that are smaller in terms of revenue."

The pharmaceutical industry has generally witnessed smaller margins due to increasing competition from generics, pricing pressures, and decreasing healthcare spending. In the biotechnology industry, companies within a low revenue range and with relatively new products witnessed negative margins because of the heavy investment in R&D, as well as selling, general and administrative expenses (SG&A).

In both industries, companies with lower revenue had poor turnover ratios because of the huge investments made in assets and product development. In terms of cash reserve, smaller pharmaceutical companies, as well as large and small biotechnology companies, showed an increase in their cash reserve as a percentage of their assets.

Further, the pharmaceutical and biotechnology sectors did not witness a great variation in the R&D-to-sales ratio in recent years. Despite a general decline in overall sales in both industries, R&D expenses have not considerably reduced.

"All these trends highlight the difficult times the pharmaceutical and biotechnology industries are going through," concluded Dr. Saneesh. "To create sustainable growth, companies must undertake systematic and effective financial management strategies."

Financial Assessment of the Global Pharmaceutical and Biotechnology Industry is part of the Business and Financial Services Growth Partnership Service subscription. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

Frost & Sullivan's Business and Financial Services group serves clients around the world in all aspects of financial analysis, market research and monitoring, due diligence, idea generation, opportunity analysis, investment valuation, and other proprietary research.

Connect with Frost & Sullivan on social media, including Twitter, Facebook, SlideShare, and LinkedIn, for the latest news and updates.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.

Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

  • The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
  • The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

Contact Us:     Start the discussion

Join Us:           Join our community

Subscribe:       Newsletter on "the next big thing"

Register:         Gain access to visionary innovation

Financial Assessment of the Global Pharmaceutical and Biotechnology Industry
NBB7-F1

Contact:
Britni Myers
Corporate Communications – North America
P: 210.477.8481
F: 210.348.1003
E: britni.myers@frost.com 
Twitter: @Frost_Sullivan
Facebook: Frost & Sullivan

http://www.frost.com


'/>"/>
SOURCE Frost & Sullivan
Copyright©2012 PR Newswire.
All rights reserved

Related medicine technology :

1. Almost 50 Percent of the Glaucoma Patient Population Remains Untreated, Signifying a Vast Market for Glaucoma Pharmaceuticals, Finds Frost & Sullivan
2. Frost & Sullivan: High Uptake of New Drug Therapies and Aging Population Expansion Keep the U.S. Retinal Therapeutics Market Buoyant
3. European Thrombosis Therapeutics Market is Experiencing an Urgent Need for Enhanced Products, Says Frost & Sullivan
4. Frost & Sullivan Research Preview: Top 20 Telehealth Markets
5. Heightened Awareness, Coupled with Expanding Patient Pool, Stimulates Sleep Apnea Diagnostics and Sleep Services Market, Says Frost & Sullivan
6. Frost & Sullivan Recognizes Labcyte for its Commitment to Innovation and Addressing Unmet Needs in the Liquid Handling Market
7. MicroRNA Research to Trigger Tremendous Growth in Related Tools Market, Says Frost & Sullivan
8. Frost & Sullivan: Developing Integration Capabilities Presents a Real Opportunity for Vendors in the European CIS Market
9. Frost & Sullivan: Expanding Sample Prep Market Supports Growth Trends in Molecular Diagnostics Markets
10. Electronic Medical Records Progress from an Enterprise-Centric Solution to a Customer-Specific Application, Finds Frost & Sullivan
11. Frost & Sullivan to Host Complimentary Web Conference: Concerns and Solutions for the Anaesthesia Equipment and Associated Peripherals Market
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/24/2016)... 2016 According to a new ... Pen Needles, Safety Pen Needles), Needle Length (4mm, 5mm, ... Mode of Purchase (Retail, Non-Retail) - Trends & Global ... the market for the forecast period of 2016 to ... Billion by 2021 from USD 1.65 Billion in 2016, ...
(Date:6/24/2016)... , Belgium , June ... MKT: VNRX), today announced the appointment of Dr. ... of Directors as a Non-Executive Director, effective June ... Company,s Audit, Compensation and Nominations and Governance Committees.  ... Dr. Futcher will provide independent expertise and strategic ...
(Date:6/23/2016)...  MedSource announced today that it has selected ... of choice.  This latest decision demonstrates MedSource,s commitment ... clients by offering a state-of-the-art electronic data capture ... as the EDC platform of choice in exchange ... has long been a preferred EDC platform by ...
Breaking Medicine Technology:
(Date:6/26/2016)... ... , ... PawPaws brand pet supplements owned by Whole Health Supply ... health of felines. The formula is all-natural and is made from Chinese herbs that ... Cat Kidney Support Supplement Soft Chews are Astragalus Root Extract and Rehmannia Root ...
(Date:6/25/2016)... ... June 25, 2016 , ... Austin residents seeking Mohs surgery services, can ... Surgery and to Dr. Russell Peckham for medical and surgical dermatology. , Dr. Dorsey ... cancer. The selective fellowship in Mohs Micrographic Surgery completed by Dr. Dorsey was under ...
(Date:6/25/2016)... (PRWEB) , ... June 25, 2016 , ... As a ... Magna Cum Laude and his M.D from the David Geffen School of Medicine at ... returned to Los Angeles to complete his fellowship in hematology/oncology at the UCLA-Olive View-Cedars ...
(Date:6/24/2016)... CA (PRWEB) , ... June 24, 2016 , ... A ... procedures that most people are unfamiliar with. The article goes on to state that ... but also many of these less common operations such as calf and cheek reduction. ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... ... Conference and Scientific Sessions in Dallas that it will receive two significant new ... the grants came as PHA marked its 25th anniversary by recognizing patients, medical ...
Breaking Medicine News(10 mins):