The US and European global biotechnology clusters set new records in key financial barometers such as revenue, net income, financing and deal making. However, growth slowed in many of these indicators, followed by a swift erosion of public investor interest, pointing to future challenges.

2015 highlights from key financial barometers:

  • US and Europe-based biotechs delivered a record US$132.7b in revenue, up 13% over 2014, but less than the 18% increase in 2014.
  • Research and development (R&D) spending soared to US$40.1b, increasing 16% in 2015 and outpacing the sector’s revenue growth.
  • M&A activity climbed to new records in both potential value and volume.
  • Big biotechs flexed their deal-making musclesas thepotential value of strategic alliances reached a record US$55.4b.
  • Alliance partners paid more up-front and used more equity, suggesting deal structures that are profit-and-loss-sparing are increasingly important.
  • Biotechs’ financial reservoirs are full as they raised nearly US$71b due partly to record setting venture capital financing.
  • Market capitalization growth weakended to just 5%, far below the 65% and 34% growth rates seen in 2013 and 2014 respectively.

Year in review: the 5 key trends from 2015

1. Capital: the view from the top?

2. Demonstrating value

3. New payment models

4. The “cures” are coming

5. The maturation of biotech

Read more on these chapters from Beyond Borders 2016: Returning to Earth

Guest articles from Beyond Borders 2016: Returning to Earth:

  • Winning in the new digital landscape by Francoise Simon, Mount Sinai School of Medicine and Columbia University
  • The myth of “the payer” by Roger Longman, Real Endpoints
  • It’s time for biopharma to embrace risk sharing by Michael Sherman, Harvard Pilgrim Health Care
  • To create value, put the right assets in the right hands by James Mullen, Patheon
  • Partnering with pharma to bring innovations to market by Denise Scots-Knight, Mereo BioPharma Group
  • Winning in immuno-oncology: it takes a portfolio by John Orloff and Stefan Krauss, Baxalta
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