American Biotech Industry Facts

In Canada, revenues of publicly traded biotech companies decreased 9%, from US $2.2 billion in 2007 to US $2 billion in 2008, mainly due to the acquisitions of four significant Canadian firms — Arius, Aspreva, Axcan and Draxis — by foreign companies. If 2007 revenues were adjusted to exclude those four companies, the industry’s revenues would have increased by 26% instead of falling.

In the Asia-Pacific region, revenues grew by an impressive 25%, led by strong growth in Australia, where the sector benefited from strong sales of CSL’s Gardasil. Indeed, in each region, a few mature companies had a disproportionate impact on top-line growth, highlighting that biotech remains an industry of haves and have-nots.

DEAL ACTIVITY
Deal activity remained strong in 2008, driven both by long-term trends such as big pharma’s need to reinvent itself because of looming patent expirations and by the immediate challenges created by the current funding environment. M&A activity was robust in both the US and Europe. The total value of M&A transactions involving US biotechs was more than US$28.5 billion — a record high not counting megadeals in prior years, such as the 2007 acquisition of MedImmune by AstraZeneca.

Though absent any megadeals in 2008, the US totals were boosted by three large transactions valued at more than US$5 billion each: Millennium Pharmaceuticals’ acquisition by Takeda Pharmaceuticals, ImClone Systems’ purchase by Eli
Lilly, and the acquisition of Applied Biosystems by Invitrogen (since renamed Life Technologies). In Europe, M&A transactions totaled US$5.0 billion (€3.4 billion).

The potential value of strategic alliances involving US biotech companies reached an all-time high of almost US$30 billion, while the potential value of alliances involving European companies was US$13 billion (€8.8 billion).

INDUSTRY FACTS
Biotechnology is responsible for hundreds of medical diagnostic tests that keep the blood supply safe from the AIDS virus and detect other conditions early enough to be successfully treated. Home pregnancy tests are also biotechnology diagnostic products.

Consumers already are enjoying food items grown with the help of biotechnology, such as papayas, soybeans and corn. Hundreds of biopesticides and other agricultural products also are being used to improve our food supply and to reduce our dependence on conventional chemical pesticides.

Environmental biotechnology products make it possible to clean up hazardous waste more efficiently by harnessing pollution-eating microbes without the use of caustic chemicals.

Industrial biotechnology applications have led to cleaner processes that produce less waste and use less energy and water in such industrial sectors as chemicals, pulp and paper, textiles, food, energy, and metals and minerals. For example, most laundry detergents produced in the United States contain biotechnology-based enzymes.

DNA fingerprinting, a biotech process, has dramatically improved criminal investigation and forensic medicine, as well as afforded significant advances in anthropology and wildlife management.

Source: Biotechnology Industry Organization

US BIOTECHNOLOGY AT A GLANCE (US$b)
                Public Companies         Industry Total
                                                   2008        2007    Change        2008        2007    Change
Financial
Product sales                         $54.1         $49.9     8.4%         $57.0       $52.7      8.0%
Revenues                                  66.1         61.0       8.4%          70.1         64.9        8.0%
R&D expense                           25.3         21.0       20.5%        30.4         26.1       16.8%
Net income (loss)                      0.4         (0.1)      -430.7%     (3.7)         (4.2)      -11.2%
Industry  
Market capitalization          $343.8         $369.2     -6.9%         —             —            —
Total financings                         8.6         15.9       -46.3%         13.0         21.4      -39.2%
Number of IPOs                            1          22         -95.5%            1            22         -95.5%
Number of companies            371         395          -6.1%      1,754         1,758     -0.2%
Number of employees     128,200     131,300      -2.4%  190,400     192,600   -1.1%

Source: Ernst& Young

BIOTECHNOLOGY LEADERS IN TOTAL REVENUE IN THE US MARKET (Trailing Twelve Months)
Amgen Inc.                                             $14.6 B
Gilead Sciences, Inc.                            $7.0 B
Genzyme Corporation                           $4.5 B
Biogen Idec Inc.                                      $4.4 B
Life Technologies Corporation            $3.3 B
Celgene Corporation                             $2.7 B
Talecris Biotherapeutics Holding        $1.5 B
Charles River Laboratories Inte           $1.2 B
Qiagen N.V.                                              $1.0 B
Amylin Pharmaceuticals, Inc.               $758.4 M

Source: Yahoo Finance, Marc 2010

KUTU 3
SELECTED 2008 US BIOTECH M&As
Company     Location         Acquired company     Location        Value (US$m)
Takeda         Japan             Millennium         New England         8,800
Life Technologies     San Diego         Applied Biosystems     SF Bay Area         6,700
Eli Lilly         Other (Indiana)         ImClone             New York State         6,500
Kinetic Concepts     Texas             LifeCell             New Jersey         1,700
GlaxoSmithKline     UK             Sirtris             New England         720
ViroPharma     PA/Delaware         Valley    Lev         New York State         618
Hologic         New England         Third Wave Tech.        Midwest             580
J&J         New Jersey         Omrix             New York State         438
Galderma Pharma     Switzerland         CollaGenex         PA/Delaware Valley     420
Ipsen         France             Tercica             SF Bay Area         404
Novartis         Switzerland         Protez             PA/Delaware Valley     400
Teva         Israel             CoGenesys         Mid-Atlantic         400
Valeant         LA/Orange County        Dow Pharmaceutical Sci.    SF Bay Area         277