Record venture capital and heated deal environment propel global biotechnology industry forward in 2007

20 May 2008

The global biotechnology industry achieved record levels in financing and deal making in 2007, Ernst & Young's annual report on the trends shaping the biotechnology industry.

The report,Beyond Borders: Global Biotechnology Report 2008, attributes the strong confidence shown by investors and strategic partners in the sector despite the tightening global financial conditions.

''In 2007, investors were drawn to the tremendous value of biotech's innovation, with impressive results, as venture financing and deal making reached unprecedented heights,'' said Glen Giovannetti, Ernst & Young's global biotechnology leader. ''To continue its multi-year track record of progress, the industry must meet the current challenges of cooling public equity markets, greater regulatory scrutiny and higher product approval and reimbursement hurdles with fiscal discipline and the creativity and innovation for which it is known.''

Highlights of the report include:
The global biotechnology industry had a very strong year on the financing front. Companies in the Americas and Europe raised more than $29.9 billion – a new high excluding the outlier genomics bubble year of 2000.

Venture financing reached an all-time high in 2007 with investment totaling about $7.5 billion, fuelled by a record total of $5.5 billion in the US and 72 per cent growth in Canada.

Global public biotechnology company revenue rose by 8 per cent in 2007, crossing the $80 billion threshold for the first time. Absent the acquisition of several leading biotech revenue producers by big pharma, revenue would have increased by about 17 per cent – in line with the industry's historical compound annual growth rate.