EY 2014 Biotechnology

EY Biotechnology report

“In this capital-constrained environment, we can no longer afford inefficiency and duplication in drug R&D. The industry needs to remove duplication, encourage pre-competitive collaboration, pool data and let researchers learn in real timeGlen Giovannetti, EY Global Biotechnology Leader

Welcome to the 26th annual issue of Beyond borders, our annual report on the global biotechnology industry.

Our analysis of trends across the leading centers of biotech activity reveals both signs of hope and causes for concern. The financial performance of publicly traded companies is more robust than at any time since the onset of the global financial crisis, with the industry returning to double-digit revenue growth.

Companies that had made drastic cuts in R&D spending in the aftermath of the crisis are now making substantial increases in their pipeline development efforts.

But even as things are heading back to normal on the financial performance front, the financing situation remains mired in the "new normal" we have been describing for the last few years. While the biotech industry raised more capital in 2011 than at any time since the genomics bubble of 2000, this increase was driven entirely by large debt financings by the industry's commercial leaders.

The money flowing to the vast majority of smaller firms, including pre-commercial, R&D-phase companies — a measure we refer to as "innovation capital" — has remained flat for the last several years.

As such, the question we have posed for the last two years is more relevant than ever: how can biotech innovation be sustained during a time of serious resource constraints? In this year's Point of view article, we offer a perspective that addresses not just the challenges in the changing health care ecosystem but also the latent opportunities.

The paradigm we present — the holistic open learning network, or HOLNet — takes advantage of health care's move to an outcomes-focused, patient-centric, data-driven future.

Glen T. Giovannetti
Global Biotechnology Leader
Gautam Jaggi
Managing Editor, Beyond borders

HOLNets could fundamentally change how R&D is funded and conducted, by bringing together a diverse range of participants, encouraging the pooling of precompetitive data and permitting researchers to learn from each others' insights and missteps.

These are timely topics, and we look forward to exploring them with you — and helping each other learn in real time — through our Global Life Sciences Blog and other social media venues.

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