Beyond Borders: Global Biotechnology Report 2011

Overview

Sustaining innovation: the global perspective.

Given the all-encompassing nature of the global financial crisis - and the capital intensive character of drug R&D - it is not surprising that the last two issues of Beyond Borders dwelt extensively on the downturn and the pressure it placed on biotech's business model. In our Introduction articles, as well as throughout much of the reports, we catalogued the measures companies were taking and highlighted new approaches and models that were already starting to emerge - from project-based venture funding to fail-fast R&D programs to increasingly virtual organisations. And we also raised concerns about the impact on the industry's business model, as the crisis took a severe toll on funding (the model's key input) and placed innovation (its key output) under growing strain.

As we write this year's Introduction article - the third since the crisis hit in the fall of 2008 - the global economy is clearly on the mend. Across most of the West, GDP has been growing steadily though job growth in many countries has not been as robust. Stock markets have roared back (an occasional flash crash notwithstanding) from the depths they plummeted to in late 2008, no doubt benefitting from the efforts of central bankers to keep interest rates low. Venture capital funding has rebounded somewhat, growing by 20pc during 2010 in the US alone, where the superheated interest in funding social media and Web 2.0 companies has even led to concerns about whether we may be fuelling another dotcom bubble. And emerging markets such as China and India, where the crisis barely registered a blip in the first place, continue to grow at a brisk pace.

However, as we survey the biotech industry a year later, it is clear that the pressures on the industry's business model have only increased.