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Record-Breaking Valuations and Surging Share Prices Drive Strong Pharma and Biotech Sector Performance in 2013
The sustainability of sky-high valuations will be the biggest question for 2014, according to EP Vantage’s new report, “Pharma and Biotech 2013 in Review”
LONDON, BOSTON, TOKYO (March 11, 2014) — The cautious optimism of 2012 turned into a fully fledged biotech boom in 2013, marked by surging company valuations in the US and the opening of the IPO floodgates. The pharma and biotech sector also saw an increase in M&A deal values, buoyant licensing activity and sustained venture capital investment last year, according to EP Vantage’s latest report, “Pharma & Biotech 2013 in Review”.
The record-breaking value of new drug approvals was another notable story last year. Although the number of novel medicines to reach the market dipped on 2012, the class of 2013 is forecast to generate $25.4bn in their fifth year on the market - the best performance of the last decade.
“At the beginning of 2013 many questioned whether the rally in share prices would be sustained - the astonishing growth rates firmly answered that question. Last year, the US public markets painted a picture of rude health for life science companies, from the smallest biotech to the largest drug maker,” says Amy Brown, EP Vantage’s news editor and author of the report. “With 2014 shaping up to tell some strong stories of its own, many believe the biotech sector will be able to retain its allure for the time being."
As EP Vantage reported last month, considerably fewer blockbuster drug launches in 2014 could serve as a signal that last year’s record R&D productivity will be hard to repeat, and remind investors of the ups and downs of drug development.
Among the report's key findings:
- The Nasdaq Biotechnology Index ended the year 66 percent higher and well above its previous peak hit during the genomics bubble of 2000.
- Combined fifth-year projected sales for drugs approved in 2013 are forecast to reach $25.4bn, the highest in the last decade by a wide margin, and 50 percent more than 2012’s 43 new drugs.
- Of the 33 drugs approved in 2013, eight are forecast to become blockbusters by 2018. Gilead’s hepatitis C pill, Sovaldi, Biogen Idec’s oral MS therapy, Tecfidera, and Roche’s antibody-drug conjugate, Kadcyla, lead the pack with multi-billion dollar sales potential.
- The average price paid in M&A deals reached $708m last year, the highest since pre-crash levels, while the average sales multiple paid climbed for the third year in a row.
- Venture capital investments in companies developing human therapeutics stabilized on 2012 at $4.5bn, an encouraging signal from the end of the sector that was hit hard by the fallout of the banking crisis. However the sum is being shared among fewer companies, with the biggest rounds taking an ever-bigger share of the pot.
EP Vantage also reported on the medtech sector’s disappointing 2013, in the “Medtech 2013 in Review” report released today. When compared to the astonishing growth of the pharma and biotech sectors, it’s clear that the medtech sector has a lot of catching up to do.
The “Pharma & Biotech 2013 in Review” report, based on market intelligence and analysis from EvaluatePharma, can be downloaded at www.evaluategroup.com/PharmaandBiotech2013inReview. The “Medtech 2013 in Review” report can be downloaded at www.evaluategroup.com/MedTech2013inReview.
About EP Vantage
Written by a team of award-winning journalists, EP Vantage provides daily financial analysis of key industry catalysts including: regulatory and patent decisions, marketing approvals, licensing deals, and M&A – giving fresh angles and insight to both current and future industry triggers. Launched in 2007 by EvaluatePharma®, EP Vantage’s unique access to EvaluatePharma and EvaluateMedTech data allows unrivalled, forward-looking coverage of the pharmaceutical, biotech and medtech industries. Visit www.epvantage.com to sign up for a free trial. On Twitter: @epvantage .
About Evaluate Ltd.
Evaluate is the trusted source for life science market intelligence and analysis with exclusive consensus forecasts to 2018. We support life science and healthcare companies, financial institutions, consultancies and service providers in their strategic decision-making. Our services include EvaluatePharma, EvaluateClinical Trials and EvaluateMedTech. Our global team of dedicated healthcare analysts employs rigorous methodologies to deliver strategic commercial analysis. We make our services valuable by combining superior quality content, user-friendly reporting tools and outstanding customer service to solve client problems.
For more information visit: www.evaluategroup.com. On Twitter: @evaluatepharma, @evaluatemedtech, @epclinicaltrial, @epvantage.
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