Improving economic conditions, increased availability of funding for research and development, expanding use of biotechnology in agriculture and medical sciences, and favorable government initiatives are expected to drive growth in the biotechnology industry. Developing countries, especially India and China, are emerging as major agricultural and industrial biotechnology markets.
The biotechnology industry was adversely affected by the global financial crisis, with several leading biotechnology companies in the U.S. and Europe reporting fall in revenues amid restricted capital inflows, and project cancellations and delays. The industry however recovered strongly from the crisis with a number of major biotechnology companies registering profits largely due to the adoption of new efficiency and cost-saving measures. Improving economic conditions also led to an increase in funding for the industry, although majority of this capital was raised by a few leading companies. A number of smaller companies continue to face problems in raising funds for research and development purposes. The funding scenario is unlikely to change drastically in the near term future, as venture capitalists continue to adopt cautious approach to ensure risk-free investments.
The global biotech industry is led by the U.S., followed by advanced European countries such as the UK, France, Spain and Germany. Developing countries, especially India and China, are forecast to emerge as major agricultural and industrial biotechnology markets owing to rapid increase in population and income levels. The two countries are emerging as key markets for biotech drugs due to their rich talent pool and low cost of investment. Several biotechnology research centers are expected to be set up in developing regions to address impending problems such as growing need for drought and heat-resistant agricultural crops, clean water and low carbon energy. However, inadequate patent protection remains a major hurdle facing biotech drug makers in developing countries. Nevertheless, the governments of these countries are working towards enhancing their patent protection mechanisms.
Healthcare reform legislation, development of flexible/adaptive clinical trial designs and medical device and pharmaceutical taxes are expected to influence the global biotechnology market. The industry is expected to register healthy growth driven by improving healthcare infrastructure, higher involvement of private companies and developments in information technology. The industry is also expected to witness increase in mergers and acquisitions due to the patent expiration of several blockbuster drugs and introduction of newer healthcare regulations that are aimed at controlling costs. Smaller biotechnology firms would seek to divest their businesses to larger companies or enter into in-licensing collaborations and partnerships with cash-rich large companies owing to limited capital availability. Efficacy and safety regulatory policies, technological developments, human resources, public acceptance, human resources, intellectual property, business models and market structure are also expected to influence growth of biotechnology markets in future.
Biotechnology applications have increased manifold in recent years. Presently agriculture, food, health, medical and environmental sciences are the major end-use sectors. Human health dominates the biotechnology field followed by agriculture and industrial applications. Majority of the biotech investments are directed towards discovery of new drugs and therapies. Cardiology, oncology and inflammation constitute the major focus areas for biotech drug companies. Other therapeutic categories include diabetes, hormone treatment using human growth hormone and follicle stimulating hormones, antiviral antibody, anemia and other human enzymes and catalysts.
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