Politics / Law
Biotechs emerge as important players in 2012
Brussels – Predicting the future is often not more than a guessing game. But two signs recently appeared on the horizon which indicate that the biotechnology industry will play a dominant role in the dynamics of EU economics in 2012 and beyond. The first one is the notion that 85% of net new jobs in the EU between 2002 and 2010 were created by small and medium sized enterprises (SMEs). This means that SMEs with a 67% share in total employment punch considerably above their weight when it comes to creating new jobs. Most biotechs are SMEs. The numbers are the result of a study which looked at the essential contribution of SMEs on job creation between 2002 and 2010 and which was published by the European Commission. The second sign for an active role of biotechnology in the European economy in 2012 was spotted by Bloomberg. The service provider indicates that Europe’s largest drugmakers will invest heavily in acquisitions of biotechnology companies this year. The value of acquisitions announced by Europe’s ten largest pharmaceutical companies plunged to €1.65bn in 2011 from €33.5 billion the year before. But facing a steep patent cliff – there's talk of a whopping EUR16.5bn loss of sales due to patent expirations – the companies will go on a buying spree, Bloomberg predicts. "You can never have enough pipeline", analyst Les Funtleyder told Bloomberg. And biotech companies are cheap right now, some of them trade at only twice the value of their cash reserves alone.