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Biopharmaceutical Industry Poised for Change in 21st Century, Report Claims

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WALTHAM, Mass.--A new report by the consulting firm Decision Resources here claims genomics is a key driving force behind a "significant realignment" that is now occurring in the biopharmaceutical industry. The changes are characterized by major pharmaceutical companies moving aggressively to acquire new technologies, both through strategic alliances with genomics companies and by bringing the technologies in-house, the study observed.

Titled "The Biopharmaceutical Industry in Transition: Prospects for Growth," the report warns, "Big pharma's moves to wrest biopharmaceutical technologies away from the milieu of smaller biopharmaceutical companies may threaten the structure of the industry beyond 2006, allowing only larger companies to survive." Meanwhile, there is a countertrend of biopharmaceutical company mergers, acquisitions, joint ventures, and other collaborations. "These small company actions appear to be stabilizing the industry and assisting the weaker companies in popularizing good technology that has been poorly backed or addressed," according to the study.

Currently the preferred method for small-company funding is through alliances and collaborations within the industry, the report said, with private placements taking a back seat. Initial public offerings of stock are also gaining popularity, particularly as biopharmaceutical stocks become less volatile.

The study predicted that the world market for biopharmaceutical products--defined as drugs whose discovery and development were based on biological, rather than chemical, data--will grow from $11.1 billion in 1996, with the US accounting for nearly half of sales, to $16.1 billion in 2006. "The industry will advance during this time but will not completely mature," it contended.

Despite prospects for change, the report argued that the biopharmaceutical industry "is enjoying an unprecedented level of credibility and stability," in part because of the maturation of key technologies such as genomics, which it called "the technology likely to have the greatest impact on biopharmaceuticals in both the short and long run."

The report is available for $2,750. For further information, contact [email protected].

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