Bio-Technology; Changing Trends

Based on the prevailing global economic scenario over the last few years, the world of Bio-Technology or (Bio-Tech) is undergoing major changes. As developed countries grapple with massive sovereign debt and private sector debt, emerging markets and developing countries, impacted with lesser debt levels, continue to show promise with focus on improved efficiencies in the overall value chain:

Commercial market fundamentals are being re-examined everywhere. This includes, but not limited to; 1) Supply; 2) Demand; 3) Unmet Gap; 4) Price and income elasticity of wholesale and retail consumers; 5) Existing and planned infrastructure; 6) Large / medium / small industry and competition; 7) Regulatory framework, policy and approvals process; 8) Fiscal and financial policy and incentives and; 9) Alternative market scenarios.

Business fundamentals also require further enhancement such; as 1) Balance Sheet robustness with de-leveraging of debt and increased focus on tangible physical asset base and increased Intellectual Property Rights (IPR)/Licensing; 2) Better Profit & Loss (P&L) management with focus on higher current income, EBITDA margins, net profit margins, and retained earnings and; 3) Maintain positive cashflow with diversified waterfall sources and better managed uses of cash.

Business-Revenue models may require further creative approaches, innovation, and invention to better meet commercial market and business fundamentals. There is an increasing focus on reviving Government-Industry-Academia (GIA) Partnerships in improving the life cycle costs and timelines associated with above overall value chain. In addition, “technology parks” are sprouting with focus on incubator, start-up and early stage companies. These in turn are attracting private equity and venture capital along with “non-profit” investors. In addition, Bio-Tech companies are forming strategic partnerships and alliances with conventional pharmaceutical companies.

In recent years, a critical link between Bio-Tech and Bio-Fuels has been established. Additional extensive work must be carried out with respect to further enhancing the overall value chain as well as improved processes coupled with environmental considerations.

All of the above are positive signs. However, key focus and top priority must always remain in improving overall value chain and delivering life saving molecules and products to the consumer in a safe and cost effective manner.