Focusing on Bio-Tech and Pharma Companies

The global economic outlook appears uncertain as the most severe recession in the U.S. since World War II continues to linger, but prospects for the pharmaceutical industry may remain brighter. The prevalence of various diseases in key therapeutic areas such as; oncology, immunology, infectious diseases, cardiology, etc., growing healthcare needs and an aging population are factors that ensure a steady growth for the industry. So, even in a lean and unpredictable economy, with major mergers & acquisitions (M&A), the global pharmaceutical business is expected to stay resilient as these companies tighten their business and operating costs.

Source: www.fillers.com

Pharmaceutical companies strive to maximize their return on invested capital. Today’s costs for the entire value chain for a new drug molecule (research, development, clinical trials, and commercialization) ranges from $800 million to $1 billion.

Thus, their most effective approach is to determine whether the margins on any drug justify the use of the company’s manufacturing facilities.