Issue Date: January 12, 2004
BIOTECH RIDES A BULL INTO 2004
With a surge in approvals for new drugs from FDA and renewed interest from capital markets, industry watchers say biotechnology made a solid comeback in 2003 and has plenty of momentum going forward.
According to the Biotechnology Industry Organization (BIO), FDA approved 25 new biotech drugs in the past year, an increase of 25% over 2002. FDA also stamped "go" on 12 new indications for previously approved biotech products in 2003. Companies in the sector raised more than $16 billion in new financing in 2003, up 56% from the previous year, according to the trade association.
"The upswing in approvals in part reflects the new energy at FDA under the leadership of Commissioner Mark B. McClellan, who brought a deep commitment to innovation and a sensible risk-benefit analysis to the agency in 2003," says Carl B. Feldbaum, president of BIO.
BIO claimed victories on several legislative fronts last year, according to Feldbaum, including new incentives for the production of biofuels and the defeat of bans on therapeutic applications for cloning.
G. Steven Burrill, CEO of Burrill & Co., a life sciences merchant bank, says 2003 was the sector's second-best year for financing. Burrill's biotech stock index ended the year up 66%. Seven biotechnology firms launched successful initial public offerings last year, and 14 others filed for IPOs with the Securities & Exchange Commission by the end of the year, according to Burrill.
Burrill says that while product approvals and earnings will create near-term value for the sector, more significant value will be generated five to 10 years out. "We'll see all of this technology translating into dramatically more efficient discovery and leading the way down the pathway to personalized medicine," he says.
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