A rich new Credit Suisse report, “Global Biotechnology – An Outlook for 2015,” was flush with cool data about trends in the biotech industry. The analysis lists out 10 key themes for 2015. Here’s the highlight reel:
For the past four years, biotech outperformed the S&P500 – indeed, it has been the leading sector and notably, it doesn’t think the IPO and financing window’s going to close anytime soon. CS projects that biotech can still outperform the general market, even if it doesn’t retain the number one position – in part because of the “fundamental shift in large cap biotech’s business model” that’s going on right now.
The industry’s been switching to a “Biotech 2.0” model, described below, that’s trying to create that second generation of blockbusters to overcome losses had thanks to the patent cliff. Any successes seen there is having a ripple effect on small and midcap biotechs.
Drug pricing, however, will be a point of contention moving forward. Because while the same old drugs are being prescribed, the costs are shooting up pretty noticeably. For instance, most of the oral diabetes drugs referenced below have doubled in price; same goes for the drugs that treat asthma, MS and a laundry list of other indications. Best case scenario: This is, again, to make up for the losses forthcoming from the patent cliffs, and perhaps spur on a new generation of innovation – but it just doesn’t look good and will cause some industry friction.
CS’s views on biosimilars are consistent with the general consensus: They’re going to dominate. Or, at least, they’ll become a larger proportion of worldwide sales, as the potential market for biologics and their generic-ish counterparts continues to rapidly expand. By 2016, CS thinks that more than 30 percent of the market will be biologics.
There’s a ton of good stuff in the report; if you’re curious, reach out to Credit Suisse to get your hands on the whole thing. In the meantime, this is a sort of devil’s advocacy approach to whether or not the biotech market will be bullish or bearish:
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
