U.S. BIOTECHNOLOGY MARKET - Business Sweden · PDF file · 2016-09-19global...

CONFIDENTIAL

FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY

U.S. BIOTECHNOLOGY

MARKET

Business Sweden in the USA

April 2015

Pharmaceuticals and drugs

Diagnostic testing

Dietary supplements

Cosmetics

Johnson & Johnson

Pfizer, Merck, Abbott, BD,

Procter & Gamble, Avon

BUSINESS SWEDEN 7 AUGUST, 2015 2

BIOTECHNOLOGY SOLUTIONS ARE GENERALLY USED IN

HEALTHCARE, FOOD, AND INDUSTRIAL APPLICATIONS

SOURCE: BIOTECHNOLOGY INDUSTRY ORGANIZATION

The BIOTECHNOLOGY industry comprises the institutions and companies engaged in the research,

development and marketing of varied products and solutions derived from living organisms and systems

Health

Herbicides, fungicides and

pesticides

Animal and livestock medicine

Genetically-modified crops

Food and Agriculture

Industrial enzymes

Biofuels

Chemicals

Waste treatment and disposal

Industrial

Examples of

U.S. firms

Examples of

applications

ADM, Cargill, Monsanto,

Zoetis, Dow AgroSciences

DuPont, Chevron, Renewable

Energy Group (REG), 3M

SWEDISH BIOTECHOLOGY IS MOST FOCUSED ON THE HEALTH MARKET, PARTICULARLY PHARMACEUTICALS AND DIAGNOSTICS

USA 30%

Europe 18%

China 14%

Japan 10%

Canada 2%

Rest of World 26%

GLOBAL BIOTECHNOLOGY MARKET SHARE

REVENUE PERCENTAGE, 2016 FORECAST

THE U.S. BIOTECH MARKET BY THE NUMBERS

7 AUGUST, 2015 BUSINESS SWEDEN 3

THE U.S. BIOTECHNOLOGY INDUSTRY ACCOUNTS FOR

NEARLY ONE-THIRD OF THE GLOBAL MARKET

SOURCE: IMS HEALTH CANADA, BIOTECHNOLOGY INDUSTRY ASSOCIATION (BIO), ERNST & YOUNG

Total number of public and private

biotechnology companies in the U.S. 2,349

Total number of bioscience-related

patents registered in the U.S. in 2013 24,939

Total amount of capital funding raised

by both U.S. public and private

biotechnology companies in 2013 25.3 BUSD

Total amount of academic spending in

the U.S. on biotech research and

development in 2012 38.1 BUSD

Average annual salary of workers in

the U.S. biotechnology industry –

nearly double the average U.S. wage 88 KUSD

SWEDEN'S BIOTECH INDUSTRY IS ESTIMED TO BE LESS THAN 3% THE SIZE OF THE U.S. BIOTECH INDUSTRY

PHARMACEUTICAL COMPANIES DOMINATE BIOTECH RESEARCH SPENDING

PHARMA IS THE LARGEST TARGET FOR R&D FUNDS TOP COMMERCIAL BIOTECH R&D SPENDERS

BUSD, 2014

0 2 4 6 8 10

AbbVie

Celgene

Gilead Sciences

Takeda

Amgen

Bristol-Myers Squibb

Eli Lilly

GlaxoSmithKline

Sanofi

AstraZeneca

Merck

Pfizer

Johnson & Johnson

Novartis

Roche


THE U.S LEADS IN BIOTECHNOLOGY R&D INVESTMENTS

SOURCES: GENETIC ENGINEERING & BIOTECHNOLOGY NEWS (GEN); PHARMACEUTICAL RESEARCH AND

MANUFACTURERS OF AMERICA, BIOTECHNOLOGY INDUSTRY ASSOCIATION

Pharmaceuticals and surgical and medical devices were

the leading patent classes for the U.S. biotech industry

from 2009 to 2013

Between 2009 and 2013, U.S. agricultural- and

industrial-related discoveries accounted for less than

10% of all biotechnology patents in the U.S.

The development process for pharmaceuticals is both

expensive and complex, taking an average of 10 to 15

years from initial discovery to final product introduction

The average R&D cost (not including marketing) to bring

a drug to market is 1.2 BUSD, with costs rising annually

Each new medicine brought to market in the U.S. is

typically tested on more than 1,000 volunteers before it is

approved by the Food & Drug Administration (FDA)

U.S.-based firms Non-U.S.-based firms

TOTAL COMMERCIAL BIOTECH R&D EXPENDITURES

BUSD, 2011 – 2014


U.S. COMMERCIAL BIOTECHNOLOGY RESEARCH AND

DEVELOPMENT IS GROWING AT A STEADY RATE

SOURCE: ERNST & YOUNG, BATTELLE BIO

*TOP 10 STATES LISTED IN ORDER OF TOTAL ACADEMIC BIOSCIENCE EXPENDITURES: CALIFORNIA, NEW

YORK, TEXAS, PENNSYLVANIA, NORTH CAROLINA, MARYLAND, ILLINOIS, MASSACHUSETTS, OHIO, FLORIDA

0

5

10

15

20

25

30

2009 2010 2011 2012 2013 2014f 2015f

U.S. Europe

U.S. COMMERCIAL R&D EXPENDITURES ARE NEARLY 5 TIMES HIGHER THAN EUROPEAN BUDGETS

Universities

Bioscience R&D expenditures at colleges

and universities in 10 U.S. states* totaled

22.5 BUSD, with academic institutions in

California alone spending 5.1 BUSD

Startups

Since 2004, oncology and neurology

startups attracted the largest amount of

investment among biotech startups

Corporations

The largest biotech companies in the U.S.

increased their R&D spending by 20% from

2013 to 2014

0 1,000 2,000

Los Angeles

Washington, DC

North Carolina

Chicago

Seattle

Philadelphia

New York

San Diego

San Francisco

Boston

National Institutes of Health grants Venture capital funding

TWO SOURCES HELP SPUR BIOTECH INNOVATION BIOTECHNOLOGY FUNDING BY REGION

MUSD, 2014


NIH GRANTS AND VENTURE CAPITAL FUND BIOTECH

R&D; BOSTON IS THE TOP RECIPIENT OF BOTH

SOURCES: GENETIC ENGINEERING & BIOTECHNOLOGY NEWS (GEN), NATIONAL INSTITUTES OF HEALTH,

FIERCE BIOTECH

The National Institutes of Health (NIH),

a public agency based outside of

Washington, DC, is a leading source of

research funding in the U.S.

NIH grants totaled 22 BUSD in 2013,

with most allocated to academic labs

National

Institutes

of Health

Venture capital funds specialize in

commercializing and “scaling up” the

research done in labs

Examples of major biotech-focused

venture capital funds include

HealthCare Ventures and MPM Capital

Venture

Capital

Funds

NIH GRANTS SIGNAL ACADEMIC R&D CLOUT, WHILE VC FUNDS SHOW THE STRENGTH OF STARTUP ENVIRONMENTS

STATES LEADING IN BIOTECH PATENT FILINGS*

2009 – 2013

EMPLOYMENT CLUSTERS VARY BY SPECIALIZATION


BIOTECHNOLOGY INNOVATION IN THE U.S. IS

CLUSTERED, DEPENDING UPON FUNCTIONAL AREAS

SOURCES: HARVARD BUSINESS SCHOOL CLUSTER MAPPING, BIOTECHNOLOGY INDUSTRY ORGANIZATION

(BIO), COMPANY WEBSITES, FORBES

• Chicago‡

• Memphis

• Houston

• Tampa

• Indianapolis

Agriculture

• New York/New Jersey

• Los Angeles

• Chicago

• Miami

• Dallas

Bioscience-

Distribution


• Chicago

• San Francisco Bay Area†

• Philadelphia

• Los Angeles

Drugs and

Pharma

• Boston


• San Francisco Bay Area†

• Philadelphia

• Los Angeles

General

Testing and

Research

NOTES: *MULTIPLE STATES TIED; †INCLUDES SAN JOSE AREA; ‡INCLUDES DECATUR/CENTRAL ILLINOIS

Top 5 across patent classes 11-15th across patent classes

6-10th across patent classes 16-20th across patent classes

Midwest Abbott, AbbVie, ADM,

Medtronic, Eli Lilly,

Baxter, Proctor & Gamble

California Amgen, Genentech,

Gilead, Theranos

Northeast Pfizer, Merck,

Johnson &

Johnson,

Celgene, IBM,

Biogen Idec

ACADEMICS, SUPPORTED BY PUBLIC GRANTS, CONDUCT INITIAL RESEARCH INTO NEW APPLICATIONS


UNIVERSITIES AND RESEARCH INSTITUTIONS PLAY A

KEY ROLE IN THE BIOTECHNOLOGY VALUE CHAIN

SOURCES: FOUNDATION CENTER, FDA, MASSACHUSETTS BIOTECHNOLOGY COUNCIL (MASSBIO)

ACADEMIC RESEARCH TECHNOLOGY TRANSER DEVELOPMENT, APPROVAL,

COMMERCIALIZATION

Public funding sources include:

National Institutes of Health (NIH)

National Science Foundation (NSF)

Department of Defense (DoD)

Private foundations, including the

following, also support research:

Charitable organizations, like the

Alfred P. Sloan Foundation

Various corporate foundations, like

the Intel Foundation

Determining commercial viability:

University Technology Transfer or

Research Policy divisions

Incubators and accelerators, both

for-profit and nonprofit

Municipality- or state-owned

economic development authorities

R&D departments of corporations

Venture and seed capital firms or

angel investor groups

Stakeholders help reach the market:

Lenders or investors, primarily banks,

but also venture capital, angel

investors and private equity firms

Reimbursement and clinical trials

consulting experts

Administrative resources, including

insurance agencies, attorneys,

accounting firms and recruiting firms

FDA, often through its Center for Drug

Evaluation and Research

PAIRING WITH A U.S. UNIVERSITY OFFERS FIRMS ACCESS TO LEADING RESEARCHERS AND FUNDING SOURCES

BIOTECHNOLOGY PRODUCTS MAY REQUIRE FDA APPROVAL BEFORE BEING SOLD IN THE U.S.


FDA APPROVAL IS A MAJOR HURDLE, AND BIOTECH

PRODUCTS ARE OFTEN THE MOST COMPLEX CASES

SOURCE: FDA, BUSINESS SWEDEN INTERVIEWS

FDA APPROVAL, WHILE NECESSARY TO SELL A PRODUCT, DOES NOT RELIEVE COMPANIES FROM LIABILITY

• Cosmetics, natural and herbal

formulas, dietary supplements

and Class I medical devices

• Over-the-counter drugs,

veterinary drugs, Class II medical

devices such as clinical

laboratory tests

Co

mp

lex

ity

• Prescription drugs, Class III

medical devices such as surgical

instruments and artificial implants

High-Complexity

Products

Mid-Complexity

Products

Low-Complexity

Products FDA approval

not required*

FDA approval

required

Timeline for

approval(s)

2 – 10 years

Timeline for

approval(s)

6 months – 2

years

No approval

required*

NOTE: FDA APPROVALS MAY BE REQUIRED IF THE MANUFACTURER MAKES CERTAIN HEALTH CLAIMS

Defective design

Example: Cough syrup caused heart attacks because

of its normal ingredients

Defective manufacturing

Example: A tainted batch of cough syrup containing a

poisonous substance

Defective labels or warnings

Example: A cough syrup does not include on its label

a warning that it may cause dangerous side effects if

taken in combination with another drug that is

commonly taken, or ingredients are not correctly listed

LAWSUITS ARISE FOR ONE OF THREE REASONS BUT RESOURCES EXIST TO PROTECT COMPANIES


LEGAL COMPLIANCE AND LIABILITY ISSUES ARE ALSO

HURDLES, SO PROFESSIONAL GUIDANCE IS NECESSARY

SOURCE: FDA, BUSINESS SWEDEN INTERVIEWS

“Companies must get product liability insurance in the U.S. It also

limits the fear of being sued later on. I would advise Swedish

clients to first look into their current policy in Sweden and see

whether they can extend it to the U.S. market”

Senior Vice President, Partner

San Francisco-based insurance company

Insurance Agencies

“If you take appropriate measures, the risk of a lawsuit can be

minimized. The risk didn’t deter us from entering the U.S. My best

tip is to have clear contracts done by lawyers. Since we mainly

use partners in the U.S., we’ve managed to transfer some of the

liability to them”

Export Manager

Swedish pharmaceutical company

Attorneys

CONTRACTS, INSURANCE, AND PROPER LEGAL GUIDANCE CAN DRAMATICALLY MINIMIZE RISKS

SWEDEN’S LIFE SCIENCE INDUSTRY

PERCENTAGE, BASED ON TOTAL EMPLOYEES

SWEDEN IS STRONGEST IN DRUGS, DEVICES


SWEDISH BIOTECH IS DIVERSIFIED, BUT DEVICE AND

PHARMACEUTICAL COMPANIES ARE MOST PROMINENT

SOURCES: VINNOVA, OECD

Drugs and Pharma

44%

General biotech*

15%

CRO 3%

Devices and facilities products

32%

Other* 6%

NOTE: *GENERAL BIOTECH INCLUDES DIAGNOSTICS, GENERAL RESEARCH AND DEVELOPMENT, TOOLS

AND BIOPRODUCTION; OTHER INCLUDES AGRICULTURAL, FOOD AND INDUSTRIAL BIOTECH PROJECTS

Strengths

Nearly half of Swedish healthcare and life sciences

employees work in pharmaceuticals

This includes discovery, development, production,

delivery and related activities

Another one-third of Swedish employees in the industry

focus on devices and products for healthcare facilities

Weaknesses

Agricultural- and industrial-related projects together

account for less than 6% of all Swedish employment in

the biotechnology industry

Swedish start-ups lack sufficient access to early-stage

financing, including venture capital, particularly

compared to North American industry peers

CONSOLIDATION WITH FOREIGN COMPANIES CONTINUES TO SHAPE THE SWEDISH BIOTECH SCENE

Pharmaceuticals and medical devices are Sweden’s

leading areas of expertise within biotechnology, and each

segment corresponds to different U.S. geographic clusters:

RESEARCH AREAS WITH INCREASES IN VC FUNDING*


THERE ARE MANY OPPORTUNITIES IN THE U.S. FOR A

VARIETY OF SWEDISH BIOTECHNOLOGY FIRMS

SOURCES: BIOTECHNOLOGY INDUSTRY ORGANIZATION, VINNOVA

Disease Category Change, 2004-2013

Metabolic

(metabolic syndromes, obesity, lipids) +25%

Ophthalmology +10%

Platform

(antibodies, genetics, stem cell therapy) +8%

Other

(dermatology, allergy, renal, osteoarthritis,

musculoskeletal disorders, others)

+6%

NOTE: *ONLY INCLUDES U.S.-BASED VENTURE CAPITAL FUNDING

“The fact is that obesity is one of America’s costliest diseases:

nearly one of every five dollars spent on healthcare in the

United States will be attributable to obesity and obesity-related

conditions within the next decade”

Statement, Campaign to End Obesity

U.S. House of Representatives

UNDERSTANDING U.S. GEOGRAPHIC AND FUNDING PATTERNS WILL HELP SWEDISH BUSINESSES SUCCEED

Pharmaceutical

clusters in the U.S.

Medical device

clusters in the U.S.

BUSINESS SWEDEN’S MISSION IS TO MAKE IT EASIER FOR SWEDISH COMPANIES TO GROW INTERNATIONALLY

This support can include preparing for market entry with assessment of market potential, finding potential partners,

evaluating market entry scenarios and practical support with establishing a local presence


BUSINESS SWEDEN CAN SUPPORT ESTABLISHMENT

AND GROWTH IN THE U.S. MARKET

EVALUATE U.S.

MARKET ENTRY

PREPARE U.S.

ENTRY STRATEGY

ESTABLISH U.S.

PRESENCE

DEVELOP U.S.

BUSINESS

Evaluate if the U.S. is the

right market to enter for

your business.

- Analyze top markets of

interest

- Initial U.S. market

analysis

Find partners for you on

the U.S. market to help in

your entry and expansion

- Evaluate U.S. market

potential

- Build network through a

meeting program

Outsource administration

to enable full focus on

your business.

- Decide corp. structure

and create U.S. Inc.

- Set up business support

functions

Examine opportunities to

develop and grow your

U.S. business.

- Analyze U.S. growth

scenarios

- Merger and acquisition

support

WH

AT

E

x.

su

pp

ort

TALK TO OUR U.S. OFFICES, IN CHICAGO, NEW YORK, AND SAN FRANCISCO, ABOUT HOW TO GET STARTED

CHICAGO

Business Sweden

150 North Michigan Ave, Suite 1950

Chicago, IL 60601-7550, USA

T +1 312 781 6222

[email protected]

www.business-sweden.se/usa

CONTACT US

BUSINESS SWEDEN IN USA

NEW YORK

Business Sweden

The News Building, 220

E 42nd Street, Suite 409A

New York, NY 10017, USA

T +1 212 507 9001

[email protected]


SAN FRANCISCO

Business Sweden

100 Montgomery Street, Suite 1780

San Francisco, CA 94104, USA

T +1 415 835 3000

[email protected]


mailto:[email protected]



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U.S. BIOTECHNOLOGY MARKET - Business Sweden · PDF file · 2016-09-19global...

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