Biotech Research and Development Expenditures Up 20%


Mar 08, 2013

Looking to accelerate drug candidates through clinical trials, biotech firms have boosted overall research and development (R&D) expenditures 20% in just a year, according to research and consulting firm GlobalData. In its new report, GlobalData compares the competitive position of 15 innovative mid-cap biotech companies on 20 financial metrics, finding that for the peer group, R&D spend for Q3 2012 reached $746.8M, climbing from $621.1M in Q3 2011.

“Biotech companies are becoming increasingly more successful at developing innovative therapies,” says Adam Dion, GlobalData’s Analyst covering Healthcare Industry Dynamics. “However, our research has found that the high cost of bringing these therapies to market continues to erode corporate profitability.” Dion explains that oncology is a main focus of biotech R&D activities, “which is driving peer group R&D expenses higher.”

Among its peers, Regeneron reported the highest R&D spend for Q3 2012, with an outlay of $158M. According to the report, Regeneron’s R&D spend has increased steadily each quarter since Q3 2011, when the total stood at $128M.

However some firms are spending less. In terms of percentages, ViroPharma displayed the biggest year-to-year drop in R&D expenditures, reporting that the company’s R&D spending plummeted year-to-year, from $22.9M in Q3 2011 to $16.5M in Q3 2012, a drop of 28%. GobalData’s report blames the decrease on the Food and Drug Administration’s suspension of clinical trials of Cinryze, the company’s flagship product.

“The FDA put a hold on two of the company’s Phase II clinical studies when trials revealed elevated antibody levels detected in the treatment arm of the study,” notes Dion. “These concerns have since been addressed and, with FDA approval, the firm resumed the trials in September of last year.”

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