rans ‘siness Insights: Essentials Skip to Main Content Help View Gale Resources Select Interface Language: Eraish Erolsh) , J BUSINESS INSIGHTS: ESSENTIALS Back to Search Results Biotechnology Encyclopedia of Global Industries Biotechnology firms harness living organisms and biological components at the molecular, subcellular, and cellular levels to create marketable products. Products include bacterial and viral vaccines; serums, plasmas, and various microbiological substances; and genetically engineered plants and animals. The industry also encompasses firms that perform related research services, such as genetic coding and forensic testing. Biotechnology is closely aligned with the pharmaceutical segment within the broader chemical industry. Industry snapshot According to research by Emst & Young (E&Y), in 2012 the total revenues of public companies in the four established biotech centers (the United States, Europe, Canada, and Australia) in the biotech field were US$89.8 billion, net income was US$5.2 billion, and the industry employed 165,190 people. Although biotechnology industries were emerging in countries such as China, Singapore, Russia, Japan, and India, the United States continued to lead the global biotech industry on a single-country basis. U.S. industry revenue for public biotechnology companies was US$63.7 billion in 2012, according to E&Y. Europe continued to be the second-leading biotechnology market with 2012 public company revenues of USS20,3 billion, However, some industry analysts were concerned that the European industry was in jeopardy of losing its luster as competition increased from emerging countries, Continued investment and the development of breakthrough biotechnology products were key to the region's leadership. Biotech's emergence has been controversial. As the industry reports breakthroughs in cloning, stem cell research, and genetically modified foods, various social and political entities have responded with boycotts and bans, and in some extreme cases, violence. The United States is the world's largest producer and promoter of genetically modified crops, but most countries have been hesitant to accept even test fields of the products, with Thailand a notable exception. Despite the concerns of activists, many other countries were expected to follow, as large countries search for ways to more efficiently feed their populations and others try to compete for trade dollars. Biotechnology-related debates continue to occur in other areas. According to a December 18, 2013, article by Rudy Ruitenberg for Bloomberg, the European Union (EU) proposed a ban on farm animal cloning, and prohibition of imports of cloned livestock and the sale of food from cloned animals. Responding to an earlier proposal in 2010, David Edwards of the U.S.-based Biotechnology Industry Organization (B10) claimed the decision went against "global scientific agreement that foods from it gale chore scoalid nets sertiats/artclelGALE%7C 1250 600124/2aee7O(2tecStaSSceiddDaTafaeTSeueysl_ce_enatm weavs fines igs: Essertals livestock clones and their offspring are completely safe to eat.” With the industry continuing to suggest that tremendous benefits are potentially available through continued biotech research, the debate continued to take on interesting dimensions outside the purely economic ones. Organization and Structure Biotech companies generally start with an idea for a promising new technology, such as a cure for acquired immune deficiency syndrome (AIDS) or a better method of testing DNA. The risk of failure is high but success leads to potentially huge profits, status for the developing company and its researchers, and important benefits to society. A company developing a treatment for arthritis, for example, commonly spends two to four years identifying the biology of the disease and the potential therapeutic impact of a compound before spending another one to two years isolating a compound and figuring out how to get the substance to specific points in the human body. Another year or two may be spent designing a system to manufacture, modify, and purify the compound on a commercial scale. Thus, the company may have been laboring and investing for four to eight years with no product sales to support the research expenses. Biotech companies, which often begin with a few individuals, are typically funded with seed money contributed by venture capitalists. If early research and development efforts are encouraging, additional capital may be contributed by private investors during the first few years. If a firm can come up with what appears to be a promising product, a financial partner will inevitably step in, usually a large drug company that can support the start-up biotech firm with sizable research expenses, as well as testing, government approval, and production. In return for its support, the drug company may receive compensation in the form of marketing and distribution rights to the new product. Some companies acquire additional funds by going public with their stocks. An increasing number of companies were obtaining government support for their research, particularly in Asia. Governments were seeing the potential social, economic, and political benefits of their countries holding the secrets to particularly useful biotechnological processes. Background and Development Broadly defined, biotechnology has been applied commercially since at least 7000 BCE, when people began using fermentation to produce drinks, food, and fuel. A "second generation" biotechnology, which involved processes not completely understood by researchers at the time, emerged in the first half of the twentieth century. Scientists at that time began using microbiology and biochemistry to process waste and produce pharmaceuticals, chemicals, fuels, and food. In the 1930s, beef insulin, a protein, was used to treat diabetes but it was one of only a few that humans were able to exploit until decades later because researchers were limited by their ability to extract a single protein from the hundreds of proteins that might be manufactured by a group of cells. The pivotal breakthrough to biotechnology occurred in 1953 when British scientists James Watson and Francis Crick discovered the structure of DNA. That understanding led to a realization of the process by which proteins are produced by cells, which in turn led to the creation of the biotechnology industry Another milestone was reached in DNA research in 1973 when U.S. scientists Stanley Cohen and Herbert Boyer succeeded in sniping an individual piece of DNA out of an African clawed toad. They titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm aneavs fines igs: Essertals were able to splice that fragment into a common bacterium, where it began to function with the foreign gene, and the process of recombinant DNA was born. For their efforts, Cohen and Boyer received a Nobel Prize. The chief benefit of the breakthrough was that scientists discovered how to genetically alter micro-organisms and produce large quantities of proteins that occurred naturally only in small quantities through fermentation. These proteins could be designed and manipulated for specific purposes. Asseries of biotech advances followed the 1973 achievement beginning with the production of the first monoclonal antibodies in 1975. Monoclonal antibodies are essentially cloned cells that can be used to. attack foreign toxins, viruses, and cancer cells. In 1976 the first working synthetic gene was developed and in 1977 important methods for reading DNA sequences were discovered, By 1978 the first identification of the high-level structure of a virus and the first production of recombinant human insulin were achieved. The first human growth hormone was synthesized in 1979, and in 1980 biologists succeeded in transplanting the gene for human insulin into a bacterium. By the early 1980s scientists were learning to transfer a number of newfound genes into bacteria to create large amounts of disease-fighting proteins. In 1981 scientists created the first Chimera, a creature carrying a gene placed there by humans rather than nature. That experiment, which involved a mouse, demonstrated how biotechnology could be used by humans to influence the genetic makeup of living creatures. It also proved that animals could be used to test human biotech treatments, following the precedent used in conventional medical experiments Although researchers in the United Kingdom, and later Europe, contributed to the biotechnology revolution during the 1960s and 1970s, scientists in the United States assumed an early and dominant lead in the emerging science. Significant early biotech start-ups were Cetus (1971), Genentech (1976), Genex (1977), Biogen (1978), Centocor (1979), and Amgen (1980), all based in the United States. These companies, along with a few others, capitalized on the belief of many investors that biotechnology was going to have a great impact on many areas of industry, medicine, food, energy, and agriculture. Although some of those companies made significant contributions to the burgeoning field of biotech, it was not until the 1980s that the industry boomed. The growth was largely the result of a U.S. Supreme Court ruling that allowed genetically engineered bacteria to be patented. For many, that ruling suggested the possibility of massive financial rewards for biotech innovators. During the early and mid-1980s, growth in the biotech industry surged as new companies started and technology rapidly advanced. At the start of the 1980s only 40 different genes had been identified but by the end of the decade, as new genes were identified regularly, more than 4,000 had been discovered. Gene identification sparked enthusiasm about the potential to develop new treatments and cures for diseases, develop improved plants and foods, and create a range of industrial products that could, for example, clean up oil spills or produce substitutes for petroleum-based fuels, Although industry revenues were negligible early in the 1980s, the number of biotech start-ups was impressive. The United States led the world with about 50 start-up biotech companies in 1980. That figure grew to approximately 100 start-ups annually for most of the decade. For reasons related primarily to politics and the attitude of the British financial community, the United Kingdom relinquished its early lead in biotechnology to the United States. However, the United Kingdom followed the U.S. industry's lead and became the second major global player during the 1980s. The first British biotech start-up, Celltech, was founded in 1980 as a combined effort between titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm aneavs fines igs: Essertals academic, government, and private-sector players. Similar start-ups that followed included Cambridge Life Sciences, Agricultural Genetics Co., British Biotechnology, and Delta. France and Germany followed with various government-supported biotech ventures. French start-ups included Transgene, Genetica, and G3, West Germany's interest in biotechnology was demonstrated in the 1970s by the creation of federally funded agencies, allowing the country to enter the industry relatively early compared to other continental European countries. By the late 1980s, Germany had become a rival of the United Kingdom for biotech investments. After a slow start in the early 1980s, the Japanese government partnered with private industry to develop biotechnologies, including recombinant DNA and mass culturing of cells. Japan's biotech ventures were conducted through large companies rather than through entrepreneurial concerns. Japan made major investments and successfully converted some important technologies that had been developed elsewhere into marketable products but did not produce many biotech innovations. A surge in the biotech industry in the mid-1980s was largely a consequence of financial markets. Investors, excited by the possibility of huge returns from cancer-curing wonder drugs and other biotech products, made massive investments in promising biotech start-ups. Some of the cash flow was diverted to European companies but most of it was infused in cutting-edge U.S. concerns. A combination of factors diminished cash flow beginning in 1987 and the industry was considered to be reaping its just reward for overstating expectations. However, after a three-year lull, investor enthusiasm returned and the industry experienced explosive growth. Much of the rally was sparked by the successes of a few star players, especially U.S.-based Amgen, which introduced a successful drug designed to battle anemia. Funding for the U.S. biotech industry from all sources grew from about US$1.2 billion to US$4.4 billion between 1990 and 1991. Subsequently, the number of industry competitors in the United States and Europe surged to more than 1,500 by 1993, and the stock prices of publicly traded firms rose nearly threefold on average By 1993 the biotech industry was beginning to live up to its promise of providing life-enhancing, genetically engineered breakthroughs. A handful of companies, almost all of which were in the United States, succeeded in getting several important products approved for sale. Amgen, with huge sales and profits in 1993 and 1994, had the most products approved, followed by Biogen, which was pushing an Alpha interferon for hepatitis and cancer as well as a hepatitis B vaccine. In addition, biotech pioneer Chiron was marketing an anticancer agent and a treatment for multiple sclerosis, and Genentech was selling a human growth hormone and a treatment for cystic fibrosis Despite these encouraging success stories, some investors became disillusioned with the biotech industry. After years of large capital investments in research and development, many had become impatient waiting for returns. Their frustration was provoked by the number of big failures that consumed millions of dollars with little or no return. For example, Synergen, a U.S. firm, tried to create an antisepsis drug called Antril. Sepsis is an infection that floods the bloodstream of cancer and burn victims, affecting hundreds of thousands of people annually, often resulting in death. Armed with US$300 million in capital, Synergen built manufacturing plants and hired a sales force during the early 1990s, despite lackluster test results for Antril. The company eventually stopped developing the drug after losing US$165 million. Economic failures like Antril highlighted structural problems that plagued the biotech industry in the mid-1990s. Too much money was being spent on technology that was not working. Wary investors titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm anavs fines igs: Essertals tightened their purse strings, suggesting a possible industry shakeout that would eliminate companies that were not producing results, reinforced by plunging biotech stock prices. Some industry observers considered part of the problem to be the high level of fragmentation in the industry. In the United States and parts of Europe, several companies were often competing to produce the same products, One result was that research and development efforts were overlapping, resulting in overall inefficiency. These and other dynamics indicated that the biotech sector might be entering a period of consolidation The net effect of industry turbulence in the mid-1990s was a shift of new capital from the investment community away from small, entrepreneurial start-ups with unproven technology to their established competitors who had a good chance of success. Shifting financial dynamics had numerous effects on the capital-intensive industry, including an increase in collaboration. Small firms that were faced with diminished access to funds compared to the early 1990s began to seek more joint ventures with large pharmaceutical firms, big brokerage houses, and other biotech firms with complementary technologies or operations. By 1995 about 1,800 biotech firms were operating in Europe and North America, with nearly 1,300 in the United States. in addition, a growing number of large pharmaceutical companies were becoming more active in biotechnology. In the United States, which continued to account for the majority of industry revenues and product introductions, biotech sales jumped from US$2.7 to USS7.7 billion between 1989 and 1994, Although aggregate industry losses increased from US$2.1 billion to about USS4.1 billion annually during the same period, employment and research spending was up significantly By 1995 the biotechnology industry had spent more than US$25 billion in capital, most of which was invested in research and development. Biotech companies in the United States had raised additional capital at a rate of about US$5 billion annually in 1995, and the industry held the number one ranking worldwide in expenditures as a percentage of total revenues and total costs. After years of research and development (R&D), biotech pioneers in the mid-1990s had failed to produce the cancer cures and wonder foods that many investors and industry participants had expected. Nevertheless, research efforts were beginning to bear fruit, and a number of new development ventures suggested eventual breakthroughs. By 1995 biotech drugs were helping cystic fibrosis patients breathe more easily, reducing the number of heart attack related deaths by eliminating blood clots and diminishing the threat of hepatitis with vaccines and blood-screening tools. In 1997 Roslin Institute researchers in Scotland announced that a sheep named Dolly was the first mammal to be cloned with material taken from another. That development sparked international debate about the moral and ethical aspects of genetic engineering, particularly of human beings. Most countries agreed that cloning of human beings was not acceptable or desirable, and several signed a ban on cloning Europe and Asia recognized the importance of biotechnology to health care and future economic prosperity. Europe recorded a 50 percent increase in the number of small biotech firms. Although Asia still trailed the United States and Europe in biotech development, several countries, notably Japan and China, made significant gains. Japan was developing its own pharmaceutical industry and had introduced several products to treat infections and detect diseases such as AIDS. Japanese researchers were also active in genetic engineering and had successfully cloned a cow. China's biotech focus was largely on bioagriculture, although its pharmaceutical industry was growing. China titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm siavs fines igs: Essertals produced several genetically engineered crops that included nutritious, disease-resistant tomatoes, Wheat, and rice with a longer shelf life. Biotechnology endured difficult times during the early twenty-first century. As capital investment levels declined, industry players struggled to keep their research and development initiatives alive with existing funds. The BIO noted that while industry funding was US$38 billion in 2000, levels fell to US$15.1 billion in 2001 and US$10.5 billion in 2002. By 2003 conditions were improving as investors began to finance the biotechnology market. The BIO indicated that funding levels began to increase in 2003, reaching US$16.9 billion. In addition, some companies benefited from increased funding related to going public, as well as to mergers and acquisitions. According to a study by consulting firm Emst & Young, three main issues faced the biotechnology industry. First, there were too many players in an industry that continued to lose money. Mergers and acquisitions had increased, especially for firms doing research in similar areas that sought economies of scale as funding became increasingly difficult. Companies that could not find funding and that chose not to seek a merger or acquisition were facing bankruptcy. For example, PPL Therapeutics, which had cloned Dolly the sheep in 1996, had filed for bankruptcy by 2004. Second, the industry was starting to mature, resulting in specialization for firms that had once tried to diversify. Approximately one-third of companies were forming alliances with firms doing similar research with each firm responsible for a specific part of the process. Such alliances between large pharmaceutical companies and small biotech firms had become increasingly common. One successful alliance was between CuraGen Corporation and Bayer Pharmaceuticals to find treatments for diabetes and obesity. Previous investments in CuraGen allowed the company to enter the alliance that would allow it to profit from any drugs developed. The third issue facing the biotechnology industry was globalization, as companies expanded their markets and began to be listed on global stock exchanges to become more competitive and increase their investor base. An increase in government support also supported globalization in the biotech industry. For example, in March 2005 the United Kingdom announced a huge increase in funding for scientific research, especially for the growing area of stem-cell research. Successful research was also being completed in Cuba, where a vaccine for meningitis B was developed, leading to a biotech sector that was internationally successful A major joint study on biotechnology in agriculture was completed in 2008 by the United Nations and the World Bank. The International Assessment of Agricultural Knowledge, Science and Technology for Development ([AASTD) involved 400 experts in various disciplines for four years. The study concluded that biotechnology held little potential for alleviating world poverty and hunger as some proponents had claimed. It supported an alternative view that biotechnology was a force for greater agricultural consolidation and profit in the wealthy nations. Representatives from the biotech firms Monsanto and Syngenta, which had been involved in the study, withdrew in protest before the findings were released Worldwide, biotech was rapidly adopted, however. In 2010 the fastest- growing sector of agricultural biotech was transgenic crops. These promised to allow farmers to have greater yield per acre, reduce costs, and increase their crops' resistance to pest and disease. In 2009 alone, the acreage devoted to biotech crops rose by 333 million acres. An interesting legal development occurred in 2010 when health care firm Myriad Genetics, which had titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm aravs fines igs: Essertals patented two genes used in cancer testing, was sued. The judge in the case ruled that the genes in question could not be patented. Myriad asked the U.S. Justice Department to step in because the long- held position of the U.S. government was for easy patentability. In a surprise finding, the Justice Department agreed with the judge that the genes in question were not patentable. This finding was seen as a new direction on the issue by the Obama administration The recession of 2008-2009 affected the biotech industry by restricting the flow of funds for new ventures and research. In November 2010 the San Jose Mercury News reported that conditions were looking up, since 2010 had already seen 12 new initial public offerings (POs) of biotech firms in the United States. There had only been three U.S. biotech IPOs in 2009 and just one in 2008. Although 2011 was not as good a year as some had hoped it would be, with only 10 U.S. biotech firms going Public, by 2013 the market was picking up quickly, with 30 biotech IPOs by September of that year, according to a September 22, 2013, post by Bruce Booth for Forbes. BIO reported that there were 286 biotech companies trading on public exchanges as of May 2013; 84 percent of those were focused on drug development. Current industry conditions According to ReportLinker, the global biotechnology industry could exceed US$320 billion by 2015, with growth spurred by economic recovery, increased research and development, and more government support. According to the 2013 report by the research firm, "The economic crisis negatively impacted the biotechnology market and brought about revenue declines in the US and the EU as a result of limited capital inflows and the delay or cancellation of projects.” However, market has entered a phase of recovery with many large biotechnology outfits generating revenue thanks to new cost-savings and efficiency measures." Although the United States, Europe, Canada, and Australia were still the four main centers for biotechnology, China and India were cited as rapidly growing markets, especially in the agricultural and industrial sectors. Also, although Europe still lagged behind the United States in development of biotechnology, some saw signs of improvement in the industry. For example, E&Y reported in its 2013 report, "Beyond Borders, Matters of Evidence,” that European publicly traded biotech companies reported revenues of US$20.38 billion in 2012, an increase of 8 percent over the previous year. Employment also increased by 8 percent. The European pharmaceutical pipeline was about half the size of the United States’, and Germany and Switzerland together accounted for 40 percent of all drugs under preciinical and clinical trial in 2012, although the United Kingdom had the most drugs in the preclinical phase, according to the June 2013 research by EuropaBio. At the January 2014 JP Morgan (JPM) Healthcare Conference held in San Francisco, immuno- oncology (I-O) was considered an area of immense interest to the biotech industry. According to the website of global biopharmaceutical company, Bristol-Myers Squibb (immunooncology.com), |-O “is an emerging therapeutic modality" that is being studied by the industry for its potential to aid in the fight against cancer. Where traditional cancer treatments, such as chemotherapy, radiation, and surgery target the tumor in a cancer patient, |-O seeks to understand how the cancer evades the immune system. Bristol-Myers Squibb and others in the industry are focused on understanding and changing how tumor cells and the body's immune system communicate. titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm maavs fines igs: Essertals According to a report by professional services firm, Deloitte Touche Tohmatsu Limited (Deloitte), the life sciences sector, which includes biotechnology along with the pharmaceutical and medical segments, has been less impacted by the global economic uncertainty of the second decade of the new millennium. The firm's research projected total global biotech industry revenues to reach US$262 billion by the end of 2013, with forecasted revenue to 2018 reaching US$407.3 billion. A major driver in the biotech industry, according to Deloitte, is the biosimilars market. Biosimilars are engineered copies of high-priced biotech drugs. The global market for biosimilars grew by 44 percent to US$2.5 billion in 2011 and is expected to increase to US$3.6 billion by 2016. The fastest growth in this market is anticipated to be in the Asia-Pacific region. Debate about genetically modified foods, and the consumer's right to be informed, continued into the mid-2010s. In a January 4, 2014, article for the New York Times, Amy Harmon reported on the May 2013 bill introduced on the U.S. island of Hawaii to ban genetically engineered crops. Public hearings about the bill were dominated by concems over health issues, genetic contamination, overuse of pesticides, and the disappearance of various insect populations, perceived to be caused by genetically modified organisms (GMO). In the same month, Huffington Post blogger and journalist Kristin Wartman reported on an announcement from General Mills that its breakfast cereal, Cheerios, was now considered GMO-free. While General Mills received positive public response from this move, Wartman noted that the company was “one of the major contributors to the fight against GMO labeling in California and Washington, giving $1,230,300 and $598,800 respectively." The reason, Warman reported, was that most foods sold under the General Mills label contained GMO ingredients. While large multinational enterprises continued to dominate the biotech landscape in terms of sales and research and development investment, there was still room for the start-up organization in 2014. In a January 21, 2014, report for the U.S. news program, King 5 News, Renay San Miguel highlighted one such company, Immusoft. The CEO of Immusoft, Matthew Scholz, was an entrepreneur whose previous projects had included software for mobile applications and GPS-based logistics. His venture into the biotech field still involved some programming basics. “It struck me that the way the body attacks a pathogen is similar to the way a computer attacks a password," he told San Miguel, likening a vaccine to a computer password and suggesting that disease could be treated from an information- based perspective. immusoft's team of researchers worked on removing some of the cells that produce disease-fighting antibodies, adjusting their genetic code, and reinserting them into the patient. The aim was to encourage the cells to produce medicine themselves. This treatment, said Scholz, would be less expensive, more efficient, and last longer. His lab facility is shared with other biotech start-ups in Fremont, Washington, and Immusoft also does work with the Fred Hutchinson Cancer Research Center and the Biomedical Research Institute in Seattle Washington Industry leaders Amgen. ‘Amgen was started in 1980 by George Rathman, who had been working for U.S. research giant Abbott Laboratories and had become intrigued by recombinant DNA technology. Abbott Labs offered to fund 52 percent of his venture, but Rathman turned them down because he wanted his company to be free titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm aravs fines igs: Essertals from corporate influence to achieve its goals. The company started with funding from venture capitalists before going public in 1983. Its research focus was on a chicken growth hormone that was designed to reduce feeding costs. Additional public offerings brought enough cash into Amgen's coffers to fund intense research and development efforts throughout the 1980s. In April 2002 Forbes magazine informed readers that if they had purchased Amgen stock in 1983, they “would now be sitting on a 182-fold gain." In 2005 Amgen continued to be the unrivaled leader of the biotech industry. By 2012 sales had reached US$17.2 billion. For the nine-month period ending September 2013, Amgen reported sales of US$13.67 billion, up 6 percent from the same period in the previous year. Genentech. Another global biotech leader, Genentech, was founded in 1976 by Robert A. Swanson and Herbert Boyer. The company focused on three main areas: oncology, cardiovascular conditions, and endocrinology, Headquartered in San Francisco, Genentech marketed and developed products based on human genetic information. It was the first company to splice a human gene into a bacterial cell to manufacture a usable protein. The company manufactured and marketed a number of products in the United States, including Protropin and Nutropin, and Nutropin AQ for the treatment of human growth deficiencies. Other products included Activase, a treatment for acute myocardial infarction (heart attack); Actimmune, for the treatment of infections from chronic granulomatosis (a deficiency of the immune system); Pulmozyme, a treatment for cystic fibrosis; Avastin, for the treatment of colon cancer; and Rituxan, for the treatment of non-Hodgkin's lymphoma. In March 2009, Genentech merged with the Roche Group, operating as an independent center within the group. Revenues for Genetech were US82.3 billion in 2012, Chiron/Novartis. Chiron Corporation, founded in 1981, had business units for blood testing, vaccines, and biopharmaceuticals for infectious diseases and cancer, The company generated revenues of more than US$1,7 billion in 2004, up 81.6 percent from 2002 revenues. By the end of 2004 the company employed approximately 5,400 workers in 18 countries on five continents. In addition to research centers in Emeryville, California; Seattle, Washington; and Siena, Italy, the company had manufacturing operations in the United States, the United Kingdom, Germany, Italy, the Netherlands, and India. Chiron was the first company in the United States to market a drug to treat multiple sclerosis, Betaseron, which reduced the frequency and severity of attacks caused by some forms of the disease. Chiron was acquired by Switzerland-based Novartis in 2006. Novartis generated some US$58.5 billion in sales in 2012 and employed 119,418 people worldwide. Genzyme. Based in Cambridge, Massachusetts, Genzyme was founded in the early 1980s by a group of entrepreneurs with enzyme expertise. Because the company began by developing and manufacturing diagnostic products, it had an immediate source of revenue, unlike many other biotech start-ups. The company focused its research efforts in the areas of genetic diseases, disorders of the immune system, cardiovascular disease, and oncology. in 2011 it was acquired by Sanofi and the following year Genzyme recorded sales of US$4.6 billion with 12,000 employees. Biogen Idec Inc. titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm onrans ‘siness Insights: Essentials In November 2003 two of the world's leading biotech firms, Biogen Inc. and IDEC Pharmaceuticals Corp., merged to form Biogen Idec Inc. The merger was one of the signs that the biotech industry was maturing and emphasized the need for companies in the industry to strengthen their investor base while decreasing expenditures through the amalgamation of services. Biogen Idec concentrated on treatments for inflammatory and autoimmune conditions, as well as various forms of cancer. Based in Cambridge, Massachusetts, the company also had offices in Canada, Australia, Japan, and throughout Europe, employing approximately 4,000 people worldwide. By 2012 revenue exceeded USSS billion Major countries in the industry The United States. The United States assumed an early lead in the global biotech industry partly because of its entrepreneurial environment, as well as efficient capital markets and strength in technologies related to biotechnology. The United States produced a number of biotech start-ups and technological breakthroughs during the 1970s and early 1980s and the industry thrived during the mid-1980s. Between 1975 and 1994 the United States had developed 45 percent of the world’s most important drugs. The treatments targeted respiratory conditions, AIDS, Parkinson's disease, heart disease, stroke, hypertension, cancer, and non-Hodgkin's lymphoma. The United States led its overseas counterparts in major research efforts, such as a biotech cure for AIDS and identification of the human genome According to an E&Y report, the United States boasted 2,175 public and private companies in the biotech sector employing 100,100 people and generating USS$63.7 billion in revenues in 2012 Europe. In the early 2010s, the United Kingdom remained the biotech leader in Europe. E&Y reported 2012 revenue from U.K.-based public biotech companies was US$5.47 billion, easily topping the totals of the next two largest countries, France (US$3.47 billion) and Sweden (US$2.48 billion). Total 2012 biotech revenue from the region was US$20.38 billion, an 8 percent growth rate from the previous year. Profitability remained as volatile as ever, with countries such as France, Germany, and Norway all posting losses for the year. Australia. Australia’s public biotech sector performed comparably to the U.K.’s, posting 2012 revenue of US$5.06 billion (according to E&Y). This industry consists of more than 50 public companies, but CSL Limited is by far the largest firm, and most of the continent's revenue derives from sales of CSL products such as flu vaccines. Although revenue increased by 7 percent, the industry shed roughly 1,800 jobs. Canada. E&Y reported that in 2012 revenues for the Canadian biotech industry increased just 1 percent over the previous year to reach US$619 milion. In the early years of the twenty-first century, many leading Canadian companies were acquired by foreign entities, leading to a downward trend in research and development investment. In 2012 R&D dropped 12 percent to USS405 milion in that country. Industry research and technology titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm soreavs fines igs: Essertals U.S. biotech companies spent US$19.3 billion on research and development in 2012, according to E&Y. Biotech is one of the most research-intensive industries in existence. The industry uses high levels of capital but also invests heavily in labor, due to the need for knowledge-intensive employees. Overall, “for every dollar spent on labor, $0.41 is spent on capital," according to IBISWorld. Further Readings "2014 Global Life Sciences Outlook: Resilience and Reinvention in a Changing Market Place." Deloitte Touche Tohmatsu Limited, 2013. Available from https://www2.deloitte.com “About Amgen." Amgen, Inc., June 15, 2013, Available from www.amgen.com “About Genzyme.” Genzyme, June 15, 2013. Available from http://www.genzyme.com. "About Novartis." Novartis AG, June 15, 2013. Available from http:/www.novartis.com, "About Us." Biogen Idec, June 15, 2013. Available from http://www.biogenidec. com. Alspach, Kyle. "Flagship, Third Rock Enjoying Biotech IPO Momentum.” Boston Business Journal, June 11, 2013. “Asia: The Future in Generics and Biosimilars." Asia Pacific Biotech, May 2013. Beyond Borders: Biotechnology Industry Report 2013. Emst & Young LLP, 2013, Available from http://www.eyi.com, "Biotechnology Industry: Market Research Reports, Statistics and Analysis." ReportLinker, January 2012. Available from http:/www.reportiinker.com. Booth, Bruce. "What's Behind the Booming Biotech IPO Market?" Forbes, September 22, 2013 Available from http:/Avww.forbes.com/sites/brucebooth/2013/09/22/whats-behind-the-booming-biotech- ipo-market. “Clinical Trials / Drug Trials News." Medical News Today, June 15, 2013. "Company Information." Genentech, June 15, 2013. Available from http://www.gene.com, “Facts about Biotech in Europe.” EuropaBio, June 15, 2013. Available from http://www.europabio.org. "Global Biotechnology: Market Research Report." IBISWorld, April 2013. Available from http://www.ibisworld.com. "GM Crops: UK Environment Secretary to Push for Relaxation of EU Rules." Guardian, June 12, 2013. Grushkin, Daniel. "Glowing Plants: Crowdsourced Genetic Engineering Project Ignites Controversy.” Scientific American, June 11, 2013 Harmon, Amy. "A Lonely Quest for Facts on Genetically Modified Crops." New York Times, January 4, 2014. Available from http:/mww_nytimes. com/2014/01/05/us/on-hawaii-a-lonely-quest-for-facts-about- gmos.htmi?ref=geneticallymodifiedfood. "Human Cloning ‘Within 50 Years.” Telegraph, December 18, 2012. Kirsner, Scott. "Gene Therapy Shows New Signs of Promise.” Boston Globe, June 2, 2013. Lolas, Anastasia G., and lan Uydess. "State of Quality and Compliance in the Biopharmaceutical Industry." Biopharm International, April 1, 2013. Lunt, Par Nadine, "Commercialization, Here We Come~Full Speed Ahead.” BIOTECanada, 2013. Available from http:/www.biotech.ca "MHRA-BIA Conference to Showcase Innovation in the Development and Regulation of Biopharmaceuticals.” Biolndustry Association, April 16, 2013. Available from http:/www.bioindustry.org, "The Next Challenges of Biotechnology in Japan." Global Forum on Biotechnology, OECD, November 12, 2012, Available from http:/www.oecd.org. Oran, Olivia. "IPOVIEW-Quiet U.S. Biotech Sector Picks up Steam in 2013." Reuters, May 22, 2013. Available from http:/Avww.reuters.com. “Research and Markets: Pharmaceutical Industry in China Report: 2013 Edition." Research and Markets, April 16, 2013. Available from http://researchandmarkets.com Ruitenberg, Rudy. "EU Proposes Ban on Cloning Farm Animals, Sale of Clone Meat.” Bloomberg, December 18, 2013, Available from http://www. bloomberg.cominews/2013-12-18/eu-proposes-ban-on- cloning-farm-animals-and-sale-of-clone-meat.htm| titi gale chore scoot ete sertiatsartcle/GALE%7CI2501600124/2aee7O(2HecStaSSelsd2a7aaeTEtiverysl_ce_cnethm sreavs fines igs: Essertals Sackman, Jill, "Navigating Emerging Markets: Southeast Asia.” Biopharm International, June 1, 2013. San Miguel, Renay. "Local Biotech Startup Wants to Turn Body's Cells into Drug Factories." King 5 News, January 21, 2014. Available from http:/Awww. king5.com/news/Local-biotech-startup-wants-to- turn-the-bodys-cells-into-drug-factories--241343241 html. "State of the Biotech Industry: Burril's Biotech 2013 Report." BioTech Now, April 24, 2013. Taylor, Lynne. "Industry Tells MHRA: ‘Don't Forget UK." PharmaTimes, June 6, 2013, Thomas, David. "Only 12 Percent of Public Biotechs Are Profitable." BioTech Now, May 16, 2013. Wartman, Kristin. "GMO-Free, and Fewer Calories Too! Big Food Makes Some PR Moves." Huffington Post, January 17, 2014. Available from http://www.huffingtonpost.com/kristin-wartman/big-food- pr_b_4612503.htmI. "What Is Biotechnology?” Biotechnology Industry Organization, June 15, 2013. Available from http://www.bio.org. Source Citation: "Biotechnology." Encyclopedia of Global Industries. Farmington Hills, MI: Gale, 2014. Business Insights: Essentials, Web. 1 Mar. 2015. URL http://bi.galegroup.com/essentials/article/GALE%7C12501600124/2aee76f24ec8fa5Sdfdfdd2a7dfae78e? u=nysl_ce_onehm Document Number: GALEI2501600124 o's CENGAGE “Learning it gale chore scoalid nets sertiats/artclelGALE%7C 1250 600124/2aee7O(2tecStaSSceiddDaTafaeTSeueysl_ce_enatm wane