Biotech Sees Record Growth

Biotech sees red-hot growth in U.S. and Europe

Ernst & Young crunched the numbers on the U.S. biotech industry for 2006 and found that the industry produced a record $23 billion in drug development alliances involving U.S. developers while merger and acquisition activity hit its second-highest level in biotech history. Analysts for E&Y were quick to point to the swelling valuations in drug discovery as a key reason for the burgeoning growth, while noting that the global biotech industry boosted the total amount of capital raised by 42 percent, to $27.9 billion. Venture capital hit a record $5.4 billion. Double-digit revenue growth was achieved by publicly traded biotech companies in Europe, the U.S. and Canada.

"The industry in the U.S. has never been stronger and we're seeing its success story spreading to other parts of the world, particularly Europe," said Glen Giovannetti, Ernst & Young's Global Biotechnology Leader. "Time will determine whether these trends will be sustained, but there's reason for optimism. Innovation is being rewarded with record revenues and unprecedented premiums in M&A transactions."