"The industry in the US has never been stronger and we're seeing its success story spreading to other parts of the world - particularly Europe," is Ernst & Young's Global Biotechnology Leader Glen Giovannetti’s optimistic summary of the “Beyond Borders: Global Biotechnology Report 2007”, published today. "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."
Ernst & Young says, “Deal values soared, with alliances involving US companies totaling US$23 billion - an all-time record - while high premiums (the difference between the price per share paid by a buyer and the company's share price before the deal was announced) drove the value of mergers and acquisitions (M&A) to the second-highest level in the industry's history,” the report says. “In many ways, 2006 was the year of the deal - but this is all the more remarkable because there was no one deal of the year. In prior years high deal-value totals were typically driven by a single mega deal, but in 2006 we now have widespread recognition among buyers of the potential value in biotech's platforms and pipelines.
“Capital raised by the world's biotechnology companies grew by a massive 42%, to $27.9 billion. Venture capital reached $5.4 billion, an all-time high.”
Ernst & Young says that aggregate revenue of public biotechnology companies showed double-digit growth in the US, Canada, and Europe, while aggregate losses were at an all-time low. The number of products approved for marketing in the US rose from 33 in 2005 to 36 in 2006.
Ernst & Young Israel managing partner Yoram Wilamowski, responsible for the life sciences, said that the survey found 139 biotechnology companies in Israel at the end of 2006, making Israel number six in Europe’s biotechnology industry. The Israeli biotechnology specializes in several areas, including genetic R&D, diagnosis, treatment and drug delivery platforms, stem cells, and tissue engineering.
Wilamowski said that financing for Israeli biotechnology companies continued to be the main challenge during 2006, but was partly met through IPOs on the Tel Aviv Stock Exchange (TASE). 24 life sciences companies held IPOs between August 2005 and the end of 2006, raising an aggregate $127 million.
The maturity of Israel’s biotechnology industry is also seen in the fact that biotechnology companies account for 16% of all life sciences companies generating revenue.
Published by Globes [online], Israel business news - www.globes.co.il - on April 16, 2007
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