In 2014 the biopharmaceutical industry has surpassed virtually every financial benchmark imaginable. As the industry gets ready to gather in San Francisco next month, the question on everyone’s mind is, how long will it last?
Analysts are predicting 2015 will be another strong year for the sector even if it doesn’t outperform 2014. The optimists argue that the current market upswing isn’t a bubble, but a reflection of a fundamental change in the business model. Credit Suisse calls it a transition from Biotech 1.0 based on hopes and dreams to a Biotech 2.0 model where next gen blockbusters deliver on the promise.
But while commercial success brings a new sense of stability to biotech financial markets, it also brings new risks.
A backlash over drug pricing and/or compassionate use tops most list of risks cited by cautious analysts. There is the unknown potential of biosimilars to challenge blockbuster biologics.
Changes in policy could impact the relationship between the industry and the FDA or other critical regulatory agencies. On the legislative side there is the risk that the JOBS Act that has played such an important role in kick starting the industry’s recovery or that attempts to repeal aspects of the Affordable Care Act could create market uncertainty regarding pricing and payment models.
The Tuesday plenary lunch panel at Biotech Showcase will explore these issues and provide some perspective on the state of the biotech industry as we start the year.