Facts about Biotech in Europe

The global biotechnology industry rebounded strongly in 2013, with public companies achieving double-digit revenue growth and a sharp increase in funds raised. However, much of the industry’s growth was driven by a relatively small group of commercial stage companies, increasing the urgency for the rest of the industry to achieve greater efficiency in their drug development efforts. These and other findings were released in Beyond borders: unlocking value, EY’s 28th annual biotechnology industry report.

The situation in Europe was almost a mirror image of that in the US. While the US industry saw strong growth in revenues and R&D spending and a decline in net income, the European sector delivered a relatively weak performance on revenues and R&D spending but came through with strong growth in net income.

Source: EY and company financial statement data.
Numbers may appear inconsistent because of rounding. 

Revenues of European public biotechs grew by only 3% in 2013, to US$21b.

R&D expense decreased by 4% in 2013, to US$4.8b.

Net income of public companies soared by 462% to US$1.03b, with 84 public companies achieving gains on the bottom line.

Market capitalization increased 44%; two-thirds of European companies saw gains in market cap.

European funding increased by 34% in 2013 to US$5.7b, the highest total since 2007. Almost half of the capital raised, US$2.4b, came from debt.

Europe enjoyed the best year for M&A since 2007. The total value of the 21 European M&A deals in 2013 was US$19.6b, up 487% year-on-year and more than the previous five years combined.

Source: EY and company financial statement data.
Numbers may appear inconsistent because of rounding. Commercial leaders are companies with revenues in excess of US$500 million

Splitting the European biotech sector into its commercial leaders and smaller  companies paints a somewhat dispiriting picture. European commercial leaders lag behind their US counterparts in most categories — a 4% increase in revenues, against 15% in the US, and no growth in R&D spending, despite better performance in net income than the US.
Source: EY, BioCentury, Capital IQ and VentureSource. Numbers may appear inconsistent because of rounding. Convertible debt instruments included in "debts"
The European biotech financing picture was very different from that of the US. Total financings for the year increased 34% from 2012 to US$5.7 billion — the best figure since 2007. While it was the second strong annual performance in a row, the uptick was not the result of a US-inspired rush on IPO transactions. Almost half of the capital raised in Europe in 2013 came from debt, at US$2.4 billion, up from US$2 billion in 2012.
Source: EY, MedTRACK and company websites
The European drug pipeline grew by 10% in 2013, with a total of 2,743 products, still less than half the size of the US’ drug pipeline. The growth was largely driven by activity in preclinical and Phase I development. The number of preclinical candidates increased 17% to nearly 1,400 candidates, while the number of Phase I contenders grew 10%. Products in Phase III declined 3% to 184 candidates.
The UK remained the pipeline leader, with 464 products, or 17% of the total, ahead of Switzerland (299) and Germany (287). Together, the UK, Switzerland, Germany, France and Israel contributed nearly 60% of the total European pipeline. The UK was home to 34 Phase III drug candidates in 2013, ahead of France (31) and Switzerland (30).