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Biopharma Industry Enthusiastic About 2012

January 12, 2012
By Eric S. Langer, president and managing partner, BioPlan Associates, Inc.

2012 Annual Study shows budgets, optimism taking a big jump

It looks like the biopharma industry is actually weathering the economic downturn quite comfortably. This year we’ve surveyed hundreds of biomanufacturers and suppliers, and the industry is expressing more raw optimism and confidence than at any time in the past 9 years we’ve been surveying this industry.

More Spending

What this means is that wallets are more open, and investments are being made for the future:

  • The firings and hiring freezes that have taken place since 2007, at least within areas that affect productivity, are reversing, and hiring budgets are back up,

  • Vendors are spending more on developing new and better technologies,

  • Pent-up demand for skilled scientists, and operations staff among biomanufacturers is resulting in more hiring,

  • Outsourcing, and off-shoring are being done more rationally, and are no longer a synonym for ‘you’ve just been laid off.’

Take the SurveyOur 9th Annual Report and Survey of Biomanufacturing1 surveys 400 biomanufacturers in 31 countries ever year. And along with the 180 vendors surveyed, we get a good picture of industry trends, problems, and opportunities. This year, we found that both biologics manufacturers and their vendors are spending more, demanding better technologies, and expressing greater optimism for the future than we would expect, given some of the recent gloomy economic trends, and "end-of-world" catastrophe predictions.

Below are just a few of the trends associated with the industry’s buoyant atmosphere. We will continue this discussion during the coming year, and share some of the data from our studies. With a whopping 37.3 percent of suppliers to this industry indicating that their company did either "better" or "much better" than expected in 2011, and with 49.4 percent expecting they will do even better in 2012, I expect this broad optimism will be translating into increased spending, stronger R&D budgets, more capital expenditures, and more hiring.

Short Answer: If you haven’t invested in this industry in some way, now’s probably a good time.  Here’s why:

Industry Growth Rate—Sales growth among vendors is a leading indicator of how the overall bio/pharma industry is doing. On average, sales growth to this industry is currently at around 14 percent annually. This compares to 13.0 percent in 2010, and 14.1 percent in 2007.  Most IRAs don’t return growth rates like that.

Budget Trends—Budgets are also a good indicator of industry strength. And budget estimates for 2012 are, once again, up strongly for areas such as acquisition of new technologies, capital equipment, and training. In fact, early returns from respondents to our 9th Annual Report are projecting increases in all 12 areas measured in 2012, except for outsourcing. Spending this year, in particular, is occurring in:

  • New technology;

  • Capital equipment;

  • Process development and optimization; and

  • Personnel training and development.

Other Positive Trends:

  • Biopharmaceutical markets—The world market for biopharmaceuticals is now about >$140 billion2;  growing at 15-18 percent annually, definitely a very healthy rate.

  • Approval-related Innovation and Progress—Good news: In 2011 FDA biopharmaceutical approvals involved genuine innovation and advances, with nearly all products being approved for new indications or for which the last product approval was granted well over a decade ago.

  • Biopharmaceutical Approvals—Despite increasing sales, the rate of biopharmaceutical approvals in the U.S. is flat (12 biopharmaceuticals in 2011). (see

  • Company and country approval trends—A record number, four (33 percent), of newly-approved U.S. biopharmaceuticals are manufactured outside the U.S. in the United Kingdom, Germany, Mexico and Italy.

  • Biosimilars (biobetters / biogenerics)—Patents are expiring and biosimilars are accelerating worldwide. Expect the entrance of many new manufacturers, and multiple biosimilars for each currently successful biopharmaceutical.  Our global facilities analysis3, indicates that biosimilar/biobetter companies are present in virtually every biotechnology-capable region.

  • Internationalization—The biopharma industry continues to expand its presence worldwide, particularly in developing countries.

  • Internationalization of Manufacturing—Much of the industry growth involves new capacity being added at existing foreign facilities. This is illustrated by BioPlan’s Top 1000 Global Biopharmaceutical Facilities Index, which ranks facilities in terms of capacity, employment, and production.

  • Internationalization of R&D—Large international (Big Pharma) companies continue their expansion and off-shoring of R&D.

  • Demand for Local Production of Biologics—Companies are developing manufacturing strategies that include local manufacture of vaccines, for example. This contributes to developing countries’ scientific/technical infrastructure and provides continued availability and price stability.

  • World Standardization of Manufacturing—As more biopharmaceutical manufacturing is performed worldwide, product developers are working to standardize their products and manufacturing processes.

  • Internationalization of Single-use ManufacturingThe increasing adoption of single-use/disposable bioprocessing equipment allows products to be developed, standardized and the same manufacturing systems shipped and installed at multiple facilities; benefitting emerging markets.

  • Single-use Bioprocessing Technologies—In 2011, single-use/disposable bioprocessing systems further increased their dominance for the manufacture of biopharmaceuticals for pre-clinical R&D and clinical testing. In 10 years about half of new commercial biopharmaceutical manufacturing systems can be expected to single-use based.

  • Microbial manufacturing—Most industry attention in recent years has concentrated on mammalian cell culture-produced recombinant proteins. A confluence of trends is contributing to increased use of microbial (bacteria, yeasts, other fungi, etc.) host cells for recombinant proteins manufacture.

  • Outsourcing—Companies of all sizes worldwide continue to increase their outsourcing, particularly R&D, and increase use of CROs, particularly for screening, and clinical research. Based our global survey of biomanufacturing, among 24 areas of outsourcing, the primary outsourced activities included product characterization testing, with 70 percent of biopharmaceutical companies outsourcing at least some activity.

  • The Economy—The worldwide economic downturn continues to impact biopharma. Yet, with its underlying sales revenue, the industry has remain insulated.  Financial issues affect most companies; however, demand for new, profitable products, ensures R&D will continue;  ≥$70 billion is being invested by the pharmaceutical industry in R&D.

  • Mergers/Acquisitions—The trend for industry mergers, acquisitions will continue.  However, some companies are recognizing that gutting their core competencies such as R&D and manufacturing is counterproductive.


Most of the fundamental indications are pointing to a positive, healthy industry; and bio/pharma is emerging from the current global economic situation by spending more, becoming more efficient, and, perhaps most importantly, showing great optimism.

I welcome comments on these trends and their impact on the industry.


1. 8th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production:  A Survey of Biotherapeutic Developers and Contract Manufacturing Organizations, BioPlan Associates, April 2011, 490 pages.
2. Rader, R.A., Biopharmaceutical Products in the U.S. and European Markets (database), BioPlan Associates,
3. See BioPlan’s Top 1000 Global Biopharmaceutical Facilities Index™, Accessed June 20, 2011
4. Biopharmaceutical Expression Systems and Genetic Engineering Technology: Current and Future Manufacturing Platforms, BioPlan Associates, Inc. 2008]

Eric LangerEric S. Langer is president and managing partner at BioPlan Associates, Inc., a biotechnology and life sciences marketing research and publishing firm established in Rockville, MD in 1989. He is editor of numerous studies, including “Biopharmaceutical Technology in China,” “Advances in Large-scale Biopharmaceutical Manufacturing”, and many other industry reports. You can contact him at: or 301-921-5979.