Biotechnology Companies Have to Insure against Failures in the
Research & Development Stages

Both biotechnology and pharmaceutical companies are feeling the
pressure created by the immense hype around the biotechnology
industry. Its extraordinary popularity creates unreasonable
expectations, wherein even common molecule failure in the research
and development (R&D) stages result in loss of both investor
confidence and funds for further research.

Such unrealistic expectations can be especially crippling to new
companies. The biotechnology sector will suffer more than
pharmaceuticals, as it does not have many established companies that
can absorb the burden of failed ventures.

If you are interested in a virtual brochure, which provides
manufacturers, end users, and other industry participants with an
overview of the Cost Benefit Analysis of Research and Development of
Top 10 Biotechnology Companies, then send an e-mail to Melina
Gonzalez, Corporate Communications, at melina.gonzalez@frost.com,
with the following information: your full name, company name, title,
telephone number, fax number, and e-mail address. Upon receipt of
the above information, an overview will be sent to you through e-
mail.

As a drug moves through more advanced stages of R&D, the losses
associated with failure will tend to naturally increase. To counter
this situation, biotech companies could enter into licensing deals
and implement risk management solutions.

The industry trends point toward an increase in such deals and
partnerships between companies. By sharing the risks and profits,
they can eliminate or decrease the jeopardy associated with
failures.

"The partnerships between big pharma and biotech companies are
likely to be the trendsetters in the industry," says Frost &
Sullivan Research Analyst Barath Shankar S. "With the technical
expertise of biotechnology companies and the marketing skills of big
pharmas, the collaborations are expected to be very successful."

Such strategic moves and plans have seen the top ten biotechnology
companies in the United States have 186 products in R&D, and of
these, nearly 20 percent are in phase III of development. These
products are likely to have substantial impact on market growth in
the next two to three years.

The biotechnology industry is optimistic about market growth despite
the recent spate of drug recalls, which wiped out billion's of
dollars of market capital. Since the fundamentals of product
development are sound, the companies are confident of overcoming
these setbacks and accelerating growth.

This positive attitude is a huge advantage in the biotechnology
industry, since it thrives on risk taking. From 1994 to 2005, the
top ten companies have returned an exceptional figure of close to 27
percent on stock price appreciation. In the next year, this number
is expected to reach 24-25 percent, despite a few setbacks.

Established companies such as Amgen, Chiron, Genentech, and Genzyme
are expected to continue leading the market. Such high returns from
biotechnology stocks are likely to sustain investor interest in the
industry and maintain focus on new R&D projects.

"Biogen IDEC, which has delivered the highest returns of 43.5
percent from 1994 to 2005, has a risk rating of 'moderate/high',"
says Barath Shankar. "Similarly, Gilead which has returned 29.5
percent, much above the industry average, has the highest risk
rating of 'very risky'."

Cost Benefit Analysis of Research and Development of Top 10
Biotechnology Companies is part of the pharmaceuticals and clinical
diagnostics subscription and examines the risk-return and cost-
benefit profiles of research and development of the top ten
biotechnology companies in the United States. The study incorporates
a model to evaluate and provide an outlook for each of these
companies. It also analyzes the possible blockbuster products in the
product pipelines. Analyst interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been
partnering with clients to support the development of innovative
strategies for more than 40 years. The company's industry expertise
integrates growth consulting, growth partnership services and
corporate management training to identify and develop opportunities.
Frost & Sullivan serves an extensive clientele that includes Global
1000 companies, emerging companies, and the investment community, by
providing comprehensive industry coverage that reflects a unique
global perspective and combines ongoing analysis of markets,
technologies, econometrics, and demographics. For more information,
visit http://www.frost.com

Cost Benefit Analysis of Research and Development of Top 10
Biotechnology Companies

F246

Keywords in this release: biotech companies, cost benefit analysis,
research and development, R&D, United States, Amgen, Chiron,
Genentech, Genzyme, Biogen IDEC, research, information, market,
trends, technology, service, forecast, market share

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