In the last few years, the US is trying to bounce back from unbelievable unemployment and almost zero growth in the economy. Although, at the height of the US recession and very bad economic times, it seemed like the Biotech/Pharma industry was not as negatively impacted as other sectors. Advancing to 2015, Pharmaceutical Companies have announced $102.3 billion in biotech stocks were the market’s hottest investment.
The “S&P Biotech Select Industry Index has grown 34.31%, while the DJIA and the S&P 500 have only appreciated 2.97% and 6.7% respectively, meaning that in 2014, biotech has outperformed the market by an even larger margin than in 2013. This conveys the strength of the life science/Healthcare sector and shows that a stable framework is in place for further expansion”. However, it is important to point out that “rough estimate shows that only 30% of the 150 companies that make up the biotech index are profitable. Only 30% High-potential, no-profit biotech stocks are the most likely to come down as investors become less willing to pay up for growth”. Top Biotech Stocks to watch in 2015 are, Gilead Sciences, Inc. (NYSE/GILD), Alexion Pharmaceuticals, Inc. (NASDAQ/ALXN, Grifols, S.A. (NASDAQ/GRFS) and Biogen Idec (NASDAQ/BIIB). “There are always challenges bringing drugs to the market. Additionally, if you look at the cost of getting a new drug to the market, depending on the methodology of how you evaluate it, it can be anywhere from $500 million to $2 billion to get a drug candidate through the incredibly arduous pre-clinical, clinical and regulatory process just to demonstrate safety efficacy and tolerability to the satisfaction of the FDA”, in the opinion of the market the above mentioned biotech companies were successful in meeting the FDA demands. “Even when a drug gets to the phase 3 development stage, the probability of failure can be as high as 50 percent (depending on the therapeutic category.). Biotech companies tend to be highly resilient, able to reinvent themselves—they tough-out these disappointments. The passion, intellect and determination of committed scientists and clinicians remain undaunted, even emboldened by the challenges of drug development”
Recently, Biotech/Pharma companies have managed staffing challenges by implementing reorganizing/restructuring which has resulted in layoffs. Companies must identify staffing vulnerabilities and design in order to reduce layoffs. “Many of the people working in biotech companies hold advanced degrees and have highly specialized technical and nontechnical expertise. They are typically strongly value human life and hold a deep commitment to creating new therapeutics, medical devices or diagnostics that improve medical treatments or meet unmet medical needs”, because of this, it can be very difficult for individuals in the biotech/Pharma industry laid off to find another job in a timely manner (~6 months).