Correspondence: J. Leslie Glick, 12306 Ashville Drive, Tampa, FL 33626, USA. Tel: +1 813 818 9252; Fax: +1 813 818 8278; E-mail: jlglick@ix.netcom.com

¹is an independent advisor to corporate management of private and public companies engaged in a variety of industries. From 1988 to 2004, he was Adjunct Professor of Technology Management in the Graduate School of University of Maryland University College. From 1992 to 2001, he was the Editor-in-Chief of Technology Management. In 1981, he co-founded the Industrial Biotechnology Association, which eventually became the Biotechnology Industry Organization. From 1969 to 1993, he co-founded and ran three biotech companies, including Genex Corporation, and prior to that was Chairman of Physiology of the Roswell Park Division of the State University of New York at Buffalo. He has a PhD from Columbia University.

Received 5 December 2007; Revised 5 December 2007; Published online 15 January 2008.

Abstract

A study was undertaken that validates the business models of biotechnology companies that compete in the pharmaceutical marketplace. Strategic alliances, largely with established pharmaceutical companies, have enabled biopharmaceutical companies to obtain revenues prior to achieving their goal of manufacturing and marketing their own products. As a result, despite the generally long lead-times to commercialisation, an increasing number of biopharmaceutical companies are demonstrating financial success in the marketplace, particularly with respect to revenues, at a faster pace than occurred for both the traditional pharmaceutical and the specialty pharmaceutical companies. There were 244 biopharmaceuticals approved for 366 indications from 1982 to 2005, of which 48 per cent of the approvals for both the products and the indications occurred in the period 2001–2005 (representing just 21 per cent of the 24-year period). From 1990 to 2005, the ten largest US biopharmaceutical companies increased their total revenues from $1.1bn to $31.7bn and turned a combined loss of $0.3bn to net income of $6.2bn. During this time-frame the number of US biopharmaceutical companies reporting revenues in excess of $1bn increased from zero to eight.