Fierce Biotech yesterday reported that R&D spending was up as many significant biotechs -- like Gilead, Amgen, Celgene, Shire, Regeneron, Onyx and Biomarin. In other words, many of the darlings of biotech investors -- companies who have experienced significant share price appreciation of late. Overall, the top 10 biotechs spent $11.8 B on R&D in 2012 -- nearly a 15% increase over the prior year.
So while it may be very trendy in Big Pharma to be trimming the internal R&D budget in favor of seeking outside collaborators or properties to fill the pipeline, focused, smart R&D spending in biotech seems to be working. That suggests R&D spending is not inherently BAD as you could be led to believe if you spent all your time listening to Big Pharma CEOs and their R&D Heads. Rather, R&D appears to require focus with spending on the right projects at the right time -- while minimizing waste -- not eliminating the budget.
This suggests that the top 10 biotechs will continue to thrive and may well find themselves to be the well sought after beauties at the ball. That means possible acquisitions, partnerships or licensing deals on the horizon -- and expect the Big Pharma guys to be the callers.
Posted by Bruce Lehr May 9th 2013.