Five Competitive Forces in the Biotechnology Industry and Its Economics Scenarios

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Five Competitive Forces in the Biotechnology Industry and Its Economics Scenarios

Table of Contents Industry Analysis 3 About the Biotechnology Industry 3 The future of Biotech companies is bright 4 Porter's Five Forces 4 Threat of New Entrants 4 Power of Suppliers 4 Power of Buyers 5 Competitive Rivalry 5 Forecast Industry 5 Competitors 6 Economic Scenarios 7 Increased Demand for Money 7 Increase of Money Supply 8 Deflation 9 Price for Biotechnology Products 10 When to Build Inventory? 10

Industry Analysis
About the Biotechnology Industry
The biotechnology industry uses advances in genetics research to develop products for human diseases and conditions. Biologic drugs and products are more complex than most pharmaceutical drugs. Pharmaceutical drugs are typically produced by chemical synthesis, meaning specific reagents can be processed by chemical reactions to yield the same product every time. In contrast, biologic drugs are made by the genetic engineering of an organism’s cellular mechanisms to create the desired product. Being biologic means that the drugs are manufactured using living organisms rather than by chemical reactions. Biologic drugs are very large, complex proteins. Because of natural variability in living cells, uncontrollable small differences are inevitable in both the biological manufacturing processes and the resulting molecules. The biotechnology industry is a profitable industry; it is worth $200b and is growing 11% YoY. The industry spending is expected to grow to $210b in 2016 from $93b in 2006. In addition the industry estimates that the market for biosimilars will be worth $25b by 2020.

The future of Biotech companies is bright
Given the nature of its products, generic competition has been a less pressing issue for biotech industry than for most traditional pharma companies. Biologic drugs…...

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