The Global Biotechnology market comprises a large range of firms engaged in biotechnology activities. On one end are small, dedicated biotechnology companies that are research and development (R&D) intensive and operate primarily with venture capital, grants, initial public offerings and collaborative agreements. On the other end are large, diversified companies with significant in-house R&D resources and well-established production, commercialization and distribution processes.
IBISWorld estimates that Global Biotechnology industry revenue will reach $262.0 billion in 2013, having increased at an average annual rate of 11.0% over the past five years. Growth in 2013 is expected to continue, with revenue expected to jump 12.7%. This increase follows a relatively modest 8.7% rise in 2009, as the global recession eroded demand for nonessential health products and easing fuel prices tempered the biofuels craze.
The greater effect the recession had on the industry, however, was that private investors became reluctant to provide capital because the collapse in stock prices prompted increased risk aversion. This investor reluctance eased in 2010, although investors remain highly sensitive to any economic weakness. Any prolonged lack of funding would reduce firms' R&D budgets, which, if not reversed, will jeopardize the industry's future revenue growth.
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