PHARMACEUTICALS

Lavish windfall gains from biotechnological unicorns

L

LOW RISK for entreprises

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Medicine demand bolstered by growing middle classes in Emerging Markets and aging population as a whole
  • Resilience of drug spending irrespective of economic cycle, coupled with huge public support for improving people’s healthcare needs
  • High level of R&D expenditures (still) well covered by strong cash generation
  • High level of R&D expenditure well covered by strong cash generation amid the pressing need for Covid-19 vaccines to reach herd immunity worldwide
  • mRNA technology close to being a game-changer for the sector, especially in oncology treatments
  • Venture capitalists and public investors’ appetite for investing in (listed) biotechnology firms
  • Supply-chain disruptions due to states’ pressure to ‘reshore’ drug production within Western countries
  • Lengthy procedures for new drug approvals on top of stiff price regulations
  • Generic drug makers plagued with lower profit margins and higher debt gearing than patented drug ones
  • Limited production capacities making it difficult to meet urgent delivery needs of all Covid-19 vaccines worldwide
  • Bargaining power of India and China regarding vaccine production and delivery

Key players

Country Role Sector risk
China

#1 market by revenue

A

Low risk

United States

#2 market by revenue

B

Medium risk

Switzerland

#3 market by revenue

A

Low risk

India

#4 market by revenue

A

Low risk

Germany

#5 market by revenue

A

Low risk