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On the Upswing

On the Upswing

A surge in biotechnology market capitalization and the number of public firms worldwide

Ultimately, a country’s performance in biotechnology comes down to output, and publicly traded companies offer objective insight on this. The lack of transparency in private firms makes them less useful for such a comparison. To compare outputs around the world, we analyze the market capitalization—the market value of outstanding shares for publicly traded biotechnology companies—and the number of publicly traded biotechnology companies, based on available data (Morrison, C., Lähteenmäki, R. Nat. Biotechnol. 33, 703–709 (2015), and company disclosures). In brief, the results can be explained in one word: growth.

Even in an environment of global growth for the market capitalization of publicly traded biotechnology companies, the United States remains the leader—far and away. In our 2015 issue, we reported that the U.S. market capitalization was roughly 4.8 times the ex-U.S. global total, and now it’s roughly 5.5 times the global total. Traditionally, Australia has shown the second-largest growth and had the second-largest market capitalization, but this past year the United Kingdom outshined Australia on both fronts. Although Australia added US$698 million to its biotechnology market capitalization, for a total of US$38 billion, the United Kingdom added a staggering US$17 billion, bringing the country’s biotechnology market capitalization to US$46 billion.

Despite those big numbers, the U.S. increase eclipses them, because U.S. companies added more than US$220 billion in market capitalization (roughly 1.5 times the ex-U.S. sum), for a total of US$887 billion. That makes the U.S. biotechnology market capitalization nearly 20 times that of the United Kingdom.

Although most countries show growth in this area, some don’t. Last year, Ireland was the only top 10 country to see a drop in its biotechnology market capitalization. This year, its number of public biotechnology companies dropped from three to one and its market cap has been decimated—dropping from US$6.4 billion to US$560 million.

Last year, we also reported an increase in the number of publicly traded biotechnology companies, and that trend continues. Compared to last year, the United States has 46 more publicly-traded biotechnology companies, an increase of about 17.5%. Other increases are scattered around the globe. Israel adds seven publicly traded companies, bringing its total to 18, which is an increase of more than 60%. France experiences close to 30% growth, adding six companies to bring its total to 28. For the United Kingdom, where the market capitalization of biotechnology companies grew by more than 60%, the number of publicly traded companies remains unchanged at 23. So this shows, yet again, that experts must explore the biotechnology landscape from a variety of angles to get the complete picture.

Number of Public Companies