Only a Few Public Biotechs are Profitable, but There are More of Them Today

Inside BIO Industry Analysis

Of the 294 biotechs trading on public exchanges today, 248 (84%) focus on drug development. Of these 248 in the biopharmaceutical space, 81, or 33% have a drug approved.

Only 32 (13%) had both a product on the market and positive net income in 2011. However, this 13% represents a significant jump from the 7.5% with positive net income we calculated for 2009. Note that this comes over a time frame in which a few profitable companies were acquired and thus removed from the calculation (such as Genzyme, Cephalon, OSI).

In the last two years, companies such as Spectrum, Optimer, DepoMed, Ligand, Acorda, Jazz, ViroPharma, Vertex, Pozen, DUSA, Salix, and The Medicines Company, moved from negative net income in 2009 to positive net income in 2011.

Table 1 lists the 32. Four companies reported over $1 billion in net income. Less than half on this list have net income above $100M, which is only 4.8% of all drug developing biotechs:

Table 1. Biotech drug developers with an approved product and positive net income for FY 2011. Financial data from Factset.

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