Released February 15, 2006 | HOUSTON
en
Reported by Annette Kreuger, Industrialinfo.com (Industrial Info Resources; Houston, Texas). An analysis of current project activity reveals that the North American Pharmaceutical-Biotech sector is poised to begin over $14 billion worth of projects in 2006. Drawn from data contained within Industrialinfo.coms Pharmaceutical Tracker - Online Database, this spending is currently spread over 320 active projects expected to begin construction this year. While this represents a slight decrease in the actual amount of projects from the 322 forecast for same time period in 2005, the total investment value of the projects actually increased from $13.5 billion to $14.7 billion. A look back to 2005 saw the industry beginning that year anticipating 336 North American projects carrying a value of $14.1 billion to start. A variety of factors impacted those projects, resulting in the 322 that actually got off the ground.
Click on the image at right to view the 2005 vs. 2006 Gap Measurement Analysis
As discussed in the new 2006 Pharmaceutical-Biotech Forecast, there are a variety of reasons for projects being delayed or cancelled, with the industry as a whole more cautious in its approach to spending. In addition to battling a maelstrom of bad press and demands for lower prices, pharma ranked only 28 out of the 42 industry groups tracked by Fortune in 2004. Its seven percent revenue growth rate from 2003 to 2004 was less than the Fortune 500 median growth rate of 10.3 percent. Like other industry groups facing slower growth, drugmakers are now forced to look at a number of cost-saving measures, including leaner production methods.
Spending in 2005 was spread throughout all of the North American regions, with the Great Lakes emerging as the somewhat surprising leader, with 54 projects valued at $2.8 billion scheduled to begin construction. The regions projects are a mix of both industry and university-based, and located in the states of Michigan, Wisconsin, Ohio, Illinois, Indiana and Kentucky. The University of Wisconsin continues to invest heavily in new life science research facilities, a trend that is expected to continue well over the next decade. Private industry also likes the region, including such companies as Bedford, Ohios Ben Venue Laboratories. The company, a contract manufacturer of liquid and lyophilized sterile products, has chosen to grow in place rather than moving. When the companys current round of expansions is complete, it has plans for an entire new facility.
While 2006 project activity for the region isnt quite as strong, there is currently a healthy $1.8 billion worth of spending planned for 49 projects. The region took a hit with the sale of Guidant, as Indianapolis was the favored choice for a new $100 million manufacturing plant.
Click on the image at right to view the 2006 Planned Spending
Chart
Not unexpectedly, the Mid-Atlantic region was not far behind the Great Lakes in 2005 project activity. With 40 projects, carrying a value of $2.5 billion, expected to begin construction in during the year. Gaining momentum for 2006, the Mid-Atlantic region and its states of North Carolina, South Carolina, Maryland, Virginia and West Virginia, jumped to 53 projects on the books tallying up to $3.9 billion. Always a solid investment leader, in addition to the strong presence of big pharma in North Carolina, the region boasts strong spending at the huge federal laboratory sites in Maryland. The state also rejoiced when MedImmune decided not only to stay in the state but also to map out capital investment plans that could eventually top $400 million.
As 2006 is still in its infancy, the final picture is yet to be revealed. New projects will be added and others will undoubtedly change in scope and value. This beguiling and often infuriating industry is full of promise as new drugs work their way through clinical trials. Those drugs obtaining approval will need facilities built or expanded in order to be manufactured, packaged and distributed. And the eternal quest to feed the new product pipeline ensures continuing investment in research facilitates, encompassing everything from drug development to clinical studies.
Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.
Click on the image at right to view the 2005 vs. 2006 Gap Measurement AnalysisAs discussed in the new 2006 Pharmaceutical-Biotech Forecast, there are a variety of reasons for projects being delayed or cancelled, with the industry as a whole more cautious in its approach to spending. In addition to battling a maelstrom of bad press and demands for lower prices, pharma ranked only 28 out of the 42 industry groups tracked by Fortune in 2004. Its seven percent revenue growth rate from 2003 to 2004 was less than the Fortune 500 median growth rate of 10.3 percent. Like other industry groups facing slower growth, drugmakers are now forced to look at a number of cost-saving measures, including leaner production methods.
Spending in 2005 was spread throughout all of the North American regions, with the Great Lakes emerging as the somewhat surprising leader, with 54 projects valued at $2.8 billion scheduled to begin construction. The regions projects are a mix of both industry and university-based, and located in the states of Michigan, Wisconsin, Ohio, Illinois, Indiana and Kentucky. The University of Wisconsin continues to invest heavily in new life science research facilities, a trend that is expected to continue well over the next decade. Private industry also likes the region, including such companies as Bedford, Ohios Ben Venue Laboratories. The company, a contract manufacturer of liquid and lyophilized sterile products, has chosen to grow in place rather than moving. When the companys current round of expansions is complete, it has plans for an entire new facility.
While 2006 project activity for the region isnt quite as strong, there is currently a healthy $1.8 billion worth of spending planned for 49 projects. The region took a hit with the sale of Guidant, as Indianapolis was the favored choice for a new $100 million manufacturing plant.
Click on the image at right to view the 2006 Planned Spending
ChartNot unexpectedly, the Mid-Atlantic region was not far behind the Great Lakes in 2005 project activity. With 40 projects, carrying a value of $2.5 billion, expected to begin construction in during the year. Gaining momentum for 2006, the Mid-Atlantic region and its states of North Carolina, South Carolina, Maryland, Virginia and West Virginia, jumped to 53 projects on the books tallying up to $3.9 billion. Always a solid investment leader, in addition to the strong presence of big pharma in North Carolina, the region boasts strong spending at the huge federal laboratory sites in Maryland. The state also rejoiced when MedImmune decided not only to stay in the state but also to map out capital investment plans that could eventually top $400 million.
As 2006 is still in its infancy, the final picture is yet to be revealed. New projects will be added and others will undoubtedly change in scope and value. This beguiling and often infuriating industry is full of promise as new drugs work their way through clinical trials. Those drugs obtaining approval will need facilities built or expanded in order to be manufactured, packaged and distributed. And the eternal quest to feed the new product pipeline ensures continuing investment in research facilitates, encompassing everything from drug development to clinical studies.
Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.
