Biotech now mature and global
By Linda Loyd
Philadelphia Inquirer
PHILADELPHIA — What a difference nine years can make.
In 1996, when the biotechnology industry last convened in Philadelphia, Centocor Inc. and Cephalon Inc. could have been cast as the past and future of the region's biotech industry.
Centocor was still rebuilding after its antibacterial drug failed in clinical testing, while Ceph-alon, which had been a Wall Street darling a year earlier, was struggling to get marketing approval for its treatment for Lou Gehrig's disease.
As the world's largest biotechnology convention returns to Philadelphia, the contrast between the two international conferences reflects the growth and changes in the industry. The conference opens today.
"Back in 1996-97, there were a lot of concerns by regulators and even the public as to what is biotech," recalled David Holveck, former Centocor chief executive officer and now head of Johnson & Johnson Development Corp. "We were battling an image problem as well as a lack of robust clinical data."
In 1996, the sequencing of the human genome seemed a distant dream. That landmark event was completed in 2002, and researchers from Australia will be discussing sequencing the kangaroo genome at the BIO 2005 meeting that starts here today.
Stem-cell research was "more of a glimmer in people's eye" back then, Holveck said. This week, six information sessions at BIO 2005 will be devoted to stem-cell topics.
The biotech industry worldwide in 1996 had a market capitalization of $83 billion, based on the value of company stock. At the time, Merck & Co. Inc.'s market cap was $80 billion, said Scott Morrison, head of U.S. Life Sciences at Ernst & Young L.L.P.
The two largest biotech companies, Genentech Inc. and Amgen Inc., now are each worth more than Merck, whose market value is $70.5 billion. Genentech's market cap is $87.7 billion, and Amgen's is $75.2 billion.
Morrison said the market cap of the entire industry is about $330 billion, 4 1/2 times that of Merck. "The biotech industry has really come of age," he said.
The reason? There are more products now.
Centocor president Julie McHugh said: "The past eight years or so has really seen a transition from an R&D-driven industry to delivering the promise of the R&D: actually getting products on the market."
