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ESTEL APITAL
Creating a Better Future
Industry Structure and Business Models for Industrial Biotechnology
Research Methodology and Results for Discussion
FC
OECD Workshop on the Outlook on Industrial Biotechnology
ESTEL
Creating a Better Future
Vienna, January 14, 2010 ©2010 2010FESTEL FESTEL CAPITAL © CAPITAL
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Copyright and Disclaimer
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Creating a Better Future
Copyright • All rights for the use of all or parts of the information in this document, including reprinting the whole document or parts thereof, the storage in databanks and translations remain with FESTEL CAPITAL
• Individual charts can be reproduced stating FESTEL CAPITAL as source; please contact FESTEL CAPITAL, should you wish to reproduce larger parts of this document
Disclaimer • FESTEL CAPITAL has prepared this document to the best of FESTEL CAPITAL„s knowledge and belief based on all available information • FESTEL CAPITAL takes no warranty for the accuracy and completeness of this information • Before deducting individual conclusions, it is necessary to obtain additional data and conduct further analyses • Therefore, all liability for costs or damage resulting from information and conclusions in this document is excluded
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Contents
1
Goals and Objectives
2
Research Methodology
3
Research Results
4
APITAL
Creating a Better Future
3.1
Industry Trends
3.2
Market Structure
3.3
Market Players
3.4
Business Models
Conclusion and Outlook
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Goals and Objectives - Aspects
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Creating a Better Future
The paper gives an overview of current industrial biotechnology industry structure and business models with special focus on innovation General aspects • Drivers and barriers for industrial biotechnology • Size and growth of industrial biotech markets • Characteristics and importance of market players
• Established and emerging business models for companies • Growth strategies for industrial biotech companies • Major trends and outlook for the most important sectors • Recommendations including issue list for next steps
Special aspects • Constraints of industry capacity for performing R&D or absorbing new technologies • Dependence of large firms dependent on innovations from smaller companies
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Contents
1
Goals and Objectives
2
Research Methodology
3
Research Results
4
APITAL
Creating a Better Future
3.1
Industry Trends
3.2
Market Structure
3.3
Market Players
3.4
Business Models
Conclusion and Outlook
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Research Methodology - Approach
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Creating a Better Future
A structured research approach using the existing FESTEL CAPITAL database was used to prepare the paper for further discussion Data sources
FESTEL CAPITAL database
• Interviews with industrial companies, research institutions and investors
• Open discussions with key market players
- Sales per segment/subsegment - Capital requirements for R&D and infrastructure
Paper(s)
• Desk research (company information, external market studies, press clippings)
• Excel calculation model with data between 2003 and 2009
Five market studies with with focus on special industrial biotech areas
Additional desk research in October and November 2009 was performed using typical key words to find relevant information Innovations in industrial biotechnology as focus topic of the Working Group Start-ups within the Chair of Technology and Innovation Management (Prof. Dr. Roman Boutellier) © 2010 FESTEL CAPITAL
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Research Methodology - Data Sources
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Creating a Better Future
Starting point was the existing FESTEL CAPITAL database with relevant data which has been built up between 2003 and 2009 • About 50 interviews with managers and experts from industrial biotech companies as well as additional interviews with experts from research institutions and the investment area - Various rounds during the past 6 years - Semi-structured nature to the interviews • Periodical desk research using public sources (e.g. business databases) and company disclosures (e.g. websites and press releases) • Open discussions with persons from the industry to clarify open questions, which could not be answered using other sources
More than 150 industrial biotechnology companies were analysed through desk research, interviews or open discussions with FESTEL CAPITAL Additional desk research in October and November 2009 was performed using typical key words to find relevant information
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Research Methodology - Regions
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Four main regions are analysed to present and discuss the key insights and indicators in the paper • Europe: EU-27 countries, whereby all of the larger countries are OECD members, and Switzerland which is also an OECD member • North America: NAFTA members Canada, Mexico and United States of America which are all OECD members • Asia: With China and India as well as including the OECD member states Australia and Japan • Rest of the world: All other countries not covered by the other categories A separate category with the BRIC countries is currently not possible as the FESTEL CAPITAL database does not yet fully include this category
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Contents
1
Goals and Objectives
2
Research Methodology
3
Research Results
4
APITAL
Creating a Better Future
3.1
Industry Trends
3.2
Market Structure
3.3
Market Players
3.4
Business Models
Conclusion and Outlook
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Industry Trends - Drivers
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Creating a Better Future
The fast technological development within industrial biotechnology is a driver for industrial biotechnology Fast technological development • Technological development progressing at an enormous rate - Development of basic technologies (e.g. directed evolution, genetical modification tools) - Development of tailormade and high performance enzymes (especially in the number of available enzymes) - Improvement of efficiency through new developments in reactor and process design • Implementation of new applications for existing and new enzymatic systems • Increasing production of high-value products, such as nutraceuticals, cosmeceuticals and performance chemicals
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Industry Trends - Drivers
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Creating a Better Future
The need for sustainable development as well as the ongoing globalisation is a driver for industrial biotechnology Need for sustainable development • Consumers increasingly conscious about the impacts of their consumption and choosing products with low negative impact on the environment (e.g. low-carbon economy) • Need for a switch to clean and sustainable processes using renewable resources as a sustainable raw material basis • Contributes to the sustainable development of established industries as well global economy • Biomass-derived energy based on biotechnology expected to account for an increasing share in energy consumption Ongoing globalisation • Global competition drives companies to biotech routes, especially in Europe and the US • Processes to sustain competitiveness especially regarding Asian challenges • Reduction of trade barriers towards global biotech markets (e.g. for biofuels) © 2010 FESTEL CAPITAL
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Industry Trends - Barriers
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Creating a Better Future
High investment and production costs as well as critical raw material prices and limited availability are barriers facing industrial biotechnology High investment and production costs • Restrictions of biotechnological production processes from an economic viewpoint - High investments in R&D and process development - Massive new investments to build new production facilities
• Higher prices for products from biotechnology processes normally not achievable Cyclical raw material prices and limited availability • Almost 1:1 correlation of crude oil and biomass prices during the last years so no general cost advantages of bio-based routes • Hope that biomass shows less cyclicality compared to crude oil prices has not been realised • Rising food and feed demand is a critical driver and a significant limitation on the uptake of industrial biotechnology (especially in debates around biofuels, land use has been a controversial issue) © 2010 FESTEL CAPITAL
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Industry Trends - Barriers
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Creating a Better Future
Complex innovation processes as well as critical social acceptance and regulations are barriers facing industrial biotechnology Complex innovation processes • Industrial biotechnology know-how mainly used in the early stages of the value chain • Specialised companies cover normally only a small share of the value-added along the value chain
• Combination of “technology push” and “market pull” along the value chain necessary Critical social acceptance and regulations • Social acceptance of industrial biotechnology normally high but some regions still have rather a low acceptance of genetically modified organisms - in the field of genetic engineering considerably more bureaucracy and legislation • Problem accepting green biotechnology, especially in Europe, has a direct impact on industrial biotechnology - Growth depends very much on the development of green biotechnology - Green and industrial biotechnology often combine to an integrated value chain © 2010 FESTEL CAPITAL
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Contents
1
Goals and Objectives
2
Research Methodology
3
Research Results
4
APITAL
Creating a Better Future
3.1
Industry Trends
3.2
Market Structure
3.3
Market Players
3.4
Business Models
Conclusion and Outlook
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Market Structure - Sales per Segment
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Creating a Better Future
Sales of products made by biotechnological processes in 2007 was around 48 billion Euro = 3,5% of total chemical sales Chemical sales per segment 2007 100% = 1,383 billion Euro
Biotech sales1) per segment 2007 100% = 48 billion Euro
3,9%
21,2%
14,5%
25,3%
18,7% of active pharma ingredients
22,4%
59,2%
1,5% of base chemicals
4,8% of specialty chemicals
22,5% 5,4% of consumer chemicals
31,0%
Base chemicals
Specialty chemicals
Base chemicals
Specialty chemicals
Consumer chemicals
Active pharma ingredients
Consumer chemicals
Active pharma ingredients
1) Sales of chemical products made by biotechnological processes and not chemical processes Source: CEFIC Facts & Figures January 2009, FESTEL CAPITAL database © 2010 FESTEL CAPITAL
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Market Structure - sales per Sub-segent
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Creating a Better Future
The most important sub-segments in 2007 were active pharma ingredients and cosmetics Biotech sales per sub-segment 2007 100% = 48 billion Euro 3,5 3,0 2,5 2,0 1,5 1,0 0,5
Europe (EU-27)
North America (NAFTA)
Asia (incl. China and Japan)
in gr ed ie nt s
Ac
tiv e
ph ar m a
C
os m et ics
et er ge nt s D
ic al s ch em
sp ec ia lty
ad di tiv es O
th er
Fo od
Pa in ts
&
co at in gs
se al an ts &
Ad he si ve s
ch em ic al s
es
Ag ro
fib r & er s
Po ly m
rg an ic
ch em ic al s
ga se s & O
Fe rti li s er s
An or
ga ni cs
0,0
Rest of the World
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Market Structure - Sales per Region
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Creating a Better Future
There is no significant difference in the regional split of chemical sales and biotech sales Chemical sales per region 2007 100% = 1,383 billion Euro
Biotech sales1) per region 2007 100% = 48 billion Euro 9,8%
10,4% 29,5%
30,0%
35,9%
37,9%
22,2%
24,3%
Europe (EU-27)
North America (NAFTA)
Europe (EU-27)
North America (NAFTA)
Asia (incl. China and Japan)
Rest of the World
Asia (incl. China and Japan)
Rest of the World
1) Sales of chemical products made by biotechnological processes and not chemical processes Source: CEFIC Facts & Figures January 2009, FESTEL CAPITAL database © 2010 FESTEL CAPITAL
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Contents
1
Goals and Objectives
2
Research Methodology
3
Research Results
4
APITAL
Creating a Better Future
3.1
Industry Trends
3.2
Market Structure
3.3
Market Players
3.4
Business Models
Conclusion and Outlook
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Market Players - Company Types
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Creating a Better Future
There are different company types active in the industrial biotechnology area Company types and examples
High
Dedicated start-ups
Importance of industrial biotechnology
Dedicated SMEs
Diversified SMEs
Diversified MNEs
Low
Small © 2010 FESTEL CAPITAL
Dedicated MNEs
Company Size
Large www.festel.com
Company type
Examples
Dedicated start-ups
Autodisplay Biotech Evocatal Fluxome Sciences
Dedicated SMEs
AB Enzymes Brain Codexis Iogen Stern Enzym
Diversified SMEs
Döhler Siegfried Südzucker
Dedicated multinationals
CSM/Purac Lesaffre Novozymes
Diversified multinationals
BASF Danisco DSM 18
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Market Players - Further Development
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Creating a Better Future
Especially dedicated companies are important for the further development of industrial biotechnology Further development of industrial biotechnology
Dedicated MNEs
Very important
Commercial development
Diversified SMEs
Diversified MNEs
Dedicated SMEs
• Dedicated and diversified MNEs are by far the most important groups in terms of biotech sales and R&D budgets • Dedicated and diversified SMEs are driving especially the commercial development • The commercial development is also driven by dedicated MNEs
Dedicated start-ups
Less important
Less important © 2010 FESTEL CAPITAL
Technological development
Very important
• Dedicated start ups are contributing significantly to the further technological development
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Market Players - MNEs
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Creating a Better Future
Dedicated and diversified MNEs are by far the most important groups in terms of biotech sales and R&D budgets Dedicated MNEs • Companies mainly active in the area of natural products (e.g. CSM/Purac, Lesaffre) and also sub-type of high-tech oriented companies (e.g. Novozymes) • Industrial biotechnology is one cornerstone in their technology portfolio • They are increasingly moving towards more sophisticated products and processes • They will significantly drive the technological and commercial development of industrial biotechnology Diversified MNEs
• Mainly established companies from the chemical industry (e.g. BASF, DSM), agro industry (e.g. ADM, Cargill) or food industry (e.g. Danisco) • Broad and integrated technology portfolio which is complemented by industrial biotech processes
• Competition between industrial biotechnology and traditional technologies compared to other company types which slows down development © 2010 FESTEL CAPITAL
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Market Players - SMEs
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Creating a Better Future
Dedicated and diversified SMEs are driving especially the commercial development of industrial biotechnology Dedicated SMEs • Focused on building up own production facilities and selling their products (e.g. Brain and Codexis) • Core for the further technological and commercial development of an independent industrial biotechnology sector Diversified SMEs • Mainly located in established industrial sectors like the chemical or food industry (e.g. Döhler and Siegfried)
• Introducing step by step biotechnology processes and products into their markets • Especially drive the commercial development of industrial biotechnology
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Market Players - Start ups
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Creating a Better Future
Dedicated start ups are contributing significantly to the further technological development of industrial biotechnology Dedicated start ups • Start-up companies focused on industrial biotechnology which are mainly driven by R&D (e.g. Evocatal, Fluxome Sciences) • Development and commercialisation of special technologies and their applications • Also targeted red biotechnology, but with increase in maturity of companies (e.g. Direvo Industrial Biotechnology, Eucodis Bioscience) the businesses are separated • Expected to contribute significantly to the further technological development of industrial biotechnology
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Contents
1
Goals and Objectives
2
Research Methodology
3
Research Results
4
APITAL
Creating a Better Future
3.1
Industry Trends
3.2
Market Structure
3.3
Market Players
3.4
Business Models
Conclusion and Outlook
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Business Models - Established
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Creating a Better Future
Established business models within industrial biotechnology focus on production and service Producers • Realised mainly by diversified SMEs as well as dedicated and diversified MNEs • Develop own technologies or buy/license them and focus on production including the whole supply chain from raw materials to distribution • Most service oriented dedicated SMEs are currently in the phase of going into this business model as it offers more growth options • High capital requirements to build-up own production facilities are a disadvantage Service providers
• Mostly dedicated start-ups and some dedicated SMEs offering their particular know-how predominantly as services to support other companies • Normally realise primarily organic growth and are profitable, but have sub-critical structures with regard to size and financial strength (unable to realise growth opportunities due to a lack of financial resources)
• IP normally belongs to the customer and growth or value creation potential through development and commercialisation of own IP is very limited © 2010 FESTEL CAPITAL
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Business Models - Emerging
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Creating a Better Future
IP oriented business models are emerging besides the established business models Emerging business models • Emerging business models include the IP creator and the integrated process developer • Focus on the development of own IP and licensing business • Development of own portfolios of technologies and products which are sold or out-licensed
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Business Models - Growth Strategies
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Creating a Better Future
Companies have four different potential growth strategies to move from a service-oriented to an IP-oriented business model Growth strategies for industrial biotech companies Strategy Description New
M&A
R&D co-operations
Internal R&D
Own R&D with primarily internal resources
R&D cooperations
R&D together with external partners (other companies, universities and R&D institutes)
Joint ventures
Formation of a new company where parent companies have ownership and contribute complementary assets, technologies, people or other capabilities
M&A
Acquisition of or merger with another company to create a single new entity
Technologies
Internal R&D
Established
Established © 2010 FESTEL CAPITAL
Joint ventures
Markets
New
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Contents
1
Goals and Objectives
2
Research Methodology
3
Research Results
4
APITAL
Creating a Better Future
3.1
Industry Trends
3.2
Market Structure
3.3
Market Players
3.4
Business Models
Conclusion and Outlook
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Conclusion and Outlook - Markets
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Creating a Better Future
The largest market potential lies in the production of fine chemicals for the pharma and agro industry, biopolymers and biofuels Sector
Fine Chemicals
Polymers
Specialty Chemicals
Base Chemicals and intermediates
Biofuels
© 2010 FESTEL CAPITAL
Outlook
Major trends • Growing importance of chiral active pharmaceutical ingredients • Cost reductions through simplified synthesis paths (especially if molecules are complex) • Only through biotechnological processes accessible products • Stronger use of renewable raw materials due to cost reasons • Access to polymers with new properties (e.g. biodegradability) • Increasing regulatory pressure to realise sustainable solutions (e.g. for packaging applications) • Strong growth in industrial enzymes for more and more applications • Increasing advantages of enzymatic processes especially in the food, cosmetic, textile and leather industries due to customer requirements • Stronger use of renewable raw materials due to cost reasons • Cost advantages of biotech processes due to the stricter regulatory environment • Increasing advantage due to rising oil prices and climate change • Significant progress in production technologies with increasing cost competitiveness without subsidies www.festel.com
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Conclusion and Outlook - Players
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Creating a Better Future
There are three groups of industrial companies which can be targeted by policy makers with different approaches • Dedicated start-ups and SMEs: Provide incentives to foster growth based on R&D based innovations • Diversified SMEs: Provide incentives to enable the usage of biotech technologies in established production processes • Dedicated and diversified MNEs: Provide incentives to support market introduction and penetration of biotech products
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Conclusion and Outlook - Relevant Data
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Creating a Better Future
Suitable key indicators could be production/sales figures differentiated for the different company types as key indicators Availability of relevant data Company types
Production/sales figures
• Production and sales figures for 2007, 2012 and 2017
• Structure of the industrial biotech companies
- Per segment/sub-segment
- Size
- Per region/country
- Growth
• Rough data are available from FC
- Business model • Currently no consistent data available
Clear and consistent structure necessary Structure of FC database (modified CEFIC structure) as starting point
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Conclusion and Outlook - Issue List
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Creating a Better Future
The issue list regarding the need for further research and the definition of next steps can help to improve the paper Need for further research • Better understanding of the development of production technologies in the different sectors, segments and sub-segments • Better understanding of the specific impact of raw material supply and prices Definition of next steps • Agree on data structure (production and sales figures, description of industrial biotech companies) to enable an OECD wide comparison
• Agree on data collection and processing process • Agree on suitable key indicators to get relevant information for policy makers
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Backups
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Backups
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Research Methodology - Interviews
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Creating a Better Future
More than 150 industrial biotechnology companies were analysed through desk research, interviews or open discussions with FESTEL CAPITAL (1/2) Company AB Enzymes Abitep AC Biotec Aglycon Mycoton AlgMax Alligator Bioscience Alvito Biotechnologie Amino Amyris Biotechnologies
Dr x x x x x x x x x
Si
x
Od Company x Ciba SC Clariant c-LEcta CMC Biopharmaceuticals x Codexis Cognis CSM Biochemicals Direvo Industrial Biotech Diversa
Dr x x x x x x x x x
AnalytiCon Discovery
x
Döhler
x
AnBio
x
Dow Chemical
x
Angel Biotechnology Animox Anoxymer Arrayon Biotechnology Artechno Artes Biotechnology ASA Spezialenzmye ATG Biosynthetics Autodisplay Biotech BASF Bayer BayGenetics BBT Biotech Beiersdorf Beldem
x x x x x x x x x x x x x x x
Dr. Petry Genmedics Dr. Rieks DSM DSM Biotech DuPont E.gene Biotech EKB Technologies Enzis EnzyScreen ESBATech Essum Eucodis EuroFerm Evocatal Evonik Degussa
x x x x x x x x x x x x x x x
x
x
x x
x
x
x x x x x
Si x
Od x x x
x
x x x
Company Lonza LS9 Lybradyn Lyven m2p-labs Maxygen Meiji Merck Metabolix Molekulare Biotechnologie
x
x x
x x
x
x
x
x x
Munich Innovative Biomaterials MykoMax Nadicom Nexia Biotechnologies Nexyte Nordzucker Novacta Novamont Novozymes N-Zyme Biotec OrganoBalance Pacovis Panolin Petroplast Vinora Pfeifer & Langen Phenion
Dr x x x x x x x x x
Si x
Od x
x
x
x
x x
x x x x x x x x x x x x x x x x x
x x
x x x x
Abbreviations: Dr = Desk research, Si = Standardised interview, Od = Open discussion © 2010 FESTEL CAPITAL
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Research Methodology - Interviews
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Creating a Better Future
More than 150 industrial biotechnology companies were analysed through desk research, interviews or open discussions with FESTEL CAPITAL (2/2) Company Biocatalysts Bioconsens Biolac Biomay Biomer Biométhodes Biomeva Bionova Bioreact
Dr x x x x x x x x x
Bioressources Worlwide
x
Biospring Biosynergy Biotec BIOTex Biovet Biovian Bioworx Biozym Bitop
x x x x x x x x x
BlueBioTech
x
Brain BTR Laboratories Butalco Celanese Cerestar ChiPro
x x x x x x
Si
x
x
Od Company FermenSys Galactic Ganomycin Gevo Green Biologics Greenovation Biotech Gyre HöFer Bioreact HPC Biotec
x
x
x
x x
x x x
Dr x x x x x x x x x
Si
Hycail
x
x
IEP IFB Halle Industrial Biotechnology Ingenza Innovia Films Inosim Insilico Invigate Iogen
x x x x x x x x x
Jülich Chiral Solutions
x
Jülich Enzyme Products Jülich Fine Chemicals Kerry Bio Science Lehmann & Voss Lesaffre Libragen
x x x x x x
x
x
x
x x x
Od Company Plantic PomBioTech Procter & Gamble x Prokaria Protéus Rheinchemie Roche Diagnostics Roquette Schill & Seilacher Scientific Research and Development x Senomyx Sourcon-Padena Stern Enzym Subitec Süd-Chemie Südzucker x Total Trenzyme x Treofan W42 Industrial Biotechnology Wacker Chemie Wentus Weyl Chem X2 Biotechnologies x X-Zyme Zymeworks
Dr x x x x x x x x x
Si x x x x x x x
x x x x x x x x x x
Od
x
x
x x x x
x x x
x
x x x x x x x
x x
x
Abbreviations: Dr = Desk research, Si = Standardised interview, Od = Open discussion © 2010 FESTEL CAPITAL
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Research Methodology - Market Studies
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Creating a Better Future
Already existing data of FESTEL CAPITAL and additional desk research were used for data gathering FESTEL CAPITAL database
FESTEL CAPITAL market studies
• Desk research (company information, external market studies, press clippings)
• Biotech production technologies (November 2003)
• Interviews with industrial companies, research institutions and investors
• Financing strategies (April 2005)
• Excel calculation model based on available information with specific adjustments
Market data updated regularly based on ongoing discussions with key market players © 2010 FESTEL CAPITAL
• Renewable raw materials (July 2005) • Biofuel production technologies (October 2006)
• Financing and investment trends (February 2009)
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Industry Trends - Barriers
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Creating a Better Future
The combination of “technology push” and “market pull” along the value chain is necessary Yeast genetics and synthetic biology =
"Technology Push"
6 Step 1 Feedstock Supply
5 Step 2 Cellulose Hydrolysis
4 Step 3 Biofuel Fermentation
3 Step 4 Biofuel Purification
Innovation
2 Step 5 Engineering/ Construction
1 Step 6 Biofuel Production
Rising oil prices and decreasing security of supply =
"Market Pull"
Innovation
The biofuel producer identifies new fermentation technologies and develops the fermentation
1 technology together with a biotechnology company
The biofuel producer develops together with a engineering / plant construction company the plants a
2 technical scale processes
The engineering / plant construction company develops together with specialised downstream
3 processing company a biofuel purification process
The downstream processing company develops with the biotechnology company the combined
4 fermentation / purification process
5 The biotechnology company develops with the hydrolysate supplier the hydrolysis process 6 The hydrolysate supplier organises the feedstock supply © 2010 FESTEL CAPITAL
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Market Structure - Biotech Sales 2012
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Creating a Better Future
Sales of products made by biotechnological processes in 2012 will be around 135 billion Euro = 7,7% of total chemical sales Chemical sales per segment 2012 100% = 1,748 billion Euro
Biotech sales1) per segment 2012 100% = 135 billion Euro
5,3%
23,0%
15,8%
24,9%
33,7% of active pharma ingredients
55,3%
3,5% of base chemicals
11,7% of consumer chemicals
23,7%
9,1% of specialty chemicals
24,0% 28,0%
Base chemicals
Specialty chemicals
Base chemicals
Specialty chemicals
Consumer chemicals
Active pharma ingredients
Consumer chemicals
Active pharma ingredients
1) Sales of chemical products made by biotechnological processes and not chemical processes Source: CEFIC Facts & Figures January 2009, FESTEL CAPITAL database © 2010 FESTEL CAPITAL
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Market Structure - Biotech Sales 2012
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Creating a Better Future
The most important sub-segments in 2012 will be active pharma ingredients and cosmetics Biotech sales per sub-segment 2012 100% = 135 billion Euro 14,0 12,0 10,0 8,0 6,0 4,0 2,0
Europe (EU-27)
North America (NAFTA)
Asia (incl. China and Japan)
Ac
tiv e
ph ar m a
C
in gr ed ie nt s
os m et ics
ge nt s et er D
ch em Ad ic he al s si ve s & se al an Pa ts in ts & co at in gs Fo od O th ad er di sp tiv es ec ia lty ch em ic al s
es
Ag ro
fib r & er s
Po ly m
ch em ic al s
ga se s
rg an ic
& O
tili se rs Fe r
An or
ga ni cs
0,0
Rest of the World
Source: FESTEL CAPITAL database © 2010 FESTEL CAPITAL
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Market Structure - Biotech Sales 2017
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Creating a Better Future
Sales of products made by biotechnological processes in 2017 will be around 340 billion Euro = 15,4% of total chemical sales Chemical sales per segment 2017 100% = 2,212 billion Euro
Biotech sales1) per segment 2017 100% = 340 billion Euro 10,0% of base chemicals
6,6%
20,5% 17,1%
47,9% of active pharma ingredients
33,3%
51,3% 13,1% of specialty chemicals
24,8% 22,3% of consumer chemicals
25,0%
21,4%
Base chemicals
Specialty chemicals
Base chemicals
Specialty chemicals
Consumer chemicals
Active pharma ingredients
Consumer chemicals
Active pharma ingredients
1) Sales of chemical products made by biotechnological processes and not chemical processes Source: CEFIC Facts & Figures January 2009, FESTEL CAPITAL database © 2010 FESTEL CAPITAL
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FC
ESTEL
Market Structure - Biotech Sales 2017
APITAL
Creating a Better Future
The most important sub-segments in 2017 will be active pharma ingredients and polymers & fibres Biotech sales per sub-segment 2017 100% = 340 billion Euro 30,0 25,0 20,0 15,0 10,0 5,0
Europe (EU-27)
North America (NAFTA)
Asia (incl. China and Japan)
ph ar m a
in gr ed ie nt s
os m et ics C tiv e Ac
ge nt s et er D
An or ga ni Fe cs rti li s er s & ga O se rg s an ic ch em ic al Po s ly m er s & fib re s Ag ro ch em Ad ic he al s si ve s & se al an Pa ts in ts & co at in gs Fo od O th ad er di sp tiv ec es ia lty ch em ic al s
0,0
Rest of the World
Source: FESTEL CAPITAL database © 2010 FESTEL CAPITAL
www.festel.com
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ESTEL
Business Models - Growth Strategies
APITAL
Creating a Better Future
The different growth strategies have specific advantages and disadvantages from an entrepreneurial view Strategy Internal R&D
Advantages
Disadvantages
• Enables the development of own IP
• Cost and capital intensive
• Start-up decides on R&D projects
• High project risk
• Increased flexibility on project choice and research goals • Limited research capacities prevent a fast reaction concerning new projects • Lack of networks that provide new ideas with regard to the research
R&D co-operation
• Increases number of possible technologies available for R&D projects
• Need for a strong project management • Limited possibility of development of own IP
• Additional resources and synergies • Splitting the risk of the project • Rarely receive considerable volume of IP developed in the project (often the case with academic partners)
Joint Venture
M&A
• Enables growth in a new business area • Additional resources (e.g. assets, technologies)
• The time involved for negotiations and contract development is high
• Synergies of complementary technologies and knowhow
• An inflexible co-operation model, where the search for the appropriate partner is critical
• Enables use of synergies
• Loss of control in the company
• Enables expansion into new markets / international markets
• Loss of flexibility in the decision making process
• Enables acquisition of IP and technologies
© 2010 FESTEL CAPITAL
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