Countries within the APAC community are heavily dependent on export earnings from major markets in the US and EU – collapsing demand in these countries is decreasing revenue flows into the region.
Frost & Sullivan, Senior Vice President of Healthcare Asia Pacific Reenita Das anticipates, "the economy will continue to decline in the first half of 2009 and will stage a modest recovery in the first half of 2010. The biotechnology sector is a diverse sector, and the economic crisis has had a disproportionate impact on different parts of this sector.
"Das further elaborates, "The biotech industry is expected to continue to grow by about 10 to 15 percent globally reaching USD271 billion by 2011. The healthcare segment is the largest contributor to the overall Biotechnology sectors revenues (62.6 percent in 2007). Bio-agriculture is the second largest segment, accounting for 11.5 percent of total revenues. Others include areas such as bio-fuels and industrial biotechnology.
"Having said the above, activities in the bio-fuels sectors have declined substantially while the healthcare biotechnology sector has declined by a modest amount relative to the global economy.
As a result, 2009 will continue to pose challenges to the region life sciences company that are in the development stage due to the limited capital availability. The global pharmaceutical industry is facing an unprecedented opportunity. Over the next decade by 2020, the pharmaceutical market will double in size reaching USD1.3 trillion to meet the medical needs of the aging global population and a surge in demand from emerging countries.
"It is said that the overall revenue in the biotechnology is expected to grow continuously on a yearly basis. In 2005-2006 there was a 12.6 percent increase in global biotechnology revenues," said Das.
Biotechnology is a diverse sector and contain key areas that are less exposed to shifts in consumer demand. The current crisis will slow the growth of the global biotechnology sector but this will not change its long term optimistic outlook. A renewed focus on the sector is critical as several key Malaysian exports are highly dependent on continued consumer spending by western consumers.
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