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HEALTHCARE INDUSTRY TO UNDERGO SIGNIFICANT CHANGES OVER NEXT 10 YEARS, HAMBRECHT & QUIST FORECASTS

 HEALTHCARE INDUSTRY TO UNDERGO SIGNIFICANT CHANGES
 OVER NEXT 10 YEARS, HAMBRECHT & QUIST FORECASTS
 SAN FRANCISCO, Jan. 6 /PRNewswire/ -- The coming decade will see continued growth for, and significant transformation of, the healthcare industry, it was forecast today at the opening of Hambrecht & Quist, Inc.'s 10th Annual Life Sciences Conference -- the largest investment conference focused on the life sciences industry. In particular, Hambrecht & Quist forecasts that by the year 2000:
 -- The market share of pharmaceutical companies within the healthcare sector would decline to 60 to 70 percent of the total from over 95 percent today as biotechnology companies increase their penetration of the business;
 -- Only half of the pharmaceutical industry's top 15 companies would retain their current industry ranking; and
 -- Strategic alliances between pharmaceutical and biotechnology companies would become much more favorably structured in the favor of biotechnology companies.
 The three-day conference consists of presentations to institutional investors and venture capitalists by 143 public and private companies in biotechnology, medical products, and healthcare and environmental services. More than 1,400 investment professionals are attending the conference.
 "The biotechnology industry has successfully completed the first phase in its development," stated David H. MacCallum, managing director of Healthcare. "What began a decade or so ago in academic laboratories in the United States and United Kingdom has caused and contributed to vast changes in the way medicine is practiced and health care is delivered around the world. The next phase -- which should take us to the year 2000 -- should be even more meaningful, with the biotechnology industry equalling the size of today's pharmaceutical industry."
 MacCallum added that in 1991, the $3 billion raised by the biotechnology industry equalled the total amount raised in the industry's history prior to 1991. "Financing, of course, is a necessary ingredient for growth," he said. "The lack of it, conversely, is an impediment. That has been overcome."
 Biotechnology companies achieved impressive growth last year, with sales reaching $4 billion, up from only $1 billion as recently as 1989. The industry could reach $60 billion in sales -- the current revenues of the pharmaceutical industry -- by the end of the 1990s, said D. Larry Smith, managing director of Life Sciences at Hambrecht & Quist.
 "Growth potential remains very impressive, despite the achievements to date," Smith added. "Not only will the industry benefit from the commercial realization of many advancements, it is important to note that many of these advancements -- which produced pronounced changes in much of the developed world -- have not even touched Africa or South America."
 Smith pointed out that Hambrecht & Quist expects the overall healthcare industry to continue to expand. In the medical products and environmental services sectors, he added, trends toward less invasive surgery, more outpatient centers and unaffiliated clinical laboratories have led to significant and very sustainable growth.
 The composition of the industry will also undergo significant changes. "The pie is going to be enlarged, from $125 billion today to $225 billion by the year 2000, but the growth rate of the pharmaceutical industry is slowly going to decelerate as biotechnology growth accelerates," he said. "As a result, the pharmaceutical share of the total could decline to 60 to 70 percent of the total from over 95 percent today."
 MacCallum added that, although the top 15 pharmaceutical companies today account for one-third of the industry's profits, he expects that only about half of them will retain their ranking at the end of the decade. "Some of the best of the big pharmaceutical concerns are struggling to bring themselves into direct contact with biotechnology," he said. "Only seven or eight may be able to adapt to the changes the industry will go through."
 Jacqueline G. Siegel, biotechnology analyst at Hambrecht & Quist, said she expects that, during this decade, increasingly novel and important technologies will emerge from the biotechnology industry, fueling new public offerings. In addition, the decade should highlight strategic alliances among large pharmaceutical companies and biotechnology concerns as well as corporate mergers such as those reached during 1991 by Genentech and Hoffman-LaRoche, Genetics Institute and American Home Products, and Systemics and Sandoz.
 Biotechnology companies have the largest representation at the conference, with almost one-third of the presenters coming from that industry. "Earlier skepticism has diminished as biotechnology has become scientifically validated," Smith said. "Now the numbers reflect the fact that the industry is becoming commercially validated as well."
 Founded in 1968, Hambrecht & Quist is the largest investment banking and securities firm focused on technology, life sciences and specialty services. The San Francisco-headquartered firm provides venture capital, corporate finance and corporate transaction services to emerging growth companies and provides investment and trading services to institutional, retail and international investors.
 -0- 1/6/92
 /NOTE TO EDITOR: A press briefing will be held on Monday, Jan. 6, at noon PST in the Elizabethan Room of the St. Francis Hotel, 335 Powell Street, San Francisco./
 /CONTACT: Michael Geczi, Karen Amrhine, or Benjamin Cheney, 415-774-0203 or 415-774-0213, or Caroline Luz, 212-557-0100, all of Ogilvy Adams & Rinehart, for Hambrecht & Quist/ CO: Hambrecht & Quist Inc. ST: California IN: MTC SU: ECO


SM -- NY019 -- 6786 01/06/92 09:41 EST
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