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Where will the economic crisis leave pharma and biotech?

Article Excerpt
The current economic downturn has been described as the worst since the Great Depression and no industry has been left unaffected. Pharma and biotech have more than most to be confident about, but this doesn't mean they will escape unscathed--especially smaller companies that are dependent on investment. For large companies, on the other hand, the situation presents numerous opportunities.

The World Bank has predicted that the global economy will shrink by nearly 3% in 2009. (1) Despite comparisons with the Great Depression, however, there is a belief that better policy mechanisms now exist to deal with a downturn. Although governments have struggled to react to the pace of events brought about by the economic crisis, this pressure has resulted in an unprecedented level of international cooperation. If the slowly improving performance of the US stock market is anything to go by, these efforts are beginning to have an effect and the worst of the recession may soon be over. (2)

A variety of predictions are circulating the media about how the situation is affecting pharma and biotech companies. Some observers believe the current conditions have had a negative effect on companies, (3) while others believe the opposite. (4) It is impossible to predict the course of action for every company, but even considering the inevitability of generalizations, the background attitudes of companies are very relevant to anticipating company strategies in the future. In extreme conditions, few companies would dare to completely change their strategic approach to business; most are likely to hold firmer to their...

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