Pharmaceuticals
Lavish windfall gains from biotechnological unicorns
Last update – March 2021
Sector rating

LOW RISK FOR ENTERPRISES
Fragmentation
Internationalization
Capital Intensity
Profitability
Strengths & weaknesses

- Medicine demand bolstered by growing middle classes in Emerging Markets and aging population as a whole
- Resilience of drug spending irrespective of economic cycle, coupled with huge public support for improving people’s healthcare needs
- High level of R&D expenditures (still) well covered by strong cash generation
- High level of R&D expenditure well covered by strong cash generation amid the pressing need for Covid-19 vaccines to reach herd immunity worldwide
- mRNA technology close to being a game-changer for the sector, especially in oncology treatments
- Venture capitalists and public investors’ appetite for investing in (listed) biotechnology firms

- Supply-chain disruptions due to states’ pressure to ‘reshore’ drug production within Western countries
- Lengthy procedures for new drug approvals on top of stiff price regulations
- Generic drug makers plagued with lower profit margins and higher debt gearing than patented drug ones
- Limited production capacities making it difficult to meet urgent delivery needs of all Covid-19 vaccines worldwide
- Bargaining power of India and China regarding vaccine production and delivery
Sector overview
Subsectors
Key players
Swipe to view more
Country | Role |
Sector risk |
|
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China |
#1 market by revenue |
![]() Low risk |
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United States |
#2 market by revenue |
![]() Medium risk |
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Switzerland |
#3 market by revenue |
![]() Low risk |
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India |
#4 market by revenue |
![]() Low risk |
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Germany |
#5 market by revenue |
![]() Low risk |
Contact
Marc Livinec
Allianz Trade
Allianz Trade