SOURCE: JLL

JLL

August 17, 2015 11:00 ET

Global Biotech Firms Target New Locations in Emerging Markets

JLL's 2015 Life Sciences Outlook Report Identifies Top Global Destinations for Talent, Sales, Science and the Trends Driving International Growth

CHICAGO, IL--(Marketwired - Aug 17, 2015) - The expanding economies of Asia and Central and South America are providing fertile ground for middle-market pharmaceutical and biotechnology companies looking to grow. While multinationals fill their innovation pipelines in North America, branded and generic producers alike are extending their real estate footprints to reach new markets in Asia and South America, according to JLL's (NYSE: JLL) fourth annual Life Sciences Outlook Report.

"The challenge to stay nimble and respond to sales and manufacturing opportunities is shaping life sciences industry expansion in emerging economies around the world," said Roger Humphrey, Executive Managing Director and lead of JLL's Life Sciences group. "Those who can quickly secure sites and the right real estate in new markets will have a competitive advantage for years to come."

Branded products still dominate -- but the generics market is exploding in some locations

Branded pharmaceutical products generate revenues of $158.7 billion worldwide, dwarfing the global revenues of generic drugs, which stand at $44.5 billion. However, generic medicines are rapidly gaining market share thanks to a growing international focus on cost control. 

Therefore, emerging markets have become a promising source of growth for branded and generic products alike. India, for example, has experienced a surge in generic medicines and medical device production.

To compete with generic treatments, multinational pharmaceutical companies are investing in promising start-ups offering new drugs and biological medicines, or biologics for chronic conditions. Another strategy: conducting research on often-neglected "orphan" drugs for rare conditions.

JLL's 2015 Life Sciences Outlook Report  reviews the most promising global clusters, analyzes global trends and ranks the top U.S. life sciences clusters. Below are the leading emerging life sciences clusters around the world:

Global Clusters to Watch   Reason for Inclusion
Brazil   Brazil is the top medical device producer and the second-largest biotech crops producer in South America.
China   Given China's large population and low rates of insurance coverage, its biosimilars industry has become one of the world's strongest.
India   Population growth and an increase in chronic illness make India a strong export market, expected to grow 15 percent by 2020.
Indonesia   A growing middle class is supporting development of the life sciences industry. The medical device sector is projected to grow by 15 percent over the next year.
Israel   Tel Aviv is attracting international investment and fostering life sciences innovation, and has driven innovation through a new R&D park and incubators.
Mexico   An aging population, a growing middle class and better access to healthcare are increasing consumer demand for pharmaceutical products, with sales expected to rise from an estimated $16.4 billion in 2013 to $21.5 billion in 2018.
Russia   The domestic life sciences market will grow as the government continues to restrict imported drugs.
Singapore   As a global trading hub, Singapore is a major re-exporter of pharmaceuticals. Pharma sales are projected to grow 9.3 percent annually over the next four years. European and American pharmaceutical companies will continue to invest in Singapore as they seek new markets and a highly educated workforce.
South Korea   The government plans to invest $5.3 billion in the development of a life sciences hub in Osong Bio Valley.
Turkey   The creation of technology development zones that exempt pharma entrepreneurs from income tax until 2023 has driven R&D activity and attracted foreign investors.

Global competition for innovation heats up

The U.S. and Europe contend with competition from increasingly innovative emerging markets. Europe faces economic challenges and cuts to research funding in most major markets. And it is falling behind the U.S. and Asia in patent development. After a dip in life sciences patent applications in 2012, the U.S. slightly outpaced Japan in 2013 as a world leader in life sciences innovation.

However, Korea and China are steadily encroaching on the U.S. as innovation hubs. They are investing heavily in research parks to expand their life sciences sector. China is also attracting investment and operations from some major global companies spurring domestic start-ups.

"Countries in Asia are rapidly maturing as markets for drugs and biological medicines, but establishing new operations requires some caution," advised Humphrey. "Market dynamics and processes are considerably different in China or India, for example, than in the U.S. and Europe. And cultural differences require sensitivity in workplace and real estate strategies."

About the report

JLL's annual Life Sciences Outlook Report tracks geographic shifts in life sciences innovation, operations and facilities investments, including analysis of countries and cities most actively investing in their life sciences sectors. It includes a ranking of the top U.S. life sciences clusters, looks at global cities to watch and analyzes global trends. The complete findings of the 2015 Life Sciences Outlook Report are available in a dedicated microsite.

JLL's real estate experts help life sciences companies optimize and manage their real estate portfolios. The firm provides a comprehensive range of facilities management services to the life sciences community, managing 100 million square feet of research, manufacturing and office space, including GxP operations. Its industry-leading full-service platform includes integrated facilities management, engineering and operations, energy and sustainability, transaction advisory services, lease administration, project management and comprehensive laboratory services.

A leader in real estate outsourcing, JLL's Corporate Solutions business helps corporations and public institutions improve productivity in the cost, efficiency and performance of their national, regional or global real estate portfolios by creating outsourcing partnerships to manage and execute a range of corporate real estate services. This service delivery capability helps corporations improve business performance, particularly as companies turn to outsourcing of real estate activity as a way to manage expenses and enhance profitability.

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About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.

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