Weak U.S. Dollar Good for Biotechs!
I ran across an article at thestreet.com written by Althea Chang. She makes a very important yet often forgotten point; biotechnology companies generally do well in a weakening U.S. dollar environment, at least those companies with international sales.
Analysts at Thomas Weisel Partners suggested that many of the larger biotechs, those with a relatively larger international revenue stream, will benefit the most. In fact, it is stated that 31% of all large biotechs' sales are generated outside the U.S.! That is a significant number.
Large biotechs that should not be affected substantially by a weakening U.S. dollar include;
Amgen (AMGN) - 18% of sales from other nations
Biogen Idec (BIIB) - 40%
Genentech (DNA) - 16%
Genzyme (GENZ) - 45%
Gilead (GILD) - 53%
So why do big American biotechs have such large interest in international sales?
It has to do with the regulatory environment. It is well debated that the U.S. regulatory approval process is by far more strict than other countries, including European nations.
It is not unusual to see biotech companies get approval for their drug candidates in Europe well before the FDA clears them in the U.S., sometimes by a couple of years.
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Analysts at Thomas Weisel Partners suggested that many of the larger biotechs, those with a relatively larger international revenue stream, will benefit the most. In fact, it is stated that 31% of all large biotechs' sales are generated outside the U.S.! That is a significant number.
Large biotechs that should not be affected substantially by a weakening U.S. dollar include;
Amgen (AMGN) - 18% of sales from other nations
Biogen Idec (BIIB) - 40%
Genentech (DNA) - 16%
Genzyme (GENZ) - 45%
Gilead (GILD) - 53%
So why do big American biotechs have such large interest in international sales?
It has to do with the regulatory environment. It is well debated that the U.S. regulatory approval process is by far more strict than other countries, including European nations.
It is not unusual to see biotech companies get approval for their drug candidates in Europe well before the FDA clears them in the U.S., sometimes by a couple of years.
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posted by Nico at
3:54 PM
2 Comments:
Are there any small- or mid-cap biotech stocks that do a significant percentage of their sales overseas?
Please let me know.
hi bob,
really, a lot of little biotechs do much of their clinical trials both in the U.S. and internationally. It would be crazy for a little biotech to rest all its hopes on seeking approval in the U.S. only.
But if I had to recall a some medical companies off the top of my head that actually gain revenue internationally, I would list Bentley (BNT), Thermogenesis (KOOL) as two good examples, even though they are not technically biotech.
KOOL sells a lot of its cord blood and stem cell cryopreservation units internationally, it just started selling in the U.S. KOOL is a BHI stock pick.
Bentley does a lot of business in Spain, and in fact is expanding its manufacturing capability in that country.
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