While no industry is truly immune to financial pressure, biotech is faring better than most.
Celgene Corp. (CELG) recently “warned” that its earnings per share will only grow by 20% in the first quarter. It’s considered a warning because Wall Street analysts expected 25%. Meanwhile, there are probably 1,000 CEOs that would sell their soul to report 20% growth in the first quarter.
According to business intelligence firm IBISWorld, biotech revenues are expected to grow by more than 10% in 2009.
In certain areas of the country, the biotech industry is helping to stabilize local economies. In the battered San Francisco Bay Area, South San Francisco is holding up relatively well thanks to the large number of biotech companies in the city.
“Biotech is one of the few growth industries in California, and it will continue to grow,” Michael Lappen, South San Francisco’s economic development coordinator, recently told the San Francisco Examiner.
South Florida is ground zero for the real estate collapse. But recent efforts to recruit biotech companies are paying dividends. Biotech companies increased their recruitment efforts by 5.5% in the sunshine state. Nationwide biotech companies added 27,000 new jobs in February. That compares to losses of 101,000 jobs from the private sector during the month, according to the U.S. Labor Department.
Moreover, in the current recession, the S&P Biotech Index is down, but it has lost only half as much as the S&P 500, which is kind of remarkable in that the sector is considered risky.