Confidence Levels Stabilize in the Q1 Biopharma CEO Confidence Index

One quarter after the Q4 study pointed to an increased level of uncertainty among biopharma CEOs, confidence levels appear to have stabilized. A bearish second half of 2015 paired with U.S. stocks having the worst 10-day start in history could have easily accelerated the slight decrease in biopharma CEO confidence we observed in the Q4 index. However, over the course of Q1, the markets seemingly settled and CEO confidence leveled off.

Having analyzed 3 data sets over the course of 9 months, it is obvious that there is a correlation between the state of the capital markets and confidence levels among our CEO respondents. Despite this correlation, the Q1 data further validates that regardless of the capital market environment, biopharma CEOs are resilient, remain optimistic and are focused on the long-term.

Click here for a comprehensive analysis of the Q1 results.

Below are top line results of the 2016 Q1 Biopharma CEO Confidence Index.

Respondent Profile

  • 67 CEOs representing biopharma companies
  • 64% privately held
  • 27% market cap < $250M
  • 8% market cap $250M – $1B
  • 2% market cap > $5B

Industry Outlook

  • 97% of Biopharma CEOs are either very confident (58%) or somewhat confident (39%) in their companies and the overall industry
  • The 2 largest risks to their companies remain capital stability at 40% and clinical results at 30%

Across the Six Key Indicators

  1. Capital Markets
  • 42% are very confident in fund-raising prospects (39% in Q4)
  • 18% are very confident in ability to raise capital through public markets (25% in Q4)

Key Implication – Confidence in public markets decreases, remains stable across all sources of capital

  1. Deal Landscape
  • There are now a greater number of CEOs labeling M&A and partnering market as “Fair” (51%) vs. “Good” (45%)
  • Two-thirds refer to deal competition as “moderate” and indicate deal values are “remaining stable” as opposed to increasing or decreasing

Key Implication – Deal making confidence continues to decline despite moderate competition and stable deal values

  1. Clinical Development
  • Confidence in delivering clinically differentiated assets continues to soar (72%)
  • Over 60% indicate competitive intensity for trial recruiting is “stable” in primary care and “intense” for rare disease

Key Implication – Confidence in delivering clinically differentiated assets is stable while rare disease trial recruiting proves to be challenging

  1. Regulatory Affairs
  • CEOs that are “very confident” in the overall regulatory environment remains steady, but low at 22%
  • Only a small portion of CEOs are “not confident” in the US (9%) and EU (6%) approval process compared to Japan (31%) and ROW (51%)

Key Implication – Confidence in US and EU approval process is modest, but remains superior to other markets

  1. Commercialization
  • CEOs that are “very confident” in their commercial capabilities increased from 11% to 19% from Q4 to Q1
  • 70% plan to commercialize with external partners vs. independently (61% in Q4)

Key Implication – Confidence increases among the few CEOs having an internal commercial function while external commercialization remains the prominent strategy

  1. Business Model and Workforce
  • 34% plan to add corporate leadership staff (43% in Q4)
  • CEOs planning to increase overall staff by 6-10% rose from 15% to 25% while those planning on increasing staff by more than 10% declined from 63% to 52%

Key Implication – Large scale (10%+ increase) hiring plans are slowing and corporate leadership staffing is largely expected to remain the same

To view past results, click here

The results of this Index and the implications are much more impactful and applicable to any company’s business situation when they are delivered in person. Request that a Kineticos team member present the full Index and survey results to your organization

The Biopharma CEO Confidence Index is a partnership between KineticosIpsos Healthcare, and. Demy-Colton.

purple-with-taglineDemy Colton Logo