For 2007, the Pharmaceutical-Biotech Industry will see a strong influx of project starts throughout the year, despite the industry's current fluctuations as traditional pharma looks more seriously at biological drugs.
According to recent analysis from Industrial Info Resources, 429 active projects with a total investment value (TIV) of $16.6 billion are planned to start construction in North America in 2007.
Most of the spending in 2007 is expected to be for vaccine production, and both public and private research facilities.
Industrial Info cautions that it is important to analyze what happens to projects after they are first reported, especially when considering reported Pharmaceutical-Biotech capital project spending for any given year.
The use of analysis tools such as Gap Measurement and Project Fallout give a more accurate view of industry project spending patterns. Project Fallout represents projects that have been delayed or cancelled for a variety of reasons, with some simply moved to another year due to funding and regulatory issues. The less Project Fallout the healthier the industry, notes Industrial Info.
For example, an analysis from December 2006 revealed a positive forecast for the Pharmaceutical-Biotech Industry, with 257 projects having a (TIV) of $13.5 billion definitely planned to start construction in 2006.
These figures reflect a Project Fallout of 83 projects, valued at $1.9 billion, from the original 240 reported 2006 projects, valued at $15.4 billion. The changes resulted in a Gap Measurement for the year of 12.47 percent.
Those projects, which were delayed or cancelled, were moved from the 2006 spending forecast, along with their TIV, according to Industrial Info's analysis.
While there was Project Fallout in 2006, the Gap Measurement shows an improvement of 13% over the 2005 figures.
In 2005, there were originally 333 projects with a TIV of $13.9 planned to start construction during the year, this was later adjusted after project updating to 319 projects with a TIV of $11.9 billion, Industrial Info reports. The Gap Measurement for 2005 was 14.06 percent as opposed to the more encouraging 12.47 percent in 2006.
Although the reasons affecting projects moving forward as originally planned vary from one individual project to the next, most projects are usually completed in one form or another, Industrial Info's analysis shows.
An exception to this would be Eli Lilly's recent work stoppage on their $325 million insulin plant in Virginia in response to a major re-organizational shift within the company.
Industrial Info uses the current $300-$400 million “Project Bamboo,” codenamed for privacy, but most probably Solvay Pharmaceuticals, being shopped throughout a number of states, as an example of the importance of tracking projects after they are reported.
The company is looking for the best site for its domestic influenza vaccine production plant, and depending on state and local incentives and the permitting process, it is not known when construction will begin, Industrial Info notes.