Capital efficiency may be the name of the game in the biopharma business these days, but large biotech companies generally are willing to gamble larger amounts when it comes to developing new products. Last year the top 10 biotechs in the world spent $10.2 billion on R&D, up a whopping 13% over their $8.9 billion track record in 2010. And the initial indications suggest that even as some are trying to rein back spending, a number of these developers will be pressing the R&D accelerator even harder over the course of this year.
As Biogen Idec ($BIIB) showed over the past year, unhappy investors will back off on calls to cut research costs if you show some major headway on big new products. Now I'm waiting to see if the new crew in charge of Amgen ($AMGN) will win a grace period if the late-stage pipeline shaped by departed R&D chief Roger Perlmutter gains some of the same ground in Phase III.
Ironically, every new top executive in biotech is ultimately judged by the success or failure of his predecessor's game plan.
Several of the companies on this year's list are gambling big bucks on new acquisitions and licensing deals. Gilead ($GILD) bought its way into the hot hepatitis C race. Celgene ($CELG) has been aggressive on its own front, buying Avila and investing in new technology. And Vertex ($VRTX) showed that when you stay aggressive, and smart, you should never be counted out.