I predict that 2014 will be a year where the pharmaceutical industry will be stronger, however, both old and new investment challenges will continue to behold biotech companies.

Through the painful process of restructuring, together with a strong therapeutic focus on their late stage clinical pipeline, a number of pharmaceutical companies will emerge in 2014 in a much stronger position than they were just a few years ago. Pharma has learnt to be lean and focussed. The challenges have not gone away and repeated drug failure in Phase III for some still needs to be dealt with.  One of the questions for pharmaceutical companies in 2014 is how they should build their emerging market strategy. Establishing a robust presence in the BRICs is proving more of challenge than anticipated. Although there have been some acquisition opportunities most pharma companies currently rely heavily on organic growth within these territories where business and cultural practices can be quite different. Nevertheless I predict a leaner and stronger pharma industry in 2014.

In 2013 we had the heady boom in biotech IPO’s in the US together with a strong rise in biotech stocks. Although this was very welcome and long over due it leaves the biotech sector with big challenges in 2014. The key question of course is the sustainability of the IPO market. Will we run out of good IPO candidates leading to the trap of poorer quality companies attempting to go public? I fear 'probably'! And how sustainable is the market price for those companies that floated in 2013? This is not trivial! Their performance in 2014 can hugely influence investment in the biotech sector world-wide. For biotech companies generally 2013 was an ‘OK’ year. Good companies got funding, albeit not at ideal levels, but there was a general feeling of mild optimism. The lack of VC funding remains a big challenge particularly at the earlier stages of drug development. However, more imaginative schemes, some governemnt backed are starting to emerge.  This together with the rise of corporate VC funds will improve funding in 2014. Nevertheless, I believe there is a huge opportunity for new funds which can exploit the very much changed biotech industry. The old VC funding model is dead and stronger more intellient models are starting to emerge. So with a maturer and more experienced biotech sector I remain optimistic for 2014.

With all its knocks over the past decade I believe we have built a stronger industry capable of delivering its promise to patients. 2014 will be a year that will bring that promise closer.