The European landscape of listed biotech companies: 2018 review (Part 4)

6.4 Profits & Losses

The financial data by country/cluster from the condensed income statements can be found in Table 10. Whereas there is no real point to interpret such data by country as is, these data can still be compared with the cash balance data from the previous section. Other indicators, like the median gross margin for the companies eligible to report one, as well as the percentage of operating expenses dedicated to Research and Development, are also reported in this table.

Overall, the ranking is very close to the one from Figure 37, which is consistent. However, the direct relation between our method to calculate the cash burn and the data out from the income statements has to be established (see Annex 2 for a “tentative” data reconciliation). For the 2018 reporting period, 88% of the companies had a negative operating result, and 89% a negative net result, with a quasi-perfect concordance for the sign of both metrics (99.3%).

Tab. 10. Condensed P&L and indicators, by country/cluster, for the 2018 reporting period (million EUR)

In terms of gross margins, the medians per country/cluster range from 60% to 90%. These variations may be mainly deemed to the ratio of companies receiving royalties at basically 100% gross margin, with respect to those selling products directly, with an inherent lower gross margin. This large variability is also impacted by the low number of companies in some countries/clusters. Finally, the gross margin data rely on the financial reports of 33 companies out of the 150, which is consistent with the 21% of biotech companies at the commercial-stage (Figure 6).

For the ratio of the total operating costs dedicated to R&D, we had to mix financial data already compliant with the IFRS accounting standard, with other various accounting methods. Some non-IFRS data still do include R&D expenses, while some others do not. In this case, we built an equivalent indicator with available data, consistent with IFRS methods or not, basically by taking the total operating expenses and removing the SG&A expenditures. Depreciations are also removed from the calculations of the ratio. We find a median of 75% of the total operating expenses allocated to R&D, based on the reports of all the companies. Once again, this validates our company selection. Lower ratios tend to indicate more mature companies transitioning to a biopharma model, with more expenditure allocation to SG&A and commercial activities.

A vast majority of the company level data consolidated in this review are available on our intelligence service (subscription service for pro only). We provide small granularity data, and insights on the main items of biotech investing, for more than 150 companies listed on the main European markets. Disclaimer: we do not provide any investment recommendation on our service. This review is not aimed at supporting an investment decision on any company, any country, or any stock market mentioned in this report. See more details on

The author can be contacted via email, on Twitter @BertrandBio / @biotechradar_eu, or Linkedin.

Frontpage illustration generated on