29 November 2024
On a routine basis in recent years, headlines about layoffs in the biopharma industry have surfaced as companies large and small have been cutting costs and restructuring. Over the last 10 days, for example, Fierce has written about dismissals at Bristol Myers Squibb, Novartis, Lexicon Pharmaceuticals, Johnson & Johnson, Gilead Sciences, Merck, Sonata Therapeutics, Medigene and Alector Therapeutics.
But those days may soon be over, according to leaders in the life sciences sector, who participated in an annual survey conducted by KPMG.
Of the respondents, 94% of the life sciences CEOs said they plan to grow their workforce over the next three years, with 37% envisioning that the head counts of their companies will grow by at least 6%.
The results back up the confidence the CEOs have in their growth prospects. Of KPMG's life sci CEO respondents, 79% said they are confident that their companies are on a growth trajectory over the next three years, which is up 10 percentage points from last year.
Results of the survey were published (PDF) in KPMG’s "2024 Life Sciences CEO Outlook," which paints a generally optimist picture of the prospects for the industry in the next few years.
For its larger 2024 CEO Outlook report, KPMG surveyed 1,325 CEOs of companies with revenue of at least $500 million. A third of the CEOs were from companies that generate at least $10 billion in revenue. The execs were interviewed in July and August, covered 11 industries and were from 11 key markets around the world.
In life sciences, 120 CEOs were surveyed, with 45% representing pharma companies and 19% representing biotechs.
An interesting contrast to the CEOs' optimism about their own companies is their declining confidence in the overall health of the industry. In this survey, 67% shared confidence in the industry overall, down from 80% last year.
The areas that present concern for the CEOs include economic uncertainty (57%) and geopolitical complexities (53%). Roughly two-thirds of the respondents said they have adjusted their growth strategy because of the changing market environment.
Another note from the survey is that 60% of the CEOs said that generative artificial intelligence (gen AI) is now their top investment priority and that 77% expect to see a return on the investment in the next five years. The allure of AI is undeniable, considering its potential to enhance R&D and efficiency.
That said, the execs do have major concerns about whether their companies are ready for AI, as only 38% said they are confident that their data are ready for AI adoption and only 37% believe their companies have the staff talent to bring it on effectively.
As for environmental societal and governance (ESG) issues, just 43% of the execs are confident that they can meet their net zero goals by 2030, which was the second-lowest figure among the 11 business sector CEOs that KPMG surveyed.
The most important reason for meeting ESG goals is that it builds customer relationships and fosters positive brand association, said 38% of the life sci CEOs.
“The life sciences sector is a firm believer in the importance of sustainability, with a number of large European based pharma companies, in particular, being in the vanguard of ESG,” Jon Haynes, KPMG's EMA region lead in life sciences, wrote in the report.
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