An industry emerging from crisis
"Scanlab is normally indicative of the status of investment incentives in the laboratory industry "
Throughout the financial crisis, the Danish pharmaceutical industry has performed remarkably well, resulting in record high results. This, however, has not led to increased investments in the laboratory area, possibly because the pharmaceutical industry awaits uncertain times, thus preferring caution before making new investments. Further, there has been a significant stop in venture capital investment in biotech companies, which has forced the vast majority of biotech companies to cut down sharply on investments and costs.
In contrast, government support packages stimulated investment in laboratory equipment at Danish universities and hospitals where Copenhagen University in particular benefited from large sums allocated not only by the state, but Novo Nordisk as well.
The sum of investments in the Danish laboratory market has fallen in the last two years and has left its mark on the laboratory industry. The industry is characterized by the fact that there are a very large number of supplier companies for a relatively stagnant market. This causes bottom line results to be generally low. In laboratory and diagnostics, the Dadif trade association estimates the average profit rate for the entire laboratory industry to be two to three per cent. When the industry is so affected by a financial crisis, there are serious consequences. Many companies have produced a negative result during the last two years, some of them exhausting funds and running on negative equity. There have also been some bankruptcies within the industry.
But as in most other industries, the storm has settled in the laboratory industry. Recovery, however, is slow entailing great struggle for every purchase.
The upcoming Scanlab fair will be particularly interesting, since Scanlab is normally indicative of the status of investment incentives in the laboratory industry for the next six to twelve months. We at Dadif obviously hope that the curves will show a distinct increase during the fair.