U.S. biotechnology companies revenues grew 8 percent last year but the increased profitability was driven largely by cost cutting and reduced levels of research and development funding, according to a report released today by accounting firm Ernst & Young.

The annual report describes a biotech industry that is recovering from the economic downturn but also faces serious challenges going forward.

"While the biotech industry’s aggregate performance improved in 2010, there is now a widening gap between large, established companies and those at earlier stages for whom access to capital continues to be difficult,” said Glen Giovannetti, Ernst & Young’s global biotechnology leader, in a release summarizing the report's findings.
   
The performance of the biotech sector in North Carolina largely mirrored this trend.

The market cap of publicly traded biotechnology companies in the state increased 42 percent last year and revenues were up 12 percent, according to the E&Y report. R&D spending was flat, however, up just one percent.

The report concludes that biotech sector's performance over the next five years may be characterized by steady profits, but not the strong growth rate that it has experienced during earlier periods.

Executives from several Triangle companies flew to Palm Springs, Calif., last weekend for Ernst & Young's national entrepreneur of the year awards ceremony. Only one came home a winner.

Talecris Biotherapeutics CEO Lawrence Stern won in the Health Sciences category. Stern has run the Research Triangle Park company, which makes medicines from blood plasma, since it was part of Bayer in 2003.

He was recognized for "growing Talecris into one of the leading plasma therapeutics companies in the world," Ernst & Young officials wrote in a prepared statement.

The last time, Jud Bowman went solo.

In 2001, when Ernst & Young first nominated Bowman as an entrepreneur of the year, the then-20-year-old traveled alone to Charlotte for the awards ceremony, figuring he wouldn't win. He did.

This week, when he returns to Charlotte as a finalist again, he'll bring his mother, girlfriend, and several board members and employees from the technology company he now runs, Durham-based PocketGear.

"We're thinking of renting a bus and all driving over together," Bowman said. "Even if I don't win, it's a great excuse to put on tuxes, drink some champagne and celebrate."

The annual Ernst & Young awards, now in their 24th year, have become prestigious recognition for the state's entrepreneurs. A caravan of other Triangle business leaders who are finalists also plan to make the trip to Charlotte. Most will bring spouses, children, employees, investors or friends as they bask in the limelight on Thursday night.