–minor- boom is associated with stockpiling of GlaxoSmithKline's Relenza (zanamivir) and Roche's Tamiflu (oseltamivir phosphate) by many countries in order to prepare for a possible avian flu epidemic. Surprisingly, the main cause for the 2009 slump had not been the general recession, but slow-downs of the growth and, even more so, inventory adjustments by the pharma industry. They resulted in postponements or cancellations of orders. The unfavorable development was in sharp contrast to the very optimistic growth forecasts, which many fine chemical companies, had announced. They had been based on equally promising sector reports from investment banks, which in turn had evolved from forward projections of the preceding boom period. In most cases, these projections have been missed by a large margin. At the end of the "irrational exuberance" at the turn of the millennium and again in 2009 almost half of the industry achieved a return on sales (ROS) of more than 10%, and less than 10% an ROS below 5%. In the worst years, 2003 and 2009, almost half of the companies suffered from an ROS of less than 5%. Whereas during the period under review, 2000–2009. the average EBITDA / sales and EBIT / sales ratios of representative companies, resp. divisions were 15% and 7%, respectively, in the period 2000–2009, the numbers were 20% and 10–13% in the boom, and 10% and 5% in the bust phases. The factor 2 between the high and low numbers reflects the volatility of the industry's profitability. All in all, the average Western fine-chemical firms have been making a return below the cost of capital, i.e. they are not reinvestment grade. Outlook Two main trends impinge on the industry. On the supply side, biotechnology is rapidly gaining importance. In the synthesis of small molecule fine chemicals, the use of biocatalysts and microbial fermentation enable both a more sustainable and economic production than conventional organic chemistry. In the synthesis of big molecules, such as biopharmaceuticals, it is the method of choice. Biopharmaceuticals are expected to grow 15% per year, three times as fast as small molecule drugs. Five of the top ten drugs were biopharmaceuticals in 2010 (see table 6), and this is expected to grow to eight by 2016 (see table 2). On the demand side, the main customer base for fine chemicals, the pharmaceutical industry, is faced with slower growth of demand, patent expirations of many lucrative blockbuster drugs and