The global biotechnology industry set record levels in financing and deal-making in 2007, according to the just-released annual report "Beyond Borders" from the consulting firm Ernst & Young. Last year, U.S. and European companies raised a total of $30 billion in stock offerings and private financings, which was a new high if the "genomics bubble" of 2000 is excluded. Investors were attracted to an industry in which about 800 public companies spent a combined $31.8 billion on R&D and reaped $84.8 billion in revenues, an 8% increase from 2006. Although this same group reported a combined net loss of $2.7 billion, the loss was down from $7.4 billion in 2006. Mergers, acquisitions, and strategic alliances in 2007 also reached a record potential valuation of nearly $95 billion in the U.S. and Europe combined. Looking ahead, however, global financial conditions will continue to test the biotech industry in 2008. "To continue its multiyear track record of progress, the industry must meet the current challenges of cooling public equity markets, greater regulatory scrutiny, and higher product approval and reimbursement hurdles with fiscal discipline and the creativity and innovation for which it is known," says Glen T. Giovannetti, Ernst & Young's global biotechnology leader.