Biotechnology is the commercial application of living organisms. The primary Biotechnology field is medicine, as well as related products like vaccines. Biotechnology is also used in agriculture and heavy industry, including mining, with products like biopesticides or ethanol. Many major pharmaceutical companies have a separate department for biotech-based medications. Some of these medicines are derived from living organisms, while others are chemically dependent. This distinction is crucial because these two industries have distinct risk profile.
In addition to the dangers, a biotech firm’s extensive research and this post development efforts can cost a lot to operate. A successful product can bring an impressive financial return. It can take a while for a brand new product to become available on the market. The FDA approval process is complex and long-winded, requiring preclinical testing, clinical trials and quality monitoring. According to Science Daily, only a small percentage of the compounds which are tested ultimately are approved for commercial use.
Biotech companies can choose to focus on technology partnerships or develop their own pharmaceutical assets which they license to big pharmaceutical companies for manufacturing and marketing. The majority of biotech startups choose the former option as it will increase the revenue growth. It’s not without the risk, however, since they must also pay for the costs of developing clinical products and regulatory approval as well as insurance reimbursement negotiation and sales promotion. To mitigate these risks, biotechs often make strategic alliances with large pharma and smaller biotechnology platform companies. Massachusetts Biotech’s biotech ecosystem for instance, includes leading teaching hospital, universities as well as entrepreneurs and venture capitalist communities.