Biotechnological business is the application of living organisms for commercial purposes. The main field of Biotechnology is medicine, and associated products like vaccines. Biotechnology is used in heavy industry, agriculture and mining with products such as biopesticides. Numerous large pharmaceutical companies have separate divisions dedicated to biotech-based medicine. Certain of these drugs originate from living organisms, while others have a chemical base. This distinction is important as the risk profile of these two industries are distinct.
A biotech business can be expensive to run due its extensive research and development. A successful drug could yield significant returns on investment. But it can take years for a brand new product to be available for sale. The FDA approval process is extremely complex and long-winded, requiring preclinical testing, clinical trials and quality monitoring. According to Science Daily only a small percentage of compounds tested make it to market.
Biotech companies can choose to focus on technology partnership or develop their own pharmaceutical assets, which they out-license to big pharma for manufacture and marketing. The majority of biotech startups choose the latter option since it can increase the revenue growth. However, it is not without danger, however, because they must also pay for the costs of developing clinical products and approval by regulators, insurance reimbursement negotiation, and sales promotion. Many biotech companies make strategic alliances to mitigate these risks. These include partnerships with major pharmaceutical companies and smaller biotechnology platforms. Massachusetts Biotech’s ecosystem, for instance, includes leading teaching hospital, universities as well as entrepreneurs and venture capitalists.
