Biotechnology is a commercial use of living organisms. The main field of biotechnology is medicine, and related products, such as vaccines. Biotechnology is used in the fields of agriculture, heavy industry and mining using products such as biopesticides. Many large pharmaceutical companies have a distinct division for biotech-based medicines. Certain of these products originate from living organisms, whereas others are chemically -based. This distinction is important as the risk profile of the two industries differ.
A biotech company can be expensive to operate due to its extensive research and development. A successful drug can yield an impressive financial return. It can take a while for a new product to get to market. The FDA approval process can be complicated and time-consuming. It requires preclinical testing, as well as clinical trials and quality control. According to Science Daily, only a tiny fraction of the substances which are tested ultimately are released to the market.
Biotech firms can choose to focus on technology partnership or create their own pharmaceutical assets, which they license to big pharma for manufacture and marketing. Many young biotechs opt for the latter option since it can increase revenue growth. However, it’s not without risk because they also have to pay for the costs of developing clinical products regulatory approval, insurance reimbursement negotiations, and sales promotion. Many biotechs make strategic alliances to limit the risks. These include partnerships with big pharma companies as well as smaller biotechnology platforms. The biotech ecosystem in Massachusetts for instance includes top teaching hospitals, universities and entrepreneur communities as well as venture capitalists.