Biotechnological business involves the use of living organisms to make commercial products. The major area of biotechnology is medicine and related products, such as vaccines. Biotechnology is also used in agriculture and heavy industry mining, for example, with products like biopesticides and ethanol. A lot of large pharmaceutical companies have a distinct section for biotech-based drugs. Certain of these products originate from living organisms whereas others are chemically -based. This distinction is crucial since the risk characteristics of these two industries are distinct.
A biotech company can be costly to run due to its extensive research and development. A successful drug can produce a substantial return on investment. But it can take years for a new product to be available for sale. 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 small percent of the compounds tested will make it to market.
Biotech companies have the option to concentrate their efforts on technology partnerships or to develop their own pharmaceutical assets which they then license to big pharma to manufacture and market. The majority of biotech startups choose the latter route because it can accelerate revenue growth. However, it is not without risks, however, since they must also cover the costs of developing clinical products and approval by regulators and insurance reimbursement negotiation and sales promotion. To minimize these risks biotechs often make strategic biotechnological synthesis of remedies alliances with large pharmaceutical and smaller biotechnology platform companies. Massachusetts’ biotech ecosystem, for example, includes a renowned universities, teaching hospitals as well as entrepreneur and venture capital communities.