Biotechnology is the commercialization of living organisms. The major area of biotechnology is medicine, and related products such as vaccines. Biotechnology is also used in agriculture and heavy industry, including mining, with products such as biopesticides and ethanol. Many pharmaceutical companies have separate divisions that deal with biotech-based medical treatments. Certain of these medicines are derived from living organisms, while others are based on chemicals. This distinction is crucial because the risk profiles of these two industries are different.
In addition to the risk, a biotech company’s extensive research and development activities can cause it to be costly to operate. A successful drug could generate significant returns https://genotec-frankfurt.de/top-5-simple-virtual-deal-software-for-beginners/ on investment. It can take several years before a new product is released to the market. The FDA approval process is complicated and time-consuming, requiring preclinical testing and clinical trials as well as quality monitoring. According to Science Daily, only a tiny fraction of the substances that are tested make it to the market.
Biotech companies can choose to concentrate on technology collaboration or develop their own pharmaceutical assets that they out-license to large pharma for manufacture and marketing. Most biotech startups opt for the latter route because it can boost revenue growth. However, it is not without risk since they also have to pay for the cost of clinical development and regulatory approval, as well as insurance reimbursement negotiations and sales promotion. Many biotechs use strategic alliances to minimize the risks. These include partnerships with large pharmaceutical companies and smaller biotechnology platforms. Massachusetts Biotech’s biotech ecosystem for instance, is comprised of a top teaching hospital, universities, venture capital and entrepreneur communities.
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