Biotechnological business is the use of living organisms for commercial use. The primary Biotechnology field is medicine, and the related products such as vaccines. Biotechnology is used in heavy industry, agriculture and mining using products such as biopesticides. Many large pharmaceutical companies have a separate department for biotech-based medications. Certain of these medicines originate from living organisms while others are chemically -based. This distinction is important as the risk profiles of these two industries are different.

In addition to the risks, a biotech company’s extensive research and development activities can make it expensive to operate. A successful drug can produce an impressive return on investment. It can take a while for a new product to be available for sale. The FDA approval process is extremely complex and time-consuming, requiring preclinical testing and clinical trials as well as quality monitoring. According to Science Daily, only a small fraction of compounds that are tested ultimately are approved for commercial use.

Biotech companies may choose to concentrate their efforts on technology partnerships or to develop their own pharmaceutical assets that they then license to big pharmaceutical companies to manufacture and sell. Many biotech companies are taking the former approach because it can accelerate revenue growth. It is not without the risk, however, since they also have to cover the costs of developing clinical products and approval by regulators and insurance reimbursement negotiation and sales promotion. To mitigate these risks, biotech companies often rely on strategic alliances with major pharmaceutical and smaller biotechnology platform companies. Massachusetts’ biotech ecosystem, for instance, includes leading universities, teaching hospitals, entrepreneurs and venture capitalist communities.

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