The Biotechnology Industry

Growth and change are the hallmarks of the developing biotechnology industry. Since the first approval of a biological product in 1982, over 40 biologicals, many of them medical breakthroughs, have been brought to market. The majority of biotechnology companies focus on developing human therapeutic agents, but about 25 percent of biotechnology companies focus on the diagnostic area, using monoclonal antibody technology, polymerase chain reaction (PCR) technology, and genetics to provide advances in diagnosis and disease monitoring. Structurally, few biotechnology firms are fully integrated companies with full capabilities in research, development, manufacturing, and sales and marketing. Many pursue strategic alliances with other companies to enhance their capabilities in research, development, and sales and marketing. Research alliances between companies and universities are also frequently used to enhance research capabilities. As the industry has matured, consolidation has occurred, with major pharmaceutical companies purchasing biotechnology companies and biotechnology companies merging to expand their capabilities. Research investment, as a percentage of gross sales, continues to be very high for biotechnology companies compared with traditional pharmaceutical companies. The cost of drug development is high, but the probability of approval appears to be somewhat better in the biotechnology field compared with traditional pharmaceuticals. Today, the biotechnology product pipeline is rich, with between 400 to 700 products in various stages of clinical development. Technology developments beyond recombinant DNA technology and monoclonal antibodies, such as antisense, genomics, and combinatorial chemistry, will lead to additional therapeutic and diagnostic breakthroughs.