Biotechnology is the application of technology and science to address social problems like climate change and access to natural resources. Biotechnology companies can be classified into different categories according to the solutions they seek to provide.
Most biotech companies are pharmaceutical firms that produce medicines for both humans and animals. Typically, drug development can take years and is a extremely risky venture, with 90% of prospective drugs failing to be able to make it from the lab to the shelves of the pharmacy.
However, biotech is not restricted to the development of pharmaceuticals; a wide range of other industries can utilize the technology. Some of these include agriculture, cosmetics as well as food and environmental technology, industrial biotechnology, nutraceutical and veterinary products.
Other areas of research include the development of mRNA vaccines. This has been utilized in the COVID-19 pandemic, and monoclonal antibody development, which is currently being studied as an option for treating HIV. The business is characterized by high operating costs and requires significant funding for R&D.
The majority of biotech companies fail to succeed in the beginning stages. The ones that are usually profitable have strong pipelines and the ability to generate non-organic revenue. Biotech investment can be profitable but it is crucial to take into consideration the risks associated with it. For example, it is not unusual for a biotech stock to experience an explosive run on the news that one of its innovative therapies has been successful, and these spikes can be difficult for investors of a smaller size to bear.
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