Biotechnology is the application of science and technology in order to solve societal problems like climate change and access to natural resources. Biotechnology companies can be classified into various categories in relation to the solutions they plan to offer.
The most well-known biotech companies are pharmaceutical firms that create drugs for humans and animals. Typically, drug development takes a long time and is very risky venture with a high percentage of drugs that are developed failing to get from the lab of research to the shelf of a pharmacy.
However, biotech is not restricted to developing pharmaceuticals. many other industries can utilize the technology. These include agriculture, cosmetics and food technology. Nutraceuticals, industrial biotechnology and veterinary products are included.
Other research areas include mRNA vaccines that were utilized in the COVID-19 Pandemic and monoclonal antibodies, which are currently being evaluated for HIV treatment. The industry is characterized as having high operating costs, and requires substantial funding to fund R&D.
In the end, the majority of biotech companies aren’t profitable in the early stages. They typically have a strong pipeline and the ability to generate non-organic revenues. Biotech investments can be lucrative however, it is important to be aware of the risks that are involved. For example, it is not common for biotech stocks to experience an explosive run due to the news that one of its innovative treatments has been successful and these spikes are often difficult for small investors to withstand.