Biotechnology is the use of science and technology to create solutions to societal problems like climate change mitigation as well as the accessibility and sustainable use of natural resources, and food security. Biotechnology companies are classified into different categories in relation to the solutions they intend to offer.
The most well-known biotech firms are pharmaceutical companies that create drugs for humans and animals. Drug development is a risky and lengthy process that takes years. 90% of potential drugs don’t make it onto the shelves of pharmacies.
However, biotech isn’t restricted to developing pharmaceuticals. a variety of other industries can utilize the technology. This includes cosmetics, agriculture and food technology. Nutraceuticals, industrial biotechnology and veterinary drugs are also included.
Other areas of study include the development of mRNA-based vaccines, which has been used in the COVID-19 pandemic and monoclonal antibody creation, which is currently being studied as an option for treating HIV. The industry is described as having high operating costs, and requires significant funding to fund R&D.
Many biotech companies do not succeed in the beginning stages. They typically have strong pipelines and the capacity to generate revenue from non-organic sources. Biotech investing can be rewarding but you need to consider the risks. It is not unusual for biotech stocks to spike in the wake of a promising new therapy’s results. These spikes can be difficult for investors with smaller budgets.