Biotechnology is the application of technology and science to address social problems like climate change and access to natural resources. Biotechnology companies are classified into different categories depending on the solutions they provide.
The most well-known biotech companies are pharmaceutical companies that develop medicines for humans and animals. Drug development is a lengthy and risky process that can take years. 90% of the potential drugs never make it to the pharmacy shelves.
Biotech isn’t limited to pharmaceuticals. It can be used in a variety of industries. Some of them include agriculture, cosmetics food and environmental technology industrial biotechnology, nutraceuticals and animal products.
Other areas of research are the development of mRNA-based vaccines, which has been utilized in the COVID-19 pandemic as well as monoclonal antibody creation, which is currently being evaluated as an option for treating HIV. The industry is characterized as having high operating costs and requires significant funds to fund R&D.
Therefore, the majority of biotech companies do not make a profit in the early stages. They typically have a strong pipeline and the capacity to generate revenue from non-organic sources. Biotech investing is rewarding, but you must also consider the dangers. For instance, it’s not uncommon for a biotech stock to go through a wild run after the announcement that one of its new therapies has proved successful, and these spikes can be very difficult for investors who are small to handle.