Understanding Biotechnology and Its Business Opportunities

Biotechnology relies on biological processes to develop products, systems and tools that improve or benefit humans ranging from food processing, biofuels to drug development. 

It is divided in 5 main branches: 

  • Animal biotechnology: applications include producing transgenic animals by in vitro (in lab) egg fertilization to transfer desired properties including increased milk, meat or wool production 
  • Medical biotechnology: applications include drug development produced from bacteria which have been tweaked to obtain the active drug chemicals or large scale production of hormones (human insulin used in diabetes and interferon needed in the immune system) and proteins (blood serum)
  • Industrial biotechnology: applications include the large-scale production of commercially valued products often by microorganisms (bacteria and fungi) such as acetone in nail polish, penicillin in antibiotics or vanillin in vanilla flavour 
  • Environmental biotechnology: application include producing biofuels as a more sustainable energy source or bioremediation, using living organisms (bacteria) to remove contaminants, pollutants and toxins from different environments (soil, air, water)
  • Plant biotechnology: applications include breeding disease-resistant and high-yielding crop species and producing more nutritious food (increased proteins and vitamins) to feed the increasing world-population 

As shown above, biotechnology is no longer limited to improving health but generally involved in improving the world we live in. It has created novel industries and reinforced others: earlier detection of diseases through genetic screening, biodegradable plastics and plastic digesting bacteria, biotextiles to combat the polluting fashion industry. 

While clinical biotech companies often incur a high risk for investors due to the timescale needed until a drug or therapy hits the market once it receives approval, it is extremely rewarding. Innovative programs with encouraging clinical results can generate high returns for investors. For example, if they are acquired by larger pharmaceutical companies or if they have a patent where royalties need to paid when the drug or technology is used. 

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Climate change and the need to find sustainable alternatives for future generations means that more industries are relying on living systems and produced waste for solutions. A transition from a fossil to a more bio-based economy has also been highlighted by experts. As such, many students (undergraduates, graduates, PhD) are attracted to starting their own biotech start-ups in one of the 5 branches to help society. Investors are also aware that while being risky, biotech stocks can potentially offer substantial long-term returns as shown by the recent COVID-19 pandemic (diagnostic antigenic and PCR tests as well as vaccines).  

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