Investing in the Biotech Industry

Biotechnology is an expanding industry which helps solve problems in a variety of industries from agriculture to medicine. It utilizes methods of genetic engineering to construct or improve existing organisms. The most well-known applications are in the fields of pharmaceuticals, molecular diagnostics, and vaccines. But it can also be used to create alternative meat products, to isolate human cells to develop tissue and genetically-edited plants. The majority of drug development projects fail, and it takes some time to bring new drugs to market. Investors are wary of the biotech industry due its high failure rate and lengthy development lead times.

One of the most important aspects for any biotech investor is the pipeline the company has. A biotech company must have a strong clinical trials program to support its short-term financial demands. Clinical trials can be expensive and can take years to be completed. Therefore, a biotech that is successful should have several drugs in Phase 2 or later and at least some of those increasing confidence within the biotech industry in Phase 3 and beyond.

As R&D companies get ready to launch new products, their underlying culture and goals will shift to bring value to patients. This shift will bring about new trade-offs and decisions, which require careful consideration of investments, organizational building capabilities, and culture. Biotech companies that succeed discover ways to communicate and transfer their goals across their entire organization, while maintaining the link to their R&D driven research. This will ensure that the right priorities are driving commercial success and support the continued development.