Biotechnology Research Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,700 biotechnology research firms in the US study the use of microorganisms and cellular and biomolecular processes to develop or alter living or non-living materials. Firms develop new biotechnology processes or prototypes of new or genetically-altered products that may be reproduced, utilized, or implemented by various industries. A firm may specialize in a particular field, such as oncology, cardiovascular medicine, or agricultural products. Companies may also specialize in a particular stage of drug development (discovery, pre-clinical, clinical) or offer a full-service model that allows a firm to play a part in each step of the drug approval process.

Liability

Because biotechnology research and development involves the testing of new drugs on patients in clinical trials, firms are exposed to the risk of liability for personal injury to or death of patients, particularly those with life‑threatening illnesses.

Failure Is Inherent

The overall probability that a drug in the discovery and preclinical phases of development will reach the final market is extremely low.

Industry size & Structure

The average biotech research and development firm operates out of a single location, employs about 62 workers, and generates about $7-9 million annually.

    • The biotech research and development industry consists of about 4,700 firms that employ 293,000 workers and generate $36 billion annually.
    • About 5% of firms operate as non-profit organizations that generate just under 15% of industry revenue.
    • The average non-profit biotech research firm employs about 64-65 workers and generates about $16 million annually.
    • The industry is moderately concentrated at the top and fragmented at the bottom; the top 50 companies account for about 56% of industry revenue.
    • Large firms, which include PAREXEL, Covance (LabCorp), and Syneos Health (merger of inVentiv Health and INC Research), may be vertically integrated and operate manufacturing facilities in addition to R&D centers. The largest firms typically have global operations.
    • Large non-profit organizations that operate biotechnology R&D facilities include major research universities (SUNY system), IAVI, and Battelle Memorial.
    • The major contract research organizations (CRO) typically focus on the development phase and offer limited services related to research/discovery.
    • The broader bioscience industry includes five major subsectors: agricultural feedstock and chemicals; bioscience-related distribution; drugs and pharmaceuticals; medical devices and equipment; and research, testing, and medical laboratories.
                                Industry Forecast
                                Biotechnology Research Services Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Nov 4, 2024 - New Biofoundries Will Focus On Advancing Biotechnology
                                • The National Science Foundation announced a $75 million award to support the creation of five “biofoundries” at academic institutions. Each biofoundry will focus on a unique area of biology and biotechnology research, and all are aimed at advancing biological and other sciences as well as making the tools needed to conduct that research accessible to a wider array of people. The biofoundries will, for example, provide access to resources like knowledge bases and cutting-edge technology needed “to ensure all ideas reach their potential,” according to the National Science Foundation. Those resources will also be free of charge. “Biofoundries provide a way to de facto standardize some of these techniques, technologies, workflows, processes that can then be translated in an industrial scale,” according to Sridhar Raghavachari, NSF’s program officer for Biological Centers, Facilities.
                                • The US biotechnology sector leads the world, with the number of active firms exceeding 2,800, according to the Organization for Economic Co-operation and Development (OECD). This figure is a testament to the country’s robust innovation ecosystem, which is supported by a confluence of venture capital, research institutions, and a regulatory environment conducive to biotech development, according to the OECD. The United Kingdom is a close second with just under 2,800 active biotech firms.
                                • Big data is playing an increasingly important role in biotechnology research, according to Health Tech Zone. Researchers can gain deeper insights into complex biological processes by aggregating and analyzing large datasets from various sources. The increasing availability of large-scale biological datasets, such as genomic and proteomic data, is transforming the way biotechnology research is conducted and enables a more comprehensive understanding of complex biological systems. This data-driven approach is particularly valuable in areas such as drug discovery and development, where it can help identify potential drug candidates more efficiently. Integrating big data with other technologies like AI and machine learning enhances its impact. These tools can make the research process more streamlined and cost-effective by sifting through enormous datasets to uncover hidden correlations and generate hypotheses that guide further experimentation.
                                • Biotechnology research industry employment and average wages for nonsupervisory employees increased slightly during the first nine months of 2024, according to the US Bureau of Labor Statistics. Biotechnology research service industry sales are forecast to grow at a 5.1% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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