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

                                May 15, 2024 - Strong Sales Growth Expected
                                • 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. Biotechnology research industry employment was unchanged during the first quarter of 2024 while average wages for nonsupervisory employees increased slightly, according to the US Bureau of Labor Statistics.
                                • Industry trade group Biotechnology Innovation Organization (BIO) hopes to quantify US dependence on Chinese contract development and manufacturing organizations (CDMOs) through a survey titled “Understanding Key Elements of the Biopharma Supply Chain.” BIO Chief Science Officer Cartier Esham said that the organization wants to use this “broad-based industry survey” to “understand and begin to quantify the magnitude of effort and time required to potentially decouple links to China CDMOs.” The survey comes as US lawmakers are advancing the BIOSECURE Act, which aims to block certain “biotechnology companies of concern” from receiving federal funding based on national security reasons. The bill would forbid federal agencies from contracting with drugmakers that use biotechnology equipment or services provided by a company of concern.
                                • Capital markets will “remain difficult to navigate” for public biotechnology firms in 2024, according to Renée Aguiar-Lucander, CEO of rare disease biotech Calliditas Therapeutics. “For good data and significant catalysts, there is certainly an ability to raise capital," she said. "The private market has been somewhat more resilient, but even there, it has been challenging for many companies over the last couple of years." Anne Osdoit, partner at Sofinnova Partners, said that neurology is likely to attract investment in 2024, in line with the trend in pharmaceutical research and development.
                                • The US Department of Agriculture's Animal and Plant Health Inspection Service has proposed the creation of five new regulatory exemptions for genetically modified plants. Biotech industry leaders have expressed concern that the US has been falling behind internationally as other countries move toward adopting regulations more favorable to gene-edited crops, according to Agri-Pulse. “We believe this science-based proposal can help smaller companies working in specialty crops work toward achieving nutrition and sustainability goals,” said Dan Jenkins, vice president of regulatory and government affairs at Pairwise, a firm that commercializes gene edited consumer food and agricultural products using CRISPR technology.
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