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 3,900 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 74 workers, and generates about $7-9 million annually.

    • The biotech research and development industry consists of about 3,900 firms that employ 287,000 workers and generate $30 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 1, 2022 - Biden Administration Eyes Sanctions On China
                                • China may lose access to additional types of critical US technologies including biotechnology, according to some experts. The Biden administration has already imposed sweeping computer chip sanctions on China and is looking at other restrictions. Areas “on my radar” for possible additional export controls include quantum computing, biotechnology, and artificial intelligence, said Alan Estevez, Commerce Department undersecretary for industry and security. Biotech firms often maintain a presence in the US and China. In China, they harness large reams of patient data, fast and cost-efficient clinical trials, local tax cuts, government funding, and subsidized offices to advance their research. Operations in the US tap the country’s R&D talent and work toward FDA regulatory approval and commercialization. It’s not uncommon to see biotech startups increasingly labeling themselves “born global” and employing executives with experience in China, the US, and other countries.
                                • President Biden signed an Executive Order (EO) creating a National Biotechnology and Biomanufacturing Initiative. The EO states that the US Department of Health and Human Services will invest $40 million to expand the role of biomanufacturing for active pharmaceutical ingredients, antibiotics, and the key starting materials needed to produce essential medications and respond to pandemics. The US Department of Defense will invest $1 billion in bioindustrial domestic manufacturing infrastructure over five years to catalyze the establishment of the domestic bioindustrial manufacturing base that is accessible to US innovators. President Biden said that the EO is intended to “... ensure we can make in the United States all that we invent in the United States.”
                                • Layoffs continued into the second half of 2022 amid clinical setbacks and a tough market downturn, according to Fierce Biotech. Twenty-one companies announced layoffs in July and August, following 28 announcements during the second quarter of 2022. Venture capital firms have become more selective with funding because of the biotech market downturn and geopolitical uncertainties, according to analytics firm GlobalData.
                                • Researchers at the University of Arkansas will collaborate with the National Institutes of Health (NIH) and Google to develop software and cloud-based artificial intelligence (AI) modules for biomedical research. Working with large biomedical image datasets is key for identifying unique image features and predicting disease, but utilizing such large datasets is difficult without the use of advanced technologies such as AI and cloud computing. The goal of the project is to help researchers and clinicians understand how to implement these technologies into their work.
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