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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 3,400 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.

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.


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.

Industry size & Structure

The average biotech research and development firm operates out of a single location, employs about 67-68 workers, and generates about $7 million annually.

    • The biotech research and development industry consists of about 3,400 firms that employ 230,000 workers and generate $25 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), Aeras, 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

                                Coronavirus Update

                                May 8, 2022 - Delta Variant Encore Possible This Summer
                                • The Delta variant of the coronavirus may return this summer, according to biotechnology engineering professor Ariel Kushmaro and researcher Karin Yaniv. The pair are part of a team that developed sensitive arrays that can differentiate between variants in sewage. Wastewater gives indications of where the coronavirus is active, even as people are testing less.
                                • The coronavirus responsible for causing COVID-19 remains volatile and unpredictable, which makes it difficult to predict the features of the next variant. Many experts say that no evidence so far conclusively indicates whether the next variant is likely to be weaker or to have greater vaccine resistance. Low levels of vaccination, declining immunity without boosters, and vaccine inequity in a globalized world could increase transmission and aid viral mutations. Dr. Semih Tareen, a virologist and senior director of gene therapy at Sana Biotechnology, said that the biggest challenge right now is vaccine inequity.
                                • A key outcome of the coronavirus pandemic is “major advances” in vaccine technology, according to Max Herrmann, head of the healthcare team at investment bank Stifel. The successful use of messenger RNA (mRNA) vaccines is a gamechanger, with major long-term implications for how vaccines are developed. Traditional vaccines inject an inactive version of the virus or bacteria into the body, but mRNA vaccines work by instructing cells within the body to produce a harmless version of key proteins from a virus. An mRNA COVID-19 vaccine prompts the body to learn how to target the spike protein of the Sars-Cov-2 virus – the part that enables it to infect cells and cause Covid-19. There is optimism that mRNA vaccines could be used in cancer immunotherapy, which relies on getting the body’s own immune system to work against cancer cells.
                                • Experts say that a patent dispute emerging from the collaborative effort among scientists at the biotechnology firm Moderna Therapeutics and government researchers at the US National Institutes of Health (NIS) to quickly produce one of the world’s first successful COVID-19 vaccines has the potential to play a significant role in how future medications are developed. The two groups are now fighting over whether NIH researchers were unfairly left off as co-inventors on a pivotal vaccine patent application. Moderna has projected that it will make up to $18 billion on its COVID-19 vaccine this year. Inventor status could enable the NIH to collect royalties — potentially recouping some of its investment of taxpayer money — and to license the patent as it sees fit, including to competing vaccine makers in low- and middle-income countries, where vaccines are still painfully scarce. In the 1990s, the NIH was involved in a patent dispute with industry collaborators over the development of the HIV drug AZT. Two generics makers that wanted to challenge AZT patents argued that NIH researchers had been unfairly omitted from some of them — in which case, the patents could have been rendered invalid, or the NIH would have had the right to license them. But the court sided with the pharmaceutical companies, which argued that they had already prepared their patent application before using the NIH’s assay. The analysis, they said, simply confirmed the value of something that they had already invented. Experts say that the NIH’s more aggressive stance regarding its exclusion from the Moderna patent could suggest that the government will take a more active stance in managing intellectual property in the future.
                                • Demand for COVID-19 monoclonal antibodies treatment has risen during the pandemic. Drug manufacturer Regeneron sent out fewer than 25,000 doses of its REGN-COV monoclonal antibody drug per week nationwide in mid-July. The US Department of Health and Human Services was shipping about 168,000 doses per week in late August, with 78% of the orders going to regions of the country with low vaccination rates. Demand for sotrovimab, another monoclonal antibody authorized for use against COVID-19, spiked almost 300% in August. Experts say that the increase is driven by the spike in COVID-19 cases, better public awareness of the drugs, and doctors' successful experiences with them earlier in the pandemic.
                                • The biotechnology incubator that founded Moderna has launched another company focused on the therapeutic potential of messenger RNA, the single-stranded courier of genetic information that was key in the development of Moderna's COVID-19 vaccine. The company, Laronde, comes equipped with $50 million in funding from Flagship Pioneering and a lofty goal to upend how diseases are treated, through the use of so-called eRNA, or endless RNA. Laronde believes its eRNA platform can overcome challenges faced by other RNA technologies, as it has the potential to make medicines that are more stable, longer lasting, and that can be administered multiple times and in different ways.
                                • Industry experts say that a key challenge in vaccine development is determining which vaccine candidates should move forward through the costly clinical trial process. Running even a small study to test safety and dosing is beyond the reach of most academic groups, and smaller teams face an uphill struggle to get their candidates noticed. Scientists acknowledge that it would be a waste of resources to take every candidate to clinical trials. But they argue that it’s essential to have a diverse selection of COVID-19 vaccines in development.
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