An Overview of Biotechnology and the Biotech Industry

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Biotechnology is an industry that is focused on the manipulation of living organisms to create commercial products. However, this is a very broad view of this fast-growing scientific industry.

By such definitions, centuries of agriculture and animal breeding would qualify as types of biotechnology. Modern understanding and usage of this science, also known as biotech, has been refined to create novel drugs and pest-resistant crops.

Such innovations began development when Stanely Cohen and Herbert Boyer demonstrated DNA cloning in their Stanford lab in 1973. Biotechnology has become intrinsic to many aspects of modern daily life.

The Technology

Since the first DNA cloning experiments, genetic engineering techniques have developed to create engineered biological molecules and genetically designed microorganisms and cells. Geneticists have also developed ways to find new genes and figure out how they work and created transgenic animals and plants.

In the midst of this bioengineering revolution, commercial applications exploded. An industry evolved around techniques such as gene cloning (replication), directed mutagenesis (directing genetic mutations) and DNA sequencing. RNA interference, biomolecule labeling and detection, and nucleic acid amplification were also developed and introduced.

The Biotech Markets: Medical and Agricultural

The biotech industry is largely divided into the medical and agricultural markets. Although enterprising biotechnology is also applied to other areas, such as the industrial production of chemicals and bioremediation, the use in these areas is still specialized and limited.

On the other hand, the medical and agricultural industries have undergone biotech revolutions. This has included new—and at times controversial—research efforts and development programs. Businesses have developed to capitalize on the boom in biotech development. These businesses have cultivated strategies to discover, alter, or produce novel biomolecules and organisms through bioengineering.

Biotech Startup Revolution

Biotechnology introduced a whole new approach to drug development that did not easily integrate into the chemically focused approach most of the established pharmaceutical companies used. This shift precipitated a rash of startup companies, starting with the founding of Cetus (now part of Novartis Diagnostics) and Genentech in the mid-1970s.

Since there was an established venture capital community for the high-tech industry in Silicon Valley, many of the early biotechnology companies also clustered in the San Francisco Bay Area. Over the years, countless startup companies have been founded to pursue this market.

Innovation hubs developed in the U.S. in such cities as Seattle, San Diego, North Carolina's Research Triangle Park, Boston, and Philadelphia. International biotech hubs include cities such as Berlin, Heidelberg, and Munich in Germany; Oxford and Cambridge in the U.K.; and the Medicon Valley in eastern Denmark and southern Sweden.

Designing New Drugs Faster

Medical biotech, with revenues exceeding $150 billion annually, receives the bulk of biotech investment and research dollars. This part of biotech gravitates around the drug discovery pipeline, which starts with basic research to identify genes or proteins associated with particular diseases that could be used as drug targets and diagnostic markers.

Once a new gene or protein target is found, thousands of chemicals are screened to find potential drugs that affect the target. The chemicals that look like they might work as drugs (sometimes known as "hits") then need to be optimized, checked for toxic side effects, and tested in clinical trials.

Medical Biotech Companies

Biotech has been instrumental in the initial drug discovery and screening stages. Most major pharmaceutical companies have active target-discovery research programs heavily reliant on biotechnology. Smaller upstart companies such as Exelixis, BioMarin Pharmaceuticals, and Cephalon (acquired by Teva Pharmaceutical) focused on drug discovery and development by often using unique proprietary techniques.

In addition to direct drug development, companies such as Abbott Diagnostics and Becton, Dickinson and Company (BD) look for ways to use new disease-related genes to create new clinical diagnostics.

Many of these tests identify the most responsive patients for new drugs coming onto the market. Also, supporting research for new drugs is a long list of research and lab supply companies that provide basic kits, reagents, and equipment.

For example, companies such as Thermo-Fisher, Promega, and a host of others provide lab tools and equipment for bioscience research. Companies such as Molecular Devices and DiscoveRx provide specially engineered cells and detection systems for screening potential new drugs.

Agricultural Biotechnology: Better Food

The same biotechnology used for drug development can also improve agricultural and food products. However, unlike pharmaceuticals, genetic engineering did not generate a rash of new ag-biotech startups. The difference may be that, despite the technological leap forward, biotech did not fundamentally change the nature of the agricultural industry.

Manipulating crops and livestock to optimize genetics to enhance utility and improve yields has been taking place for thousands of years. In a manner of speaking, bioengineering provides a convenient new method. Established agricultural companies, such as Dow and Monsanto (which was acquired by Bayer), simply integrated biotech into their R&D programs.

Plant and Animal GMOs

Most of the focus on ag-biotech is on crop improvement, which, as a business, has been quite successful. Since the first genetically modified corn was introduced in 1994, transgenic crop staples such as wheat, soybean, and tomatoes have become the norm.

Now, more than 90% of U.S.-grown corn, soybeans, and cotton are bioengineered. Although lagging behind bioengineered plants, the use of biotechnology for farm animal improvement is also pretty prevalent.

Dolly, the first cloned sheep, was created in 1996. Since then, animal cloning has become more commonplace, and it's clear that transgenic farm animals are on the immediate horizon—in 2019, AquaBounty (growers of genetically engineered salmon) received approval from the FDA to build their facility in Indiana and import their engineered salmon eggs, to be raised for food in the U.S.

Although genetically modified organisms (GMOs) have generated a lot of controversy in recent years, ag-biotech has become pretty well established. According to the latest available briefings from the International Service for the Acquisition of Agri-biotech Applications, plantings of genetically modified crops reached 189.8 million hectares in 2017, up from 185.1 million hectares in 2016.