Applications of New Technologies and Globalization Will be the Key to Growth in Biotechnology
- Summary -
Louis Ross (Global Emerging Technology Institute)
The area of biotechnology offers great promise in terms of growth, and, regardless of the current malaise the sector is in, it is primed for continued expansion. There are a growing number of public and private biotech companies all over the world in a number of regional "hubs", strongly supported by an increasing amount of public-private sector cooperation. Many believe that this cooperation is the key toward the development of new innovations. Governments are prioritizing the sector and promoting the increasing use of several emerging technologies. Following on the heels of developments in the U.S. and Europe, countries such as China, Singapore and, of course, Japan, have announced biotechnology initiatives of their own. The focus is on enhancing the ability to develop new drugs and developing innovative tools for drug discovery. This includes the pairing of existing technologies with new emerging technologies such as MEMS and nanotechnology in order to create value.
U.S. biotechnology companies are increasingly realizing the importance of cooperation, especially on the international level. They are finding an increasing number of customers for their services overseas. Though the U.S. currently is the largest market in terms of revenues, with nearly 70% of world market share, many companies lose money. There are more biotech companies in Europe number wise, but the firms are much smaller, with Asia bringing up the rear. Clearly, people have been investing in the potential of biotech for many years now, benefiting at times but also suffering from its volatility. The sector itself is very heterogeneous, with a large number of varied products, technologies and scientific approaches. Though promise has been great, the total number of products introduced by biotech companies has been relatively low. It will be very important for these companies to accelerate the introduction of new products and the pace of commercialization in order to continue to maintain the strong support the sector has received over the past decade, especially since 2000, in order to continue the strong flows of investment capital it has received.
Recently, biotechs have been plagued by low earnings and reported scandals in the midst of a global slowdown in economic activity. Considering the current state of the economy, the record amount of capital that was raised in 2000 has helped to maintain the viability of many firms. Many believe that biotechnology's potential is still formidable and that the introduction of new technologies will stimulate more product introductions. Advances in genomics, proteomics and pharmacogenomics help to support the favorable outlook for the industry. Sophisticated new tools to take advantage of these areas include biochips, mass spectrometers and gene sequencers. MEMS applications will lead to interesting break throughs in the development of "smart" medical devices and other equipment that relies on advanced sensors. The biomedical field is expected to be one of the first growth areas for the application of nanotechnology.
The pharmaceutical industry, which has been a key supplier of capital to biotech, has concerns over whether or not its own future earnings will grow due to a lack of strong drug pipelines by some key players. Cooperation with biotechnology firms is expected to increase in the near future. Changing government regulations and difficulties in getting drugs approved also have had a strong impact on both sectors. Big pharma is increasingly looking at biotech to replenish drug pipelines while biotech is increasingly looking at new technologies in order to develop novel ways to create drugs. The ability to make devices that function at very small scales promises to revolutionize biomedicine. Opportunities are emergent in the linkage between nanotechnology and molecular biology. Examples of note are development of complex, miniaturized drug-delivery systems, development of nano-scale chips for measurement and readout of single cell activity, DNA-based computing, novel biomaterials formed by combining nanotubes and biological matrix proteins. MEMS applications include technologies that provide precise control of biological fluids for both diagnosis and treatments. Supporting the work of smaller biotech firms by big pharma makes sense, and public support only serves to reduce the risk of making such investments.
Expect more alliances, especially cross-border and more development of novel methods to develop new drugs using new advances in MEMS and nanotechnology. Along with enhanced support from large pharmaceutical companies, expect biotechnology firms to receive more benefits from overseas business opportunities. Venture companies in bio-MEMS and bio-nanotechnology spaces will find strong support outside of the U.S. Multinational business development models will become the standard for such firms in these emerging technologies as they strongly relate to manufacturing in the long term and need the kind of engineering talent that is found outside of the U.S. in Asian and European countries. They will also benefit from the drive by these countries to build their own biotechnology sectors.