How to Identify the Best Biotech Companies in 2021

The biotech industry has boomed in recent years. Touted as the next industrial revolution, some of the best biotech companies are on the path to developing innovative and sustainable solutions for real-world problems.

According to a market research report, the global biotech industry was valued at around £545 billion in 2020. In 2019, 4 out of 10 were produced by biotech companies.

Medicine is often confused with being the sole vertical of the biotech industry. Of course, medical markets form a large part of this industry, though, in reality, biotech has applications in several other verticals like manufacturing, materials, chemicals, agriculture, food, and energy.

The article will look at the function of biotech companies and how leading organisations set themselves apart from competitors.

What Does a Biotech Company Do?

A company that uses living organisms like bacteria or enzymes to develop end products falls under the biotech category. These companies differ from pharmaceutical companies as they use living organisms rather than chemicals.

Understanding DNA and developing genetic engineering techniques such as gene cloning, directing genetic mutations are factors that worked in favour of biotech companies. RNA interference, which is now being used to deliver vaccines to millions of people worldwide, is a product of the biotech industry.

Biotech companies start by researching the genes or proteins associated with the diseases. Once identified, they are used as targets to find the chemical or drug that could affect the target. Similarly, in the agriculture sector, plants are studied to find ways to improve their quality and yield.

The end product has to go through different levels of testing, clinical trials, market authorisations, and regulatory approvals.

How to Identify the Best Biotech Companies in 2021?

Biotech introduced a new way of discovering drugs faster. The venture capital market supporting technology companies showed interest in the biotech industry and fostered an environment for growth. This led to many biotech start-ups sprouting all over the world.

Here are few features to consider when looking for the best biotech companies:

Focus Area

Biotech companies have diverse focus areas. For example, some of the highly pursued focus areas in Europe are immunotherapies, antibodies, metabolic diseases, brain and neuronal therapies, service providers, and vaccines, among others.

The questions you need to ask are, what problem is the company trying to solve? What solution are they proposing? What is their approach towards the solution?

For example, the construction industry in Europe is looking for sustainable materials and ways to reduce pollution. Green Basilisk is a company based in the Netherlands that has developed a solution to solve these concerns. Their self-healing concrete uses bacteria to produce limestone, and is a sustainable solution with a longer lifespan and less maintenance than regular concrete.

BioNTech, together with Pfizer, became the first company that leveraged RNA therapeutics to commercialise the COVID-19 vaccine.

These companies are solving real-world problems, improving the quality of life on this planet.

Funding

The amount of money raised by companies during their financing rounds reflects investor confidence in the product. However, funding is not the only factor that distinguishes companies; this is where the feasibility of the idea, research, test results come into the picture.

An investor would not just give away millions if they did not believe in the idea’s merit. The European biotech industry is a prime example of funding. By putting forth innovative solutions, the industry raised over £6.7 billion in funds in 2020. Financing in this industry is expected to grow in the coming years.

Development Stage

What stage is the product in? Is the company in the research stage? Have they started with their trials? Or is the end product available in the market? Companies in the preliminary stages are not inherently excluded from the best companies list. They might possess great ideas, but they need an action plan to translate the concept into a product.

For example, the drug by AB Science has shown remarkable results in the phase IIB/III study for Alzheimer’s. The trial will now proceed to the III phase. Similarly, CRISPR Therapeutics is in the phase I trial for its gene-edited therapies.

The biotech industry is here to stay. Financial institutions are starting to recognise the value of such companies and the innovation they bring into different sectors. Moreover, the fast-track solutions developed by the industry in the face of the global pandemic are shining a light on biotech’s potential.

The best biotech companies are developing solutions, solving problems while considering social, ethical, and environmental concerns. With improvements in biotechnology and increased investor support, the objective of creating a sustainable bio-economy does not seem that far fetched.