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Challenges the Biotechnology Industry Faces

Advances in technology have increased the pace of biotechnological developments. Innovations in genomics, molecular biology, cellular and tissue engineering, bio-imaging, and new drug discovery and delivery techniquesare expected toimprove the quality of care by enhancing diagnostic capabilities and substantially expanding therapeutic alternatives.The increasing demand for biotech-based diagnostics and therapeutics and growing R&D investments are bolstering the biotechnology industry'sgrowth. While the industry has many growth drivers, a few challenges continue tolimit the scope of application; these are briefly discussed below.

Risky Product Development Process

Product development is a risky process for biotech companies. Lengthy development period and massive investments pose hurdles to new product development, and the expense could run into billions of dollars — the availability of which represents another key obstacle in the process. Patent protection allows biotech companies to protect their interests, buying them time to recover R&D investments. Moreover, even once the patents expire, these companies have a stronger foothold in the market that their peers.

After product innovation, biotech companies undergo an onerous and lengthy regulatory process to commercial their product developments. Many a time, during the course of clinical trials, the product developed may turn out a non-viable option. The entire process could take as long as a decade, during which the company is not making any profit on the product. Moreover, possible technological changes during the developmental phase could adversely impact the product. As per several sources, more than 35% of drugs fail to cross the preclinical stage of drug development, around 65% fail in Phase II, and nearly 40% are knocked out at the last stage. All of these represent enormous funds and time. Thus, biotech companies' stocks are always dynamic.


Soaring healthcare expenses and initiatives to curb healthcare costs pose a significant threat to biotechnological product development, as these products can be up to ten times more expensive than the common pharmaceutical pill. Despite the effectiveness of biotech-based therapies, they create a significant burden on the healthcare system. The adoption of these drugs far beyond reach in the case of emerging economies. Thus, the higher price and subsequently limited adoption of biotech therapies questions the overall development process.


In the continuously developing biotechnology industry, it is now possible to decipher a human genome. While it has functionally become possible to know that a 6-year-old may develop serious heart problems later in life, it has also raised questions on the privacy of protecting a genome. With growing research opportunities for genomic studies through data sharing, genetic privacy has emerged as a legitimate challenge for researchers.

Societal Concerns

The fast-paced biotechnology field is rapidly evolving. Recent developments in genomics and technologies for developing artificial genes imposeseverethreats to humans and the environment in general.Societal concerns about the risk of bioterrorism, production safety, ethical issues, and environmental concerns limit industry growth.

Apart from these challenges, the biotech industry faces challenges of patent infringement, high R&D cost, and low R&D productivity.


Latest Thinking

Where the Industry is Heading

The biotechnology industry has become an innovative driver for pharmaceutical developments. The pharmaceutical industry is gradually shifting from developing blockbusters to developing personalized medicines. New personalized medicines are being developed using genetic engineering based on proteomics, genomics, and systems biology. As per U.S. FDA data,over 5% of the approved drugs are developed using genetic engineering. Moreover, biotech startups have started receiving funding for the development of innovative technologies. Biotech IPOs, in the last few years,have also been changing the industry dynamics. Some of the recent innovations changing market dynamics are:

Public-Private Funding Aids Biotech Companies in the Battle against the COVID-19 Pandemic

At present, there are many national and international level initiatives to support the development ofCOVID-19 therapies. The Department of Biotechnology, India, has announced plans to fund 16 companies for the development of vaccines, drugs, and devices to fight the COVID-19outbreak. The department had received more than 500 applications from companies developing vaccines and drugs against the disease.

Zydus Cadila and Bharat Biotech are among the companies that received funds for developing a vaccine for SARS-CoV-2, which causes COVID-19. Cadila is developing a DNA vaccine, and Bharat Biotech, Hyderabad, is using the inactivated rabies vector platform to develop a vaccine. The Department of Biotechnology, India, granted funds to the National Institute of Immunology for developing a novel vaccine evaluation platform. The Serum Institute of India also received grants to scale up the phase III human trials of a recombinant BCG vaccine.

Mylab Discovery Solutions Pvt. Ltd, Ubio Biotechnology Systems Pvt. Ltd, HuwelLifesciences,Dhiti Life Sciences Pvt. Ltd, Bigtec Pvt. Ltd, MagGenome Technologies Pvt. Ltd, and Yaathum Biotech Pvt. Ltd.received funding support from The Department of Biotechnology, India. IndieBio, a life sciences startup incubator in the U.S., announced plans to fund selected biotech companies developing diagnostic tests or therapies for COVID 19 a sum of USD 250,000. It has also announced plans to provide lab space and mentors in either New York or San Francisco, along with the funding.

Maturing Biotech Industry Boosting IPO Totals

The top ten biotechIPOs in 2019 were valued at USD 500–1,000 million. Straits Business Group analyzed a key reason for the IPOs — most of the biotech companies that went public last year had a common goal of becoming standalone, commercial-stage biopharmaceutical companies.

The IPO of Genmab, the Denmark-based antibody specialist, is considered as one of the high valued IPOsof 2019. The company had discovered Darzalex, Johnson &Johnson's star multiple myeloma treatment. With the new funds, the company accelerated research on the antibody-drug conjugate (ADC), tisotumab vedotin, developed in collaboration with Seattle Genetics for cervical cancer. The company is also initiating clinical trials of tisotumab vedotin for other indications, along with trials for several other molecules, including another ADC (enapotamab vedotin) and a bispecific antibody targeting CD3 and CD20.

The IPO of BridgeBio Pharmawas another notable fundraising of 2019. The company raised USD 135 million initially in 2017, and later in 2019, it raised USD 299 million in private funds. Further, in 2019, the company went public in a deal size worth USD 348.5 million. It is actively working in the field of genetic disease programs and aims to develop treatments for a rare, fatal, genetic disease, molybdenum cofactor deficiency type A andtransthyretin amyloidosis.



We provide customized research solutions through a holistic approachto help our clients achieve their goals. Our solutions cover the inclusions listed below.



Biotechnology is a fast-growing scientific industry engaged in the manipulation of living organisms for the production of commercial products. Straits Research provides an array of solutions that help biotechnological companies sustain in the market by identifying competitiveness. Some of our solutions include market forecasts, pipeline analysis, consumer behavior analysis, technological analysis, and regulatory landscape, among others.

Our solutions compriseaccurate insights intothe value chain and market trends to help clients create highly effective strategies for the R&D of new products, as an effective value chain is the foundation of successfully manufacturing, marketing, and selling a biotech product. For instance, with the goal of manufacturing new commercial products, one of our clients, a Japanese biotech company, sought to understand the relevant market dynamics. We provided the company with a comprehensive solution comprising raw material analysis, raw material pricing, and a study of marketing strategies employed by other players.

The biotech industry is currently in the phase of technological advancement, where new technologies are being marketed every now and then. We help our clients in making crucial decisions regarding the R&D of new biotech products in terms of market competition for the product, competitive pricing, regulations and legislations in several different countries, and many other vital insights.

Identifying Consumer Behavior and Market Penetration

A European biotechnological company came to Straits for help in identifying the potential penetration of gene therapy for a rare disorder globally. The client was interested in figuring out which factors would influence physicians to prescribe an expensive gene therapy over the drug.Data on peak sales against all the molecules in the pipeline was also requested.


Straits Research provided the company market forecasts for its gene therapy, along with other substitute therapies. We implemented consumer (physician) behavior and pricing analysisto help the client finalize the pricing and formulate an effective marketing plan for the gene therapy.


  • Consumer Behavior Analysis
  • Market Analysis
  • Pricing Analysis
  • Market Strategy Analysis

Detecting Potential Threat and Competition

A clinical-stage biotech company went public last year with the objectiveof becoming a standalone commercial player. The client was interested in understanding the market dynamics and market competition to help evaluate its market position.


Straits Research conducted thorough research to understand the company's clinical pipeline. Our research teamanalyzed established biotech market players that evolved from clinical-stage companies to understand their growth strategies, operational strategies, and business models anddevelop a suggestive matrix for the client encompassing business models and operational strategies.

We also analyzed the go-to market strategies to help strategize various initiatives for the client. Straits Research also helped the client position itself in an extremely competitive market environment based on the competitive ranking.


  • Pipeline Analysis
  • Competitive analysis


Our Clientele
  • VTT Technical Research Centre of Finland Ltd
  • Takis Srl.
  • Debiopharm
  • JW Bioscience
  • Jennewein Biotechnologie GmbH
  • Ajinomoto

Covid-19: What happened and the What next

Impact of the COVID-19 Pandemic on the Biotechnology Industry

The impacts of the COVID-19 outbreak on the biotechnologysector, in particular, are both immediate and potentially long-lasting. Fortunately, science is capable of significantly impacting the ongoing public health crisis. Pharmaceutical and biotech firms around the world are collaborating with policymakers to address the COVID-19 pandemic, from funding vaccine production to supply chain issues in medicine preparation. Several diagnostic companies are currently focusing on developing tests for SARS-CoV-2, the COVID-19-causing coronavirus. In terms of disruption of biotech ventures, anything from the disruption of the supply chain to work-from-home orders and pressure on healthcare systems will mean delays in the production of therapy and medication.

With the increasing number ofCOVID-19 research programs, the number of attempts to use messenger RNA for creating vaccines that train the body to defend against the virus is increasing. The biotech firm Moderna (MRNA) already has an mRNA vaccine in the clinic. BioNTech (BNTX) is working with Pfizer (PFE) and Translate Bio (TBIO)to developan mRNA-based SARS-CoV-2 vaccine candidate, BNT162.Other companies are working on antibody therapies, including Regeneron Pharmaceuticals (REGN) and Vir Biotechnology (VIR), which is collaborated with Biogen (BIIB).

A few of the grants by government organizations to fund R&D efforts that aim to contain COVID-19 are listed in the table below, with a brief description.

Source: Invest India (.gov)

In light of the present COVID-19 situation, biotechnologists are channelizing efforts to develop solutions for combatting the crisis. These solutions will not only help bring the current situation in control but also strengthen our knowledge of future viral diseases.Many Indian firms are vigorously working toward solutions that can alleviate the COVID-19 crisis by working to produce tests that will provide faster, more efficient results or a vaccine that will protect us from the infection.

  • In March 2020, Mylab Discovery Solutions was the first Indian firm to receive regulatory clearance from the Central Drugs Quality Control Organization (CDSCO) for its COVID-19 diagnostic test, following an assessment by the Indian Medical Research Council. The research kit was built in a record six weeks and called the Mylab PathoDetect COVID-19 Qualitative PCR kit.

With approximately 1 million people testing positive for COVID-19 and about 3 billion people in lockdown around the globe, biotechnology and drug discovery companies are involved in an unparalleled effort to develop pandemic vaccines.

  • Vir Biotechnology has collaborated with GlaxoSmithKline and snagged a USD 250 million investment in the process of developing a treatment for COVID-19. The collaboration will pool their resources to develop vaccines and treatments for coronaviruses, starting with two antibodies against SARS-CoV-2, the virus behind the current pandemic, which could hit phase II studies.

As of April 2020, India's Zydus Cadila, Serum Institute, and Bharat Biotech are among the global firms working on the COVID-19 vaccine.As per the World Health Organization, two companies are at phase I (out of three phases) of clinical evaluation, while 42 others are at the pre-trial stage.

  • Serum Institute of India/Codagenix:The Serum Institute of India in Pune has collaborated with Codagenix, a U.S.-based biotechnology company. Codagenix has an algorithm to produce any virus at a rapid speed.
  • Bharat Biotech/FluGen: An intranasal vaccine for Coronavirus, 'CoroFlu,' is under development with the vaccine-maker Bharat Biotech. An international collaboration of virologists at the University of Wisconsin-Madison and the vaccine companies FluGen and Bharat Biotech have begun the development and testing of CoroFlu. FluGen'slab will insert gene sequences from SARS-CoV-2, the novel coronavirus that causes the disease COVID-19, into M2SR so that the new vaccine will also induce immunity against the coronavirus.
  • CanSinoBiological: CanSino Biological is taking its vaccine candidate for Ebola into phase II trials after preliminary safety data indicated efficacy against COVID-19. CanSino will develop the vaccine along with the Beijing Institute of Biotechnology and the Academy of Military Medical Sciences.
  • Moderna: The mRNA platform vaccine of Moderna is the most awaited candidate in the fight against COVID-19. The vaccine has already entered clinical trials in the U.S. With funding from CEPI, its tech, according to the company, offers efficacy, speed of development, production scalability, and reliability. A similar technology is being utilized for vaccines for other infectious diseases.
  • Inovio: The U.S.-based vaccine maker Inovio has recruited up to 40 volunteers to participate in clinical trials for its anti-COVID-19 vaccine. The use of its candidate had shown promising immune response to the coronavirus in animals.
  • University of Oxford: A vaccine candidate developed for other infectious diseases, such as MERS, influenza, TB, Chikungunya, and Zika, has entered phase I clinical trials for the novel coronavirus. The University of Oxford expects to complete the study by May 2021.
  • Pfizer/BioNTech: The U.S. drug giant Pfizer has made an upfront payment of USD 185 million to the vaccine maker BioNTech for developing its mRNA vaccine. The vaccine is predicted to go on human trials in April 2020. The joint venture holds the potential to supply millions of vaccine doses by the end of 2020.