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Biotechnology Labs: Background and Overview
Table of Contents
Background and Overview
Operations
Reasons to Change
P2 Opportunities
Where To Go for P2 Help
Acknowledgements
Complete List of Links

Essential Links:

Biotechnology Industry Facts
Background and market statistics on the biotech industry.


The biotechnology industry capitalizes on capabilities of the biological sciences to develop highly innovative products with significant commercial potential. The collection of science and technologies used in biotech capitalize on the attributes of cells, DNA and biological systems to make products.

Biotech research ranges in scope from research and development, and on through testing and release of products to the marketplace. Most small biotech research firms pass on full-scale manufacture of approved drugs to larger biotech or pharmaceutical companies. Biotech research is highly specialized, working in a range from specific protein strands all the way down to single molecules.

Biotech products have quietly entered our daily life, for example:

This topic hub focuses on the aspects of pharmaceutical biotech involved in bench and pilot scale operations. Bench scale implies the discovery, and pre-clinical research and development phases of bio-engineered drug and pharmaceutical products. Pilot scale operations are those engaged in manufacturing of biotech products for Phase I, II, and III clinical trials and testing. Some aspects of full-scale operations are covered as well - where products licensed by the U.S. Food and Drug Administration (FDA) are manufactured for commercial sale.

Regulatory Bodies

The drug and pharmaceutical biotech industry is highly regulated. The main federal U.S. regulatory bodies for the industry are the Environmental Protection Agency (EPA), and the Food and Drug Administration (FDA) for drug and pharmaceutical biotech products. (The U.S. Department of Agriculture (USDA) regulates agricultural biotech products.)

Laboratory operations fall under the purview of the EPA and the Occupational Safety and Health Administration (OSHA). While labs must follow EPA and OSHA regulations, the agency of overriding concern for most drug and pharmaceutical biotech firms is the FDA.

Regulation is of immense concern to biotech firms, as violations can hamper the acquisition of investment capital, and/or delay production and marketing of a product line, as well as reduce shareholder, employee and public confidence. Delays such as these can cost a firm millions of dollars. As a result, biotech firms place a premium on compliance. Most have a full-time or part-time environment, health & safety (EHS) employee, and many employ EHS or compliance consultants.

Biotech labs are heavily involved with the regulatory agencies from the very beginning of a drug discovery. The real regulatory requirements ramp up as the product approaches field test readiness. The regulatory review process itself can take years, and consulting with these agencies during development can save additional periods (even years) of delay.

Industry and Market Overview

Biotechnology is one of the most research-intensive industries in the world. The U.S. biotech industry spent $17.9 billion on research and development in 2003 [1].

The drug and pharmaceutical discovery process can take from two to 10 years. This is followed by lab and animal testing, then a small clinical trial (Phase I) to check for safety and dosage. Phase II involves a larger clinical trial to check for efficacy and side affects. Phase III is an even larger clinical trial to monitor reactions to long-term usage. Typically, a few hundred biotech drug products and vaccines are engaged in clinical trials at any given time. Once phase III is complete the review and approval process begins. Getting a drug from startup to market may take more than ten years.

A minority of biotech firms have managed to become profitable since the industry emerged over 25 years ago. To date biotech has collectively failed to show a profit. According to the Wall Street Journal, publicly traded biotech firms have sustained cumulative net losses of $40 billion while investors purchased nearly $100 billion in stock [2].

Volatility of the sector is due to the nature of the field, which holds great promise and yet requires enormous risk-taking. The recent economy and competitive nature of biotech and pharmaceutical industries has proven difficult, causing many biotech firms to reduce staff, and some to fold. Small drug-related biotech companies are often acquisition targets for large pharmaceutical companies seeking to enhance their research in specific areas or to replace drugs losing patent protection. Acquisition by a larger company is often considered a successful business strategy, as shareholders can cash out and the larger companies have the capital and expertise to complete clinical trials and bring products to market.

On the brighter side, global revenues have risen from about $8.1 billion in 1992, to $22.7 billion in 2000, and then to $44.3 billion in 2004 [3]. Market capitalization, the total value of U.S. publicly traded biotech companies, at market prices, was $311 billion as of April 2005 [2].

Ernst & Young LLC forecasts that publicly traded US biotech companies could achieve their first aggregate profits in 2008, if present trends continue and Washington does not impose significant prescription drug price controls in the next several years [2]. Supporting this projection is a survey published by Business Insights. This survey found that 47% of industry executives surveyed believed that the biotech sector would show an annual growth of greater than 10% over the next five to 10 years, while a further 35% of those survey indicated a growth rate of 6-10% to be most accurate [3].

As of December 31, 2003, there were 1,473 biotechnology companies in the United States, of which 314 were publicly held. At that time, the U.S. biotechnology industry employed 198,300 people [3]. The United States is currently the world leader in the biotech field, although the industry growth rate currently is much higher in Europe and Asia, according to Ernst and Young. Biotech in the U.S. is about a decade ahead of the European field and even further ahead of the Asia-Pacific region in terms of revenue and number of companies. This may change in the future, as China and India are actively encouraging investment in biotech, and fully a third of all people on the planet live in these two countries.

Pollution Prevention Challenges

While competitive market conditions, heavy regulation, funding acquisition, and the length of time required to get a biotech product to market are serious challenges for biotech companies, many also strive for strong environmental performance and stewardship.

One environmental challenge for pharmaceutical companies and biotechs is that research done by labs must follow test methods and procedures prescribed by the FDA. It is possible to design tests using more environmentally benign methods or materials, and then petition the appropriate regulatory agency for approval, but this can be time-consuming and expensive. Similarly, once a drug and its manufacturing process is licensed by the FDA, it is typically too cumbersome to change the manufacturing process if a viable pollution prevention opportunity arises. Instead, companies tend to wait until the next generation of the product or similar products, to implement the pollution prevention improvement. However, proposed rule changes at the FDA may offer more flexibility for implementing pollution reducing process development changes in the future.

Sources:

[1] Biotechnology Industry Organization. 2006. Biotechnology Industry Facts.
[2] Agres, T. 2004. US Biotech May Leap into the Black. Drug Discovery and Development.
[3] Business Insights. 2005. The Biotechnology Market Outlook - Growth Opportunities and Effective Strategies for Licensing and Collaborations. Summary of report and Table of Contents).


 

The Topic Hub™ is a product of the Pollution Prevention Resource Exchange (P2Rx)

The Biotechnology Labs Topic Hub™ was developed by:

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Hub Last Updated: 1/16/2014