Biotechnology Product Manufacturing
Companies in this industry manufacture vaccines, toxoids, blood fractions, and culture media of plant or animal origin. Major companies include Amgen, Biogen, Genentech, and Gilead Sciences (all based in the US), as well as Bayer and Merck Group (both based in Germany), CSL (Australia), Novo Nordisk (Denmark), and the biotech research arms of major international pharmaceutical companies such as Sanofi (France).
The global biotechnology market is projected to reach about $4 trillion by 2033, at a compound annual growth rate (CAGR) of about 12% from 2024-2033, according to Precedence Research. The top region for biotechnology is the US, followed by China, according to Statista. Other markets include Denmark, the Netherlands, South Korea, the UK, Switzerland, and Taiwan, among others.
The US biotechnology product manufacturing industry generates annual revenue of about $30 billion and has about 350 establishments in the US. Because many drugs are now developed using biotechnology, the biotechnology and pharmaceutical industries overlap considerably. A separate industry report covers Pharmaceutical Manufacturing.
Competitive Landscape
Biotech firms face stiff competition from major pharmaceutical manufacturers and other companies seeking to be first with a new product or discovery. Development is often focused on high-demand, profitable markets such as cancer or rare disease treatment. Biopharmaceutical companies depend on gaining regulatory and insurance coverage approval for new treatments. They may also count on participation in government research or expedited approval programs.
Because the market for potential products is so large, small biotechnology companies can co-exist successfully with large ones if they have expertise in a particular line of research. Smaller companies often team up with larger manufacturers, financial backers, or marketing partners because R&D and commercialization processes are lengthy and costly. The US industry is highly concentrated: the largest 50 companies account for about 90% of revenue.
The US is the largest biotechnology market. The Netherlands, Germany, Italy, Ireland, and Belgium are among the top export markets for US biotechnology products. Imports of drugs to the US, partly from foreign manufacturing plants of US companies, come primarily from Ireland, Germany, Switzerland, South Korea, and Italy are the top import markets.
Competitive Advantages:
Effective Pricing Strategies - As pressure on companies to lower drug prices intensifies, biotech firms must explore ways to maximize efficiencies in operations, especially as biosimilars become more available. Adoption of digital and AI technologies could help boost efficiencies in the R&D lab, a major source of expenditures.
Innovation - Companies must keep up with scientific innovations to stay relevant in the research lab and ward off financial risk from patent expirations. Use of new biological techniques such as cell therapy and gene editing are driving innovation in cancer research and other disease fields.
Adjusting to Regulatory Changes - Potential ramifications of the UK's exit from the EU and the potential repeal of US Affordable Care Act are creating unease in the biotech industry. Negative implications include shifting drug pricing models and fundraising and dealmaking challenges.
Companies to Watch:
Amgen is one of the oldest and most successful global biotech companies, with offerings that fight infection, anemia, and other conditions in cancer and kidney disease patients, as well as rheumatoid arthritis and other ailments. The company is investing in biosimilar research to ward off impacts of patent loss on key products, and it has R&D programs in a wide range of specialties.
Gilead Sciences has climbed its way up the biotech ladder as a maker of infectious disease treatments. While the company's lucrative HIV franchise is losing some value due to increased competition, Gilead is experiencing growth in sales of newer antivirals including hepatitis medicine Epclusa and is strengthening its R&D programs in new fields such as oncology and inflammation.
Biogen is another long-time player in the relatively young industry. Despite a troubled regulatory history over one top selling drug, Tysabri, the company has built success through treatments for immune and neurological conditions such as multiple sclerosis and Crohn's disease. The company is widening its portfolio through R&D, acquisitions, and partnerships.
Products, Operations & Technology
Major products of biotechnology product manufacturers include biologics, which account for about 30% of the industry's revenue. This is followed by blood
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