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What is Biotechnology and How Did It Make the Biotech Industry

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Abbott Labs CEO Speaks
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What is Biotechnology?

Merriam Webster defines biotechnology as “the manipulation (as through genetic engineering) of living organisms or their components to produce useful usually commercial products (as pest resistant crops, new bacterial strains, or novel pharmaceuticals).” Although this definition could broadly cover thousands of year of agriculture and animal breeding, the term biotechnology (often abbreviated as “biotech”) usually means the gene engineering technology that revolutionized the biological sciences starting with Cohen and Boyer’s demonstration of DNA cloning in their Stanford lab in 1973.

The Technology of Biotechnology

Since the first DNA cloning experiments 40 years ago, genetic engineering techniques developed to create engineered biological molecules, genetically designed microorganisms and cells, ways to new find genes and figure out how they work, and even transgenic animals and plants. In the midst of this bioengineering revolution, commercial applications exploded and an industry developed around techniques like gene cloning, directed mutagenesis, DNA sequencing, RNA interference, biomolecule labeling and detection, and nucleic acid amplification.

The Two Main Biotech Markets: Medical and Agricultural

The biotech industry broadly segments into the medical and agricultural markets. Although enterprising biotechnology is also being applied to other exciting areas like industrial production of chemicals, and bioremediation, the use in these areas is still specialized and limited. On the other hand, the medical and agricultural industries have each undergone a biotech revolution with new—and often controversial— research efforts, development programs, and business strategies to discover, alter, or produce novel biomolecules and organisms using bioengineering.

The Biotech Start-Up Revolution

Biotechnology introduced a whole new approach to drug development that did not easily integrate into the chemically-focused approach most of the established pharmaceutical companies were using. This shift precipitated a rash of start-up companies starting with the founding of Cetus (now part of Novartis Diagnostics) and Genetech in the mid-1970s. Since there was an established venture capital community for the high-tech industry in Silicon Valley, many of the early biotechnology companies also clustered in the San Francisco Bay area. Over the years, several hundreds of start-up companies have been founded and hot-spots have also developed in the US around Seattle, San Diego, North Carolina's Research Triangle Park, Boston, and Philadelphia, as well as a number of international locations including areas around Berlin, Heidelberg, and Munich in Germany, Oxford and Cambridge in the UK, and the Medicon Valley in eastern Denmark and southern Sweden.

Medical Biotechnology--Designing New Drugs Faster

Medical biotech, with revenues exceeding $150 billion annually, receives the bulk of biotech investment and research dollars. Even the term “biotech” is often used synonymously with this segment. This part of biotech constellates around the drug discovery "pipeline" that starts with basic research to identify genes or proteins associated with particular diseases which could be used a drug targets and diagnostic markers. Once a new gene or protein target is found, thousands of chemicals are screened to find potential drugs that affect the target. The chemicals that look like they might work as drugs (sometimes known as "hits") then need to be optimized, checked for toxic side effects, and finally, tested in clinical trials.

Who are the Biotech Companies?

Biotech has been instrumental in the initial drug discovery and screening stages. Most major pharmaceutical companies have active target-discovery research programs heavily reliant on biotechnology, and smaller new companies such as Exelixis, BioMarin Pharmaceuticals, and Cephalon do focused drug discovery and development often using unique proprietary techniques. In addition to direct drug development, there are companies like Abbott Diagnostics and Becton-Dickenson that are looking for ways to use new disease-related genes to create new clinical diagnostics. A lot of these tests identify the most responsive patients for new drugs coming on the market. Also, supporting research for new drugs, is a long list of research and lab supply companies that provide basic kits, reagents, and equipment. For example, companies such as Life Technologies, Thermo-Fisher, Promega and a host of others provide lab tools and equipment for bioscience research, and companies such as Molecular Devices and DiscoveRx provide specially engineered cells and detection systems for screening potential new drugs.

Agricultural Biotechnology--Better Food

The same biotechnology used for drug development can also improve agricultural and food products. However, unlike with pharmaceuticals, genetic engineering did not generate a rash of new ag-biotech start-ups. The difference may be that, despite the technological leap forward, biotech did not really fundamentally change the nature of the agricultural industry. Manipulating crops and livestock to optimize genetics to enhance utility and improve yields has been going on for thousands of years. In a way, bioengineering just provides a convenient new method. Established agricultural companies, such as Dow and Monsanto, simply integrated biotech into their R&D programs.

Plant and Animal GMOs

Most of ag-biotech focuses on crop improvement, which, as a business, has been quite successful. Since the first genetically modified corn was introduced in 1994, transgenic crop staples such as wheat, soybean, tomatoes have become the norm so that now more than 90% of US grown corn, soybeans, and cotton are bioengineered. Although lagging behind bioengineered plants, use of biotechnology for farm animal improvement is also pretty prevalent. Remember Dolly, the first cloned sheep? That was in 1996. Now animal cloning is common and it's clear transgenic farm animals are on the immediate horizon based on headlines highlighting recent developments on the Federation of Animal Societies' website. Although genetically modified organisms (GMOs) have generated a lot of controversy in recent years, ag-biotech has become pretty well established. According to the 2011 International Service for the Acquisition of Agri-biotech Applications' (ISAAA) 2011 report 160 million hectares of GMO crops were planted in 2011 with sales of over $160 billion in engineered grain.

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