Introduction

Biotechnology is the exploitation of biological processes for industrial or other purposes. In this chapter we will discuss the biotechnology industry's development from its initial manifestation – the biotech start-up company through its maturation and development to yield integrated companies contributing products on a global scale – and what factors contribute to the success and failure of the entrepreneurial application of the science described elsewhere in this volume. This industry appeared in the 1970s, initially in the USA (an opportunity created by intellectual resource and inherent entrepreneurial spirit allied to a powerful capitalist environment) and soon afterwards in Europe and Asia as well. Our aim in this chapter is to give you a feel for what you need to have, and what you need to do, if you are to start up and successfully run a biotechnology company.

What is biotechnology used for?

As an introduction, we will review what companies are using biotechnology for, to see why some areas have been successful and others have failed.

The applications: medicine

The significant proportion of biotechnology investment has been directed to health-care, and specifically in the discovery of new drugs. Patents provide legal protection and mean that an effective new drug can be sold at high price for as long as the patent on it prevents someone else from making and selling it at a lower price. Once a drug comes off patent it can be manufactured as a generic, and sales and profit margins for the originator rapidly plummet.