It’s one of the fastest-growing industries, and states across the U.S. have been eagerly courting the industry in the hopes of landing new manufacturing plants and research facilities. But what exactly is biotech? We all know some of the headline-grabbing buzz words the field has generated, including pet clones, ethanol fuel, stem cells and genetically modified food. But now let’s delve a little deeper.
What is biotech?
In simplest terms, biotech is anything and everything that combines technology with biology. That's according to BIO, the industry association for the biotechnology field. Biotech uses cellular and biomolecular processes to solve problems. That means the field harnesses the workings of the basic cell, including its manufacturing capacity, and uses molecules such as DNA and proteins to arrive at solutions.
Indeed, DNA – the genetic code that defines life – is considered the cornerstone of biotechnology. That’s because cells speak the same language, so to speak. What scientists observe in the DNA of one cell can be acted upon in another cell, even if that cell is from a different species.
DNA has given rise to hundreds of diagnostic tests, some of which even identify the right treatment and dosage. According to the biotech industry association, DNA sequence data is responsible for creating tests to identify the presence of genetically modified food products; tests to identify genetic susceptibilities to certain diseases; and tests that pinpoint the presence of microbial contaminants in good products or donated blood.
But biotechnological advances have touched all aspects of modern life. While biotech has had a particular impact on healthcare, it's also driving innovation in the fields of energy and agriculture. The biotech sector aims to heal, fuel and feed the world.
Specifically, companies are using biotech to develop vaccines and other products to combat and cure life-threatening illnesses, many of which had no treatment before. Biotech is also helping to reduce our carbon footprint, especially through the development of biofuels and biomass. And last but not least, farmers are using biotech advances to increase crop yields and mitigate the damage caused by insects and pests.
The potential of biotech
The biotech industry has really taken off since the early 1990s. According to BioWorld, the total value of publicly-traded biotech companies in the U.S., or the market cap, reached $360 billion in 2008. Revenues from publicly traded American biotech firms engaged in the healthcare field soared from $8 billion in 1992, to just under $60 billion in 2006.
It’s hard to pinpoint the total number of people working in biotech, since the industry has such diverse applications. But according to the Organisation for Economic Co-operation and Development, which is based in Paris, about 1.3 million people in the U.S. worked for biotech research and development firms in 2009. This number is expected to increase greatly in the next decade.
Many areas of the U.S. have created incentives to try to lure biotech companies. Pennsylvania, for example, has developed the Life Sciences Greenhouse program, which aims to commercialize lifescience and biotech research into revenue-generating products and companies. It also helps existing biotech firms that need guidance and economic support while they develop.
Georgia, on the other hand, has designated the area of the state between Athens and Atlanta as the Innovation Crescent. The state says it is well-positioned to spur biotech innovation there because it has a unique set of non-profit global health organizations, including the Centers for Disease Control and Prevention, and research institutions such as Emory University.
But Pennsylvania, Georgia and many other states face significant competition from North Carolina, Massachusetts and California, which are sometimes called the Big Three because these three states have the largest concentrations of biotech research and commercial activity.
Big players in biotech
Amgen is the world’s biggest biotech company. It develops and manufactures prescription drugs for serious illnesses. Two of the company's more prominent products are Aranesp and EPOGEN, which stimulate the production of red-blood cells in the body. The California company also makes XGEVA, which in 2010 was approved for use in treating bone damage that results from cancer. The company reported about $5 billion in profits on revenue of $14.6 billion for 2009.
Another large player in the biotech field is Genzyme. The company makes a drug called Campeth that is used to treat leukemia, and down the line may also be used to treat multiple schlerosis. The Boston company has focused on developing drugs and therapy that treat rare inherited diseases, kidney disease and immune diseases. Genzyme reported $422 million in profits on revenue of $4.5 billion in 2009.
The future of biotech
Over the next decade, biotech will only increase its role in the healthcare, energy and agriculture sectors. For example, according to BIO, more than 50 so-called biorefineries are being built in North America. These refineries will improve the production of biofuels and chemicals from renewable biomass, both of which can help reduce greenhouse gas emissions.
Companies in the healthcare field are putting renewed focus not only on finding cures for diseases, but also on tailoring treatments to people with an eye toward reducing health risks and side effects in coming years.
Last but not least, environmental engineering firms are increasingly using biotechnology to identify naturally-occurring organisms that can break down hazardous waste. That means in the future when there are oil spills and other disasters, biotech will be helping to ensure that these hazardous waste sites are cleaned up responsibly and that the cleanup agents don’t do more harm than good.