Major market segments and trends in biotech industry - Essay Example

Biotechnology is a technology based on biology, especially when used in agriculture, food science, and medicine. Of the many different definitions available, the one formulated by the UN Convention on Biological Diversity is one of the broadest: "Biotechnology means any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use." (Article 2. Use of Terms). Another definition can be: Biotechnology is the manipulation of organisms to do practical things and to provide useful products.

2 Biotechnology is a scientific knowledge base--a rapidly evolving technology--that has economically valuable applications in diverse industries such as pharmaceuticals, medical diagnostics, agriculture, bio-environmental remediation and chemical processing. Biotech is still at an early phase and there are many opposing hypotheses about its future development.3 The biotechnology industry serves both medical and non-medical markets as well. The medical market includes human therapeutics and human diagnostics as well as applications in veterinary medicine.

Non-medical markets cover both agriculture and industrial applications. Agricultural applications cover making plants and crops pest resistant, providing improved seed quality, modulating growth and ripening times, enhancing nutrient content of foods, and providing simple and inexpensive diagnostics for use in field testing for contaminants and toxic materials. Industrial uses of biotechnology encompass many diverse sectors and include industrial enzymes, waste management, bioremediation, energy biomass, cosmetic formulations, and diagnostics for toxicity determinations.

4 The Medical Market Most of U.S. biotechnology companies are aiming at markets in human medical purposes. Nearly 29 percent of biotechnology companies are involved in therapeutics, while the primary focus of 17 percent of companies is in diagnostics. Biotechnology companies in the human health care field concentrate on discovering and creating ways to prevent, diagnose, treat, and cure the dozens of life-threatening and serious diseases and conditions for which satisfactory medical therapies or preventive agents currently do not exist.

The market for human therapeutic biotechnology products is expected to grow from $7.6 billion in revenues in 1996 to more than $24 billion in 2006, an average annual growth rate of 13 percent while the human diagnostics biotechnology product sector is predicted to grow at an average annual rate of 9 percent from $1.8 billion in 1996 to approximately $4 billion in 2006. Colony stimulating factors, insulin, human growth hormone, beta and gamma interferon, and vaccines comprises much of the outstanding market.

A 1996 survey of biotech drugs under development by companies belonging to the Pharmaceutical Research and Manufacturers of America (PhRMA) found that there were 284 biotechnology drugs in human trials, a 21 percent jump over the number (234) in development reported by PhRMA in the previous year. The survey also found 18 drug applications pending approval at the FDA and 49 in