Biotechnology Forecast for 2019
By: Amir Kaufman, Posted: February 21, 2019
The last few years have witnessed explosive growth within biotechnology across all segments of the industry. It is estimated that the global biotech market will command $727.1 Billion USD by 2025. Biotech looks poised to continue this meteoric growth for 2019 and beyond.
With Compounded Annual Growth rates (CAGR) rates across segments ranging from 6%-11%, here is a look at key segments within the industry and some key points to watch in 2019:
Reagents – The reagents market is expected to grow at a CAGR of 7.4% per year from 2019 to 2025. One of the main drivers of this growth rate is the continued focus on stem cell research. This focus is driving new research and innovation within the pharmaceutical industry. And while the US alone accounts for over 73% of the market, there is also continued growth in the Asia-Pacific region.
There are challenges to be aware of as well. A broad move among governments to increase regulation within biotech is underway and complex new regulatory requirements add cost to an already expensive industry. There are also continuing concerns over contamination as biotech companies struggle with scale-up to industrialization.
Biopharmaceuticals – Outlook for this segment is so strong that some speculate that it could become the core of the entire pharmaceutical industry. Current revenue projections for biopharmaceuticals is estimated at $163 Billion USD, accounting for 20% of the pharmaceutical industry as a whole. The current growth rate of 8% is expected to continue well into 2019 and beyond.
The impact of biosimilars will play an increasing role in this segment similar to the one played by generics within traditional pharmaceuticals and is expected to reach $15 Billion USD by 2020. By placing price pressure on biologics producers, both biologics and biosimilars will need to move to more agile time-to-market processes. In an industry already limited by lower yields and long process times, both sub-segments will need to look to technology to scale to industrialization, improve time to market and strive for higher operating efficiencies.
Agricultural Biotech – While smaller in overall market share, agricultural Biotech continue to see growth of 10.1% CAGR into 2019 and beyond to reach $39.5 Billion USD by 2022. Spurred both by increased demand for food as well as the biofuels and bioplastics markets, strong investment continues to pour into agricultural biotech. The development of new variants of transgenic seeds that exhibit herbicide, insect and virus tolerance as well as increase crop yield is a particularly large driver of this segment.
Compared to other segments, agricultural biotech carries a short term critical imperative. It is estimated that global food production will need to double within 30 years to sustain population growth. However, unlike biotech segments within the medical sciences, agricultural biotech has less of a barrier for adoption of new technologies. Applications such as precision agriculture technology for improved yield on small farms, as well as a rise in the industrialization of non-traditional crops such as edible algae-based products and in the development of urban farming are already available within this segment.
Biobanking – The smallest biotech segment, bio-banking, should not be overlooked due to its strategic position for future of R&D for biotech companies. This segment too has seen a 7.8% CAGR and is expected to reach $3.05 Billion USD by 2025. It also carries many of the same constraints to growth and industrialization as other segments such as the need for precise control, and proper storage.
A Common Obstacle
While the outlook for the biotech industry looks strong for 2019 and beyond, a review of available resources for all segments uncovers a single trend that impacts all segments. Each segment lists as an obstacle the difficulty in industrialization of life science and biotech driven companies. It is a common concern and there is a keen awareness of the need for inclusion of new technologies such as the power of the cloud, IoT and the use of platforms and technologies used within traditional manufacturing.
Given the precise nature of production requirements, product safety issues and the nature of the final product, there is wide gap in the ability to scale in a way that is cost effective yet retains key safeguards while ensuring quality. However, technologies do exist that can aid biotech companies in their industrialization efforts without sacrificing safety. As 2019 begins and the strong curve for growth continues, companies should take a hard look at newer technologies and platforms that can help them scale their operation while allowing control of critical products to remain in the hands of the life scientists that manage them.
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