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Biotechnology holds the capability to beat inflation and renders hope for the investors

Biotechnology holds the capability to beat inflation and renders hope for the investors

Businesses are generating lower revenues due to the pervasively arising global pandemic. The inflation attacks businesses by eroding purchasing power and raising interest rates. Businesses like wholesale trade, construction, accommodation, and food, etc are critically impacted by rising inflation.

Although biotech is one big industry that can flourish even in the inflation, rendering investors a shielded place against inflation.

Nick Shipley, Executive VP at Biotechnology Innovation organization says. “The biotechnology sector is looking like a domain that has potential for explosive growth.”

In this article, we will discuss how investment in biotechnology is a judicious decision. In fact, there are efficacious strategies that need to be executed in the inflation in order to get harness profitable results.

The 2 main factors which can lead to high growth in biotechnology are unique innovations in the biotechnology and beginning of the million-dollar funding and acquisition. Let us delve deep to understand both factors.

  1. Unique innovations in biotech expected to thrive in the market

As we know that biotechnology has made obscure yet important realms into focus. Some of the innovations in the domain are:

  • Precision medicines: The precision medicine market size is estimated to surpass USD 254 billion by the year 2032, and it is expected to reach a CAGR of 12.4% from 2023 to 2032.

Precision medicine is the megatrends in biotechnology on the back of the recently developed CRISPR gene editing technology. The precision medicine is being used for treating certain types of cancers to know which treatments and tests are best.

  • Tissue engineering and regenerative medicines

The tissue engineering is an emerging branch of biotechnology. The development of advanced techniques such as micro fluids and bioprinting.

  • Bioreactors

Bio reactors engineering is often implemented in a bioreactor designed to take through bio functional and geometrical properties. These are helpful in making complex tissue structures and have become increasingly popular to utilize 3D or 2D printing to develop the structures.

These innovations are hope for investment in the sector, as they can flourish the market growth. Various entrepreneurs in the biotechnology domain are saying that approximately 30% of the sales come from new and innovative solutions.

Other than this, keeping inflation in mind, various companies are also trying to keep the danger at bay by acquiring and merging with other companies. Some of the prominent mergers are written as follows:

  1. ArcherDX has been acquired by Integrated DNA technologies
  2. Nextmune acquired Avacta Animal Health
  3. Pfizer acquired Arena Pharmaceuticals
  4. EKF Diagnostics acquired Argutus Medical
  5. Derma Sciences acquired BioD
  6. Lab Corp acquired Orchid Cellmark
  7. Merck acquired cCAM Biotherapeutics

Apart from this, it has been estimated that approximately 46 biotech companies have raised at least USD 100 million in funding.

2 companies named Ultima Genomics and Eikon Therapeutics raised USD 518.1 million and USD 600.1 million.

Mental health is also a domain offering numerous of opportunities for growth. There is a growing aging population which is anticipated to fuel the growth of the market. The data from CDC shows approximately 1 in 5 Americans are expected to experience a mental illness in a given year.

The biotechnology companies are commencing to focus their efforts on the myriad of research which may help in developing new and efficacious therapies for disorders such as depression, anxiety, psychosis, and schizophrenia.

For instance, a company name Atai Life Sciences working from the year 2018. The company is specialized in biotechnology research and tirelessly works on fabricating remarkable treatments. Hence, biotech stocks are a good hedge against inflation. Furthermore, there are various other ways to manage inflation which are enumerated as follows:

  • Various biotechnology companies are reworking on the pricing

Instead of boosting the prices of the product, the executives have to work potently on price marking. Furthermore, in the time of inflation the wise business decision is to eradicate the costs wherever one can withstand them without lowering the quality of the work.

  • Introducing Automation

Introducing automation is considered as one-time investment in the companies. Automated processing and monitoring can remarkably help biotechnology, by allowing research laboratories to boost up productivity.

  • Having various revenue streams

Due to having multiple sources of revenue is beneficial to survive through the inflation period. In case one channel or aspect of the business fails the market leaders can rely on another source of income.

  • Get spending visibility

High resolution spending enables market executives to fully understand where to spend the money. It enables the to fully understand where to spend the money. It enables the right level of accountability throughout the organization.

  • Judiciously choose non-strategic and strategic spending

In any case of spending, it is important to explicitly distinguish between non-strategic and strategic cost-cutting. This is done to get sustainable cost management in the company.

  • Impeccable Financial Management

It is the practice of making business plans and then ensuring the departments stay on track. Various software such as ERP is able to help finance teams accomplish their goals. Below written some of the benefits of financial management:

  • Maximizing profits
  • Tracking cash flow and liquidity
  • Developing financial scenarios
  • Ensuring compliance

Hence, it can be said that despite the inflation demand for the healthcare is very likely to drop off. The biotechnology is one of the segments flourishing thoroughly. In fact, bio techs could actually get benefits from the inflation.

Consumers are also excited to harness the benefits of the innovations in the domain of the biotechnology. Researchers are expecting that despite facing the ebb and flow of the economy, they are confident that this industry will continue to grow owing to the rising demand.


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swara-keni
Swara Keni

Head- Global Business Development

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