The Pandemic Is a Reminder of the Power and Importance of Biotechnology

With the highly contagious Delta variant of COVID-19 causing surges like the one behind 10,000 new cases per day in Florida and the one forcing half of Australia’s population into lockdown, it’s clear the kinds of technological innovations that have helped protect more than a billion people from COVID-19 will continue to be needed.

Revolutionary vaccines, innovative surveillance technologies and rapid genome sequencing are examples of the kinds of breakthroughs made possible by biotechnology, a field that will continue to draw investment for its life-saving impacts.

The power of biotechnology has been made clear since the start of the pandemic, especially to anyone who has received a COVID-19 vaccination — and so far, about two-thirds of the U.S. population has. Those innovations have an impact on the companies that produce them, too, and investment in biotechnology companies continues to be strong.

In the past, investment in biotechnology companies may have been seen as too risky for retail investors, as finding a successful company relied on finding one whose complex technology might succeed. Now, a first-hand reminder to the world of the power biotechnological innovation can have, coupled with continued innovation in fields from genome sequencing to messenger RNA vaccinations, have the industry primed for new investment.

That new investment will take the form of both retail investors spurred by that powerful demonstration and sophisticated venture capital and private equity firms who have always sought to deeply analyze potential innovations. Together they all have the capability to launch new businesses and vault existing companies to new levels of success.

“New investors mean new sources of capital for biotechs, which has led to an upward trend in valuations,” Sunjay Malhotra and Julian Stanier wrote last fall in the journal Biotechnology Law Report. Just in the past year alone, shares of Moderna have more than quadrupled and Cassava Sciences, which is conducting clinical trials to treat Alzheimer’s Disease, has gone from a market cap of about $77 million to nearly $5 billion today.

And just as Moderna found success with its COVID-19 vaccine, successful biotech companies must be able to hang their hats on technology that has a reasonable timeline to becoming a reality. Synthetic messenger RNA technology had been in the pipeline for years, but 2020 brought it to the forefront and made it a reality. What field will next be sped up by a great need? One obvious candidate is adapting the same messenger RNA technology to improve seasonal flu vaccines, but what about other big challenges like cancer, heart disease, diabetes, HIV and other modern day treatable conditions that burden our healthcare system financially?

Investment into biotech is always a long-term proposition, but the coronavirus pandemic has been a reminder of the impact successful innovations can have. Biotech has the power to help countless people, and an increase in investment is necessary in order to accelerate scientific progress and drive a positive impact that will help many.

Artem A. Trotsyuk is a bioengineer and computer scientist by training. He is also a venture capitalist with the R42 Group, investing in early stage companies in AI, deep science and biotech.