Five biotech advancements to watch in 2022
Before the global Covid-19 pandemic charted a new path for biotech companies, the sector was already developing solutions that address various challenges currently facing humanity.
In recent years, global biotech firms have helped to prevent and cure disease, treat polluting waste, produce food and renewable energy safely and more efficiently, and reduce our ecological footprint to address the environmental and agricultural damage caused by climate change.
Spearheading the Covid response
The biotech sector has since spearheaded the global response to the coronavirus pandemic, which has accelerated both the development and adoption of various medical, health, and bioinformatic biotechnologies.
For example, biotech firms have helped to decipher the Covid-19 genome and understand how our immune defence mechanisms work against infection. They have used this information to develop various diagnostic tests, therapeutics, and vaccines.
As examples, US-based wastewater epidemiology biotech startup Biobot Analytics uses genomic and chemical tests and data analytics to detect the virus in a community’s sewage system to track its spread. Biotech diagnostics company Sherlock Biosciences developed the first FDA-authorised CRISPR-based SARS-CoV-2 test kit, which can return results in about an hour.
At its core, biotech is a field of technology that implements biomolecular and cellular processes to create healthcare, food, agricultural, industrial, and fuel products.
Based on its relevance in our modern lives, the sector will continue to advance and play an increasingly prominent role in society as more applications emerge.
According to a report by Vision Research Reports, the global biotech market will grow at a CAGR of 16.83% to surpass the USD 1 trillion mark in 2022 – the global biotechnology market was valued at USD 752.88 billion in 2020 – and reach USD 3.44 trillion in size by 2030.
Ongoing biotech innovation will drive this growth and transform our future as we tackle global problems, including new diseases through personalised medicine; environmental pollution, food scarcity, and management through agri-biotech and synthetic biology; and untold emerging applications in the flourishing global bio-industrial sector.
Creating investment opportunities
These developments will create investment opportunities for private and institutional investors. According to a McKinsey & Company report, the average share price for European and US biotechs increased at more than twice the rate of the S&P 500 between January 2020 and January 2021, while Chinese biotechs performed more than six times better, with their average share price more than doubling in a year.
The biotech sector also saw double-digit annual growth in fundraising from VCs and deals such as partnerships, co-developments, and joint ventures between 2019 and 2020.
SA's growing biotech sector
From a local perspective, South Africa's growing biotech sector can contribute to global innovation with the right investment and focus while also benefiting the local economy.
“Biotech has been a nascent sector in the country for some time but pockets of innovation have emerged in recent years,” explains Dheepak Maharajh, Cluster Head at BioCiTi, a Cape Town-based biotech innovation incubator and accelerator.
BioCiTi sees enormous potential in biotech as a technology that can benefit the environment and make a positive impact on people’s lives. As such, the organisation aims to support entrepreneurs and catalyse scientific innovations from ideation to commercialisation.
“The pandemic helped to accelerate progress in the local sector with vaccine development and increased vaccine production capacity in the country,” continues Maharajh.
More broadly, biotech innovation in South Africa is focused on moving away from harmful technologies.
“Biofuel development is a strong theme emerging in South Africa as the country seeks ways to shift from its reliance on fossil fuels,” elaborates Maharajh.
“At Investec we see it as a business imperative to keep track of emerging innovation,” says Camilla Swart, Fintech Partnerships and Innovation at Investec (SA). “It’s exciting to see the South African biotech ecosystem growing. We understand that accelerators like BioCiti play an important role in nurturing biotech start-ups, helping them to become investor-ready and to access the right networks”
“More and more,” she adds, “we are seeing the confluence of businesses that are set to offer both profit and purpose, and benefit the planet and communities. Many financial services and high net worth individuals are seeing the potential of impact investing as a means to both give back and see returns.”
With the country's strong scientific base, Maharajh believes the biotech sector offers numerous opportunities to attract foreign direct investment, which will create jobs and support economic growth.
“We can leverage our expertise and existing infrastructure to drive the government's ambitions to create a thriving biotech economy,” he explains.
“More investment and focus on South Africa's biotech sector will also create sustainable solutions that deliver climate change benefits and improve food security by helping to reduce our environmental impact and loss of arable land.”
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