Category: Biotech

The Evolving Landscape of Biotechnology in Agriculture

March 1, 2024 Corporate Responsibility

Jeff Bartel

Chairman and Managing Director

Agricultural biotechnology uses modern technology to develop new farming processes that increase crop strength, productivity, and sustainability. CRISPR technology plays a significant role in breeding crops with higher drought and disease resistance, reducing the effects of climate change. Additionally, artificial intelligence solutions boost resource utilization, lower environmental impact, and improve agricultural yields.

Key Trends Driving Investment in Biotechnology in Agriculture

Agricultural biotechnology is seeing sizable investment, particularly in genetic editing and precision agriculture fields, and is leading to changes in traditional farming practices that increase yields and produce heartier crops. Advances in genetic editing, like CRISPR-Cas9 technology, enable the development of disease resistance, drought tolerance, and improved nutritional features. Remarkable successes in genetic editing include the creation of non-browning mushrooms and disease-resistant types of wheat and rice. In addition, precision agriculture systems, including GPS-guided machinery and sensor-equipped drones, allow farmers to gain efficiency, maintain crop health, and set planting strategies.

Biopesticides and Sustainable Farming Practices

Biopesticides are developed from plants, fungi, and bacteria, and offer several benefits over chemical pesticides, including

  • lower toxicity,
  • reduced environmental impact,
  • low residue buildup, and
  • and specific pest targeting.

Focusing on safe and sustainable pest management helps with agricultural investor interest and market growth.

Data Analytics and AI in Farming

Targeted data analysis and AI algorithms help farmers improve their crop planning and pest control efforts, leading to more accurate harvest estimates. Farmers gain real-time insights into soil conditions, weather forecasts, crop development, and pest behavior using sensors and drones that deliver “big-data” analytics. Real-time data helps AI algorithms identify patterns and predict problems, enabling far more efficient operations, less environmental impact, and higher rates of production.

Investment Opportunities in Agricultural Biotechnology

Startups and other groups looking for innovative solutions can find investment opportunities. Examples include 

  • Indigo Agriculture, a company committed to working with plant microbiomes to enhance crops. In 2023, they successfully raised $360 million in Series F funding.
  • Benson Hill, a company known for its biology-driven work in crop genetics. In 2022, they successfully raised $150 million in Series D funding.

Public and Private Funding

Government programs like specific research grants and startup subsidies are notable in biotechnology research and development. At the same time, venture capital firms and private equity investors bring needed funding to the agricultural biotech industry that increases innovation and assists commercialization. Strategic relationships between agricultural corporations and agritech startups help exchange critical knowledge, provide market access, and allow for sharing necessary resources that speed up product development and market expansion.

Risks and Challenges for Investors in Agricultural Biotech

The regulatory processes governing agricultural biotechnology are complex and differ depending on the country, involving assorted approval procedures, labeling rules, and public attitudes. Ethical concerns involving genetic modification also complicate investment reviews, with attention given to concerns like environmental impacts, possible health hazards, and socio-economic effects.

Market Volatility and Technological Uncertainties

Features like regulatory changes, geopolitical developments, and shifts in consumer interest often influence market conditions. Investors face challenges using precise market analysis, diversifying their portfolios, adapting to developing market conditions, and altering technological progress.

Competition and Intellectual Property Issues

The agricultural biotechnology industry is very competitive, and companies need to work to be the first to develop and market updated technologies. There are challenges to protecting intellectual property rights, like patents, trademarks, and trade secrets. Understanding these challenges and enforcing them is complicated, and staying ahead of the competition requires

  • developing continuous investment in research and development,
  • creating strategic partnerships and acquisitions, 
  • anticipating evolving regulatory requirements, 
  • and, adapting to changing consumer preferences.

The Future Outlook: Predictions and Potential Impacts

To be successful in agricultural biotechnology requires companies to constantly research and develop technological breakthroughs to meet changing market needs. Important expanding areas include agricultural technology improvement and the development of data analytics, artificial intelligence, and internet-connected devices that boost productivity. Genetic editing tools are also valuable in engineering better crops with adaptability against climate change and various pests and diseases. The consumer’s need for safer and healthier agricultural processes has led to changes from traditional chemical solutions to an increased use of biopesticides and biostimulants.

Food Security, Sustainability, and Global Agricultural Impact

Advancements in biotechnology can enhance yields, build crop strength, and improve nutritional quality. By developing sustainable farming systems and lowering the need for harsh chemicals using biopesticides and biostimulants, biotechnology helps establish more environmentally friendly agricultural practices. Because of this, biotechnological progressions play a dominant role in lowering food security concerns and reducing environmental effects associated with agriculture, like soil breakdown, water contamination, and greenhouse gas emissions.

Strategic Considerations for Biotechnology in Agriculture Investments

Before making any agricultural biotechnology investment decisions, investors need to consider the following

  • scientific skills,
  • market demand,
  • and, regulatory systems.

Diversifying into various agricultural biotech areas, like crop genetics, precision agriculture, and biopesticides, helps investors stay current on developing trends, updated regulations, and technological developments. While agricultural biotech investments offer the possibility of returns, investors must prepare for challenges like intellectual property differences and pressure from competitors.

How Biotechnology Will Shape Future Agriculture

Agricultural biotech is essential as the world deals with problems like population growth, climate change, and migration. Modern biotechnology is vital to providing creative solutions to global issues. The agricultural sector will help farmers grow stronger crops, improve the nutritional content of food, and increase environmental sustainability using the latest advanced technologies like genetic editing, precision agriculture, and biopesticides.

The Biotech Venture Capital Market in 2023

October 28, 2022 Investment

Jeff Bartel

Chairman and Managing Director

Venture capital investments in the biotech industry have steadily increased since 2015, with a significant spike in Q1 2021. Although these investments dropped slightly in the following quarters, investors should not be too concerned. We will discuss the causes behind this drop in VC investments and explain why biotech is still a valuable investment.

Biotech Venture Capital Trends

Over the last three years, we have seen a significant spike in venture capital investments in the biotech industry. In 2019, VC biotech investments stood at $1.5B in Q1 and continued to rise, peaking at $9.1B in Q1 2021. However, since then, there has been a slight decrease in VC funding going to the biotech sector.

Despite the recent decrease in VC funding, billions of VC dollars still impact the biotech industry. Investors seem particularly interested in the therapeutic-based biotech sector. This biotech research and development area is so popular that VC companies worldwide invested more than $52B into this field from 2019 to 2021.

Some of the most popular therapeutic-based biotech research areas for investors include:

  • Cell Therapy: $7.7B investment from 2019-2021
  • Next Generation Gene Therapy: $7.6B investment from 2019-2021
  • Precision Medicine: $4.5B investment from 2019-2021
  • Machine-Learning Drug Discovery: $4.4B investment from 2019-2021
  • New Drug Delivery Methods: $4.0B investment from 2019-2021

VC investors in biotech also trend more toward startup biotech companies. In fact, from 2019-2021, nearly two-thirds of all VC funding in biotech went to startup companies.

The Drop in Biotech Venture Capital and the Rebound Potential

While VC investments in biotech have dropped since its big spike in Q1 2021 ($9.1B), Q1 2022 ($7.6B) investment levels are still 58% higher than investments in Q4 2020 ($4.8B). This drop in VC funding is partly due to uncontrollable global events, including inflation concerns and unstable markets.

One thing is sure; VC investors are becoming more selective regarding their investment choices. While investments in biotech can provide rapid growth once the product makes it to market, investors may be looking for more movement in the development phase.

There are currently over a thousand biotech trials underway, but out of the 50 drugs approved by the FDA in 2021, only 2 of these drugs were in the biotech field. While this may seem like a small number, it is a significant advancement for the biotech industry and could signify what is to come.

Test tubes representing an biotech venture capital investment

Investment in Cell and Gene Therapies

Biotech is a booming industry with plenty of room for growth. More than 3,000 biotech firms were formed in 2021 alone. Studies show that the industry is set to grow by 30% by 2025. In addition, 21 cell therapy and 31 gene therapy launches are on track for 2024.

There has been a shift in the type of biotech investments that interest VC investors. In early 2020, many VC investors still leaned towards traditional biotech areas, such as microbial. In 2021, however, there was a significant shift in VC investors to next-generation cell and gene therapy investment opportunities. Considering recent advancements in this field and a few successful launches, venture capitalists will likely continue to invest in this emerging technology.

Funding for Machine Learning in Drug Research

Biotech advancements can be a costly endeavor. Estimates show that the research and development phase alone can cost up to $2.3B and close to another $1M to get the product to market. Fortunately, investments in machine learning and artificial intelligence by the biotech industry are helping to cut these costs, which results in higher rewards for venture capitalists choosing to invest in this biotech sector. Studies show that machine learning can help reduce preclinical costs by up to 40%.

Cost-savings are just some of the benefits machine learning offers. It also can help biotech companies speed up the research and development phase. This advanced technology can help take some guesswork out of the development phase by transforming big data into analytical results. Moreover, machine learning is so impactful that experts anticipate biotech companies investing in machine learning may bring as many as 50 novel therapies to market over ten years.

Biotech companies investing in machine learning technology are already grabbing the attention of VC investors. In combination with small molecule drug discovery, machine learning has overwhelmingly received most of the VC funding.

Despite the recent drop in VC funding, the value of the biotech sector is far from over. With machine learning and artificial intelligence helping to save costs, speed up the research and development phase and simplify the launch phase, a surge in biotech products coming to market is likely on the horizon. As a result, this could be the perfect time for VC investors to invest in biotech before the market is saturated.