Unlike most businesses, biotech investor relations require careful nurturing and a special focus on potential returns. Unfortunately, biotech companies generate some unique challenges for investors, such as prolonged development and testing times, uncertainties about FDA approval and possible patent challenges.
The Risk Factor of Investing in Biotech
Unfortunately, there is extreme risk in biotech investments, but the potential payoff can be tremendously lucrative. The right biotech investment can set up an investor for life, but the investment risks include a host of potential problems and delays. Many investors don’t have a solid grounding in the scientific underpinnings of new medical technology, and researchers need to tone down their excitement over technological breakthroughs and explain how these advances could generate solid financial returns for investors.
The risks of investing in biotechnology include:
• Balancing huge risks against the prospect of massive rewards
• High investment costs for any biotech product
• Lengthy development period when no returns are available
• Risk of backlash from different segments of society
• Affordability issues for certain drugs and procedures
• Possible side effects and interactions
• Risk of environmental damage
• Bioterrorism risks