Biotechnology companies develop drugs derived from biological sources — including monoclonal antibodies, gene therapies, mRNA vaccines, and CRISPR-based treatments. Unlike traditional pharma, many biotech companies are pre-revenue clinical-stage firms whose entire value is based on pipeline probability. This creates extreme binary risk around clinical trial readouts, FDA decisions, and partnership announcements. Large-cap biotechs like Amgen and Gilead offer more stability with marketed products.
Clinical trial calendars and FDA PDUFA dates are the most important catalysts. Watch cash runway for pre-revenue companies — burn rate determines dilution risk. Partnership deals with large pharma validate pipeline assets and provide non-dilutive capital.