eli5: What’s the difference between biotech companies vs traditional pharmaceutical companies?

Question

And why is it that from an investment standpoint biotech companies are a much riskier choice?

In: 6

Answer 1

Biotechs are generally smaller, focused on one or a narrow number of products, or are working to develop new products and/or technologies that aren’t (and may never be) proven winners yet.

Successful ones actually are usually acquired by one of the bigger players (either pharma or erratic billionaires.) In fact for many, that’s the goal.