In simple terms, biologicals are drugs that are made by biology rather than chemistry. Rather than getting chemicals and mixing them together to create what you want, you get some organism (a single-celled bacteria, yeast or something similar) and genetically programme it to make the thing you want.
There may be some more nuances to it (penicillin started out as coming from a biological thing, but now is mostly made via chemistry, and then you get things that are a mixture), but that’s the general idea.
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