Biotechnology vs. Pharmaceuticals: What Are the Differences?

Biotech vs. Pharma: What's the Difference?

By Keith Speights – Updated Sep 29, 2025 at 2:59 PM EST | Fact-checked by Robin Hartill, CFP

Key Points

Biotech firms produce medicines from living organisms, while pharma companies use chemicals.
Biotech applications include mRNA vaccines and monoclonal antibodies, showcased by COVID-19 treatments.
Investors should evaluate long-term prospects and risks of biotech and pharma stocks before investing.
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Similar yet different. You can probably think of several things that meet this description. Butter and margarine. Jaguars and panthers. Jam and jelly. And, for those interested in the prescription drug industry, biotech and pharma.

Some use the terms biotech and pharma interchangeably. However, they’re not exactly the same. The difference between biotech and pharma is that biotech companies make medicines from living organisms called biologics, while pharma (pharmaceutical) companies develop drugs from chemicals.

Woman using gloves to hold up and inspect a red pill. — Image source: Getty Images.

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The company became practically a household name when its monoclonal antibody COVID-19 therapy REGEN-COV2 was used to treat President Donald Trump in 2020 during his first presidential term. Monoclonal antibodies are clones of a single antibody that are made in labs. In the case of REGEN-COV2, the antibody cloned is one that fights the coronavirus that causes COVID-19.

Regeneron also has several other approved monoclonal antibody therapies. The company partners with Sanofi (SNY -2.92%) to market Dupixent for treating diseases including asthma and atopic dermatitis, Kevzara for treating rheumatoid arthritis, and Praluent for treating high cholesterol and reducing the risk of cardiovascular disease. Regeneron purchased Sanofi’s stake in another monoclonal antibody therapy that the companies co-marketed, cancer immunotherapy Libtayo.

Other monoclonal antibodies in Regeneron’s product lineup include cholesterol drug Evkeeza and Zaire ebolavirus treatment Inmazeb. The company also co-markets the eye disease drug Eylea with Bayer (BAYR.Y +2.21%). Eylea isn’t a monoclonal antibody, but it is a biologic.

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The makers of the medicines that keep us happy and healthy can be great places to invest.

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The future of biotech and pharmaceuticals

Several trends will likely shape the future of biotech and pharmaceuticals, including:

Personalized medicine. Biotech and pharmaceutical companies will increasingly focus in the future on developing therapies that are tailored for individuals based on their genetics and lifestyles.
Gene editing and gene therapy. Approaches such as CRISPR ( clustered regularly interspaced short palindromic repeats) gene editing offer the promise to modify DNA to cure genetic diseases.
Artificial intelligence (AI). Some biotech and pharmaceutical companies are already using AI to discover new drugs. In the future, AI will likely be used much more heavily in predicting how potential medications will interact with the human body.
Quantum computing. In conjunction with AI, quantum computing could transform drug discovery with its ability to simulate complex biological interactions.

FAQ

About the Author

Keith Speights is a contributing Motley Fool healthcare analyst covering publicly traded companies across pharmaceuticals, biotechnology, medical devices, technology, and marijuana. Prior to The Motley Fool, Keith was CEO of Constant Care Technology, a healthcare technology company; vice president of American HealthTech, a healthcare software company; and a director of operations for Blue Cross Blue Shield of Mississippi, a health insurer. He holds a B.S. in Industrial Engineering from Mississippi State University.

TMFFishBiz

Keith Speights has positions in Bristol Myers Squibb, Pfizer, and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Bristol Myers Squibb, Pfizer, Regeneron Pharmaceuticals, and Vertex Pharmaceuticals. The Motley Fool recommends Johnson & Johnson, Moderna, and SPDR Series Trust - SPDR S&P Biotech ETF. The Motley Fool has a disclosure policy.

Blurring the lines

Technically, Johnson & Johnson and Pfizer could also be viewed as biotech companies. Both big drugmakers develop biologics made from living organisms.

For example, J&J’s Stelara is a monoclonal antibody. So is Darzalex. Some of Pfizer’s top products are biologics, including Comirnaty and Prevnar.

There has been an increasing blurring of the lines between biotech and pharma. Many traditional big pharma companies now develop biologics. Some drugmakers refer to themselves as “biopharmaceutical companies” to reflect their focus on both biologics and traditional pharmaceuticals.

To confuse matters even more, some companies that develop drugs that aren’t made from living organisms are commonly referred to as biotechs. As a case in point, the SPDR S&P Biotech ETF (XBI -0.46%), as its name suggests, owns biotech stocks. Vertex Pharmaceuticals (VRTX -0.70%) is one of the exchange-traded fund's holdings. But Vertex’s best-selling cystic fibrosis (CF) drug, Trikafta, isn’t a biologic, and neither are the company’s other CF drugs.

It has become widely accepted to categorize all small drugmakers as belonging to the biotech industry, even when they don’t meet the definition of a biotech. Madrigal Pharmaceuticals (MDGL -0.69%), which has a relatively small market cap and has "pharmaceuticals" in its name, is a top holding of the S&P Biotech ETF. However, Madrigal's only approved product, metabolic-associated steatohepatitis drug Rezdiffra, isn't a biologic.

Considerations for investors

Big pharma stocks, such as Johnson & Johnson and Pfizer, typically will be less volatile than smaller biotech stocks, primarily because of the larger companies’ size and financial strength.

However, large biotech companies will often be less risky than a smaller pharmaceutical company that develops traditional medicines that aren’t made from living organisms.

With the opportunities for mRNA, monoclonal antibodies, gene editing, and other technologies, it’s likely there will be more biopharma companies in the future than pure biotechs or pharmas.

Investors are better off focusing on the long-term prospects for the individual companies, regardless of whether their therapies are biologics or traditional drugs.

Evaluate the management teams, markets for targeted diseases, clinical results of pipeline candidates, and the financial positions of the companies.

In the end, what really matters is what your potential return could be relative to the risk that you take on.

Biotech vs. Pharma: What's the Difference?

Key Points

Investing in Pharmaceutical Stocks

Investing in Marijuana Stocks

Investing in the Best Healthcare Stocks

Investing in Health Insurance Stocks

The future of biotech and pharmaceuticals

FAQ

Are biotech and pharma the same?

Is Pfizer a biotech or pharma company?

Which is better, biotech or pharma?

What does a biotech firm do?

Are vaccines pharma or biotech?

What is the highest-paying job in biotech?

About the Author

Stocks Mentioned

Bristol Myers Squibb

SPDR Series Trust - SPDR S&P Biotech ETF

Pfizer

Vertex Pharmaceuticals

Bayer Aktiengesellschaft

Madrigal Pharmaceuticals

Sanofi

Johnson & Johnson

Regeneron Pharmaceuticals

Moderna

Our Guides

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Examples of pharma companies

Related investing topics

Examples of biotech companies

Blurring the lines

Considerations for investors