Ísteka’s growth story shows how a small country can turn geographic isolation and natural resources into a globally competitive biotechnology industry.
The Reykjavík-based company describes itself as a pharma-based biotechnology business that creates “well-being and value” through the use of Icelandic nature and ingenuity. Its core work is producing an active pharmaceutical ingredient, or API, used in veterinary medicine, with the company’s supply chain built around one of Iceland’s most distinctive biological assets: the Icelandic horse.
In an interview with GMI POST, Ísteka General Manager Arnþór Guðlaugsson said the company’s origins date back to the 1970s, when a Danish pharmaceutical company began sourcing raw biological material from Iceland. The business later evolved into Ísteka in 1990, although its early years involved significant operational development as the company worked to establish a scalable production and commercial foundation.
“When the company was starting out, it faced a number of production and commercial challenges, but those experiences pushed us to refine our manufacturing processes and build a much stronger foundation for long-term growth,” Guðlaugsson said.
The turning point came in the early 1990s, when the company redesigned its manufacturing process using biotechnological techniques and established stronger partnerships with pharmaceutical customers. Stability became a central part of the company’s strategy as it focused on producing consistent pharmaceutical-grade products and building long-term trust with clients.
Since then, Ísteka has grown into a stable supplier serving pharmaceutical markets across multiple continents.
Ísteka’s growth reflects a broader lesson in specialized biotechnology: long-term success is often built on reliability, quality control, and consistency rather than rapid expansion.
The company’s competitive advantage is also closely tied to Iceland itself. Icelandic horses have remained isolated for centuries because of strict rules preventing horse importation into the country. That isolation has helped create an exceptionally healthy horse population with very few transmittable diseases, giving Ísteka access to unusually clean biological material.
“The purity and isolation of the Icelandic horses is a major advantage for us,” Guðlaugsson said, noting that the country’s geographic isolation plays a critical role in maintaining the quality of the company’s raw materials.
Ísteka says its API, eCG, is produced from blood plasma sourced from pregnant mares and processed at its Reykjavík production facility under GMP standards, with testing conducted throughout multiple stages of production.
As with many biotechnology companies working with biological materials, the industry also faces increasing scrutiny around operational standards and animal welfare. Iceland Monitor previously reported that Ísteka’s operating license was renewed through 2038, while noting that the company has faced public criticism and regulatory attention surrounding the collection of blood from pregnant mares.
For Ísteka, this makes responsible growth essential. The company’s own materials emphasize permits, veterinary oversight, written animal welfare agreements, audits and operational monitoring as part of its production framework.
Another takeaway from GMI POST’s interview with Ísteka is that natural-resource-based biotechnology depends heavily on trust. Companies working with rare biological materials require more than scientific expertise. They also need transparent standards, strong oversight, and credible welfare practices to maintain public confidence and long-term market access.
Demand for Ísteka’s products now exceeds supply. According to Guðlaugsson, the company’s API is sold through select pharmaceutical partners and ultimately reaches markets globally, including Asia and North America. Ísteka sees significant room for future growth, with both market demand and factory capacity capable of supporting higher production volumes as raw material supply increases.
“We can sell much more product than we are currently able to produce,” Guðlaugsson said.
That challenge highlights another lesson for specialized biotech industries: scarcity can create value, but it can also limit scale. Ísteka’s next phase of growth will depend on whether it can responsibly expand supply without compromising the quality, welfare and regulatory standards that underpin its business.
For Iceland, Ísteka represents a broader economic development lesson. Smaller economies do not always need massive scale to compete internationally. They can build globally relevant industries by combining natural advantages, scientific expertise and disciplined production systems.
Ísteka’s next challenge is turning that niche strength into sustainable long-term growth.
