The focus of the industry on living organisms of the human species and highly regulated standards provide unique considerations for business leaders. These features make the industry a natural source of innovations, which has index led to major breakthroughs which have improved yields in agriculture, produced biofuels, and resulted in life-saving pharmaceutical products.
Biotech startups have a myriad of options when it comes to revenue generation strategies, with most opting for either a technology partnering or an approach to asset creation and out-licensing. Technology partnering can result in faster revenue and lower risk to the financials, whereas outlicensing and asset creation strategies can yield greater returns. A growing number of biotechs at the research stage use an hybrid model that blends both strategies.
The people who choose an approach that is focused on product development can be successful commercially when they are able to get their pipeline to the appropriate stage and also attract a significant pharmaceutical partner or investor with a large sum of money. This is costly however, and managing opportunistic approaches to leverage outside assets with the right scientific decisions about homegrown projects is essential.
Alternately, the “platform” model offers an alternative way to earn revenue. It’s a lower-cost alternative to the product-oriented approach, but it also involves significant risk. In this model biotechs create and own their own platform technology prior to teaming with pharma giants to develop a collection of drug discovery projects aimed at specific diseases (i.e. disease that is x in biology, y). Advinus Therapeutics, among others have embraced this method.