The focus of the industry on living organisms of the human species and highly regulated standards make it a unique challenge for business leaders. These characteristics make the industry a natural incubator for innovations, which has led to major breakthroughs that have improved the yield of agricultural crops, developed biofuels, and even led to life-saving pharmaceutical products.
Biotech startups have a myriad of options when it comes down to revenue generation strategies, with most choosing either a technology partnering or an out-licensing and asset creation strategy. Technology-based partnerships can produce higher revenue and lower financial risk, whereas asset creation and outlicensing strategies can yield higher returns. An increasing number of research-stage biotechs operate an hybrid model that blends both approaches.
The people who select a product-focused strategy are more likely to achieve commercial success in the event that they manage to get their pipelines to the right stage and then find a major pharmaceutical partner or investor with deep pockets. This is a costly option. It is important to balance the opportunistic approach of leveraging assets from outside and make appropriate scientific choices regarding home-grown projects.
The “platform” model is another alternative to generate revenue. It’s a cheaper method than the development-oriented model but it comes with substantial risk. In this model biotechs create and own their own platform technology, before teaming with big pharma to develop a collection of drug-discovery projects that target specific diseases (i.e. disease of x in biology). Advinus Therapeutics, among others, have adopted this approach.