The industry’s focus on living organisms of the human species and highly regulated standards are unique to business leaders. These features make the industry an ideal incubator for innovation. They have produced major breakthroughs in biofuels, crop yields, and life-saving pharmaceuticals.
Biotech startups have a variety of choices when it comes to revenue generation strategies, with most opting for either a technology partnering or an out-licensing and asset creation strategy. Technology partnering provides faster revenue and lower risk of financial loss while an asset creation and out-licensing strategy will yield more lucrative returns if it is successful. A growing number of biotechs that are in research phase operate a hybrid model which combines both approaches.
People who opt for a product-centric strategy are more likely to achieve commercial success in the event that they manage to get their pipelines to the right place, and attract a big pharmaceutical partner or a financier with deep pockets. This could be costly however, and the balance of opportunistic strategies to leverage outside assets with the right research-based decisions regarding homegrown projects is crucial.
Alternatively, the “platform” model offers an alternative way to earn revenue. It’s a less costly alternative to the product-oriented approach but it comes with substantial risks. In this model the biotech owns and develops its platform technology, before partnering with big virtual deal software pharma companies to generate a portfolio of drug discovery projects that focus on specific disease areas (i.e., disease the x gene within biology y). Advinus Therapeutics, among others have adopted this strategy.