The focus of the industry is living organisms, and the highly regulated standards make it a unique concern for business leaders. These characteristics make the industry a natural source of innovations, which has led to major breakthroughs that have boosted the yield of agricultural crops, developed biofuels, and even led to life-saving pharmaceutical products.
Biotech companies that are starting out have many options when it comes to revenue generation strategies, with the majority choosing either a technology partnership or an asset creation and out-licensing approach. Technology partnering can generate more revenue and reduce financial risk, whereas outlicensing and asset creation strategies are able to yield much more returns. A increasing number of biotechs at the research stage use an approach that blends the two approaches.
Those who opt for the approach of developing based on products can be successful commercially if they can get their pipeline up to the right stage and also attract a significant pharmaceutical partner or an investor with a large sum of money. This can be an expensive proposition. It is important to balance opportunistic approaches in leveraging outside assets and the right scientific decisions regarding domestic projects.
Alternatively, the “platform” model is an alternative way to earn revenue. It’s a less costly option than the product-oriented development, but it also involves substantial risk. In this model the biotech owns and develops its platform technology, before collaboration with big pharma firms to develop a portfolio of drug discovery projects that focus on specific disease areas (i.e., disease that is x within biology and y). Advinus Therapeutics, among others have embraced this method.