The industry’s focus on living organisms of the human species and highly controlled standards are unique to business leaders. These features make the industry a natural source of technological innovation, resulting in major breakthroughs which have improved the yield of agricultural crops, developed biofuels, and resulted in life-saving pharmaceutical products.
Biotech startups have a variety of options when it comes to revenue generation strategies, with most choosing either a technology partnering or an asset creation and out-licensing approach. Technology partnering generates faster revenues with less risk of financial loss, while out-licensing and asset creation strategy will yield higher returns when it’s successful. A growing number of biotechs in the research phase employ a hybrid strategy that combines the two approaches.
Those who choose a product-oriented strategy are more likely to achieve commercial success as long as they are able to get their pipelines to the right place, and then find a major pharmaceutical partner or investor with a deep pocket. It can be a costly investment. It is crucial to balance the opportunistic approach of using outside resources and making best scientific decisions for homegrown projects.
Alternately, the “platform” model offers an alternative route to earning revenue. It is less costly than product-oriented development, but involves significant risk. In this model biotechs have the ability to develop their own platform technology prior to teaming with pharma companies to create a range of drug-discovery projects that target specific diseases (i.e. disease that is x in biology, y). Advinus Therapeutics, among others have embraced this method.