Biotechnological Business Models

The focus of the industry on living beings that are human and the strict regulations that it imposes make it a unique challenge for business leaders. These attributes make the industry a natural incubator for technological innovation, resulting in significant breakthroughs that have increased yields in agriculture, produced biofuels, and resulted in life-saving pharmaceutical products.

When you think of strategies to generate revenue biotech startups have a variety of options. The majority choose either a technology partnership or an asset creation and out-licensing strategy. Technology-based partnerships can produce higher revenue and lower financial risk, while assets creation and outlicensing strategies can yield greater returns. A growing number of biotechs that are in research phase operate an hybrid model that blends both approaches.

If you choose to go with an approach that is focused on product development can achieve commercial success in the event that they can bring their pipeline to the appropriate stage and also attract a significant pharmaceutical partner or investor with deep pockets. It can be expensive, however, and the balance of opportunistic strategies to leverage outside resources while making the right research-based decision making about homegrown projects is key.

The “platform” model is a second option to generate revenue. It is a less expensive route than the product-oriented development, but it also involves substantial risk. In this model, biotechs own and develop their own platform technology, before teaming with pharma giants to develop a collection of drug-discovery projects that target specific diseases (i.e. disease that is x in biology, y). Advinus Therapeutics, among others, have adopted this approach.

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