The focus of the industry is living organisms. The highly regulated standards make it a unique concern for business executives. These characteristics also make the industry an ideal incubator for innovations, which has led to significant breakthroughs that have increased yields in agriculture, produced biofuels and helped to create life-saving pharmaceutical products.
Start-up biotech companies have many options 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 can generate more revenue, but with less risk of financial loss while out-licensing and asset creation strategy yields more lucrative returns if it is successful. A growing number of biotechs at the early stages of research employ a hybrid approach that combines both strategies.
The people who select a product-focused strategy can achieve commercial success as long as they are able to bring their pipelines up to the right stage and attract a large pharmaceutical partner or investor with deep pockets. This could be a costly option. It is crucial to balance opportunistic approaches in leveraging assets from outside and make proper scientific decision-making regarding the development of home-grown products.
Alternately, the “platform” model is an alternative way to earn revenue. It’s a less costly route than the product-oriented development however, it comes with substantial risks. In this model biotechs own and develops its platform technology prior to collaboration with big pharma firms to generate a portfolio of drug discovery projects that specifically target diseases (i.e., disease the x gene within biology y). This is the strategy Advinus Therapeutics and a few others have adopted.