Biotechnological Business Models

The industry’s focus on living beings that are human and the strict regulations that it imposes make it a unique challenge for business leaders. These characteristics make the industry a natural source of creativity, leading to major breakthroughs which have improved the quality of agriculture, led to the creation of biofuels, and even led to life-saving pharmaceutical products.

When it comes to revenue-generating strategies biotech start-ups have a myriad of options. The majority choose either a technology partnership or an asset-creation-and-out-licensing strategy. Technology partnering can bring higher revenue and lower risk to the financials, whereas asset creation and outlicensing strategies can generate significantly more returns. A growing number of biotechs at the research stage use a hybrid approach that combines the two approaches.

People who choose a product-oriented development strategy can achieve commercial success when they are able to get their pipeline to the right stage and attract a large pharma partner or an investor with a large sum of money. It can be costly but the balance of opportunistic strategies to leverage external resources with research-based decisions regarding homegrown projects is vital.

In addition, the “platform” model is an alternative method of earning revenue. It is a less expensive alternative to the product-oriented approach however, it comes with significant risks. In this model biotechs own and develops its platform technology, before collaboration with big pharma firms to create a portfolio drug discovery projects that specifically target diseases (i.e. disease the x gene within biology y). This is the model Advinus Therapeutics and a few others have taken.

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