Biotechnological Business Models

The industry’s focus on human living organisms and highly controlled standards provide unique considerations for business leaders. These aspects make the sector an ideal environment for innovation. They have produced major breakthroughs in biofuels, agricultural yields and life-saving pharmaceuticals.

Biotech companies that are starting out have many choices when it comes to revenue generation strategies, with most opting for either a technology partnering or an approach to asset creation and out-licensing. Technology partnering provides faster revenue and lower risk of financial loss while an asset creation and out-licensing strategy yields greater returns if it’s successful. An increasing number of biotechs at the research stage use a hybrid model which combines both strategies.

People who opt this post for a product-centric strategy are more likely to achieve commercial success in the event that they manage to bring their pipelines to the right level, and attract a big pharmaceutical partner or investor with a deep pocket. This can be an expensive option. It is crucial to consider the balance between opportunistic strategies in taking advantage of outside resources and the proper scientific decision-making regarding homegrown projects.

The “platform” model is another option to generate revenue. It is less expensive than product-oriented development but also comes with a high risk. In this model biotechs own and develops its platform technology before working with large pharma companies to create a portfolio of drug discovery projects that focus on specific disease areas (i.e. disease x within biology y). This is the model Advinus Therapeutics and a few others have adopted.