Biotechnological Business Models

The focus of the industry is living organisms, and the strict regulated standards make it a distinct consideration for business executives. These attributes also make the industry a natural source of technological innovation, resulting in significant breakthroughs that have increased the quality of agriculture, led to the creation of biofuels, and even led to life-saving pharmaceutical products.

Biotech startups have a myriad of choices when it comes to revenue generation strategies, with the majority choosing either a technology partnering or an asset creation and out-licensing strategy. Technology partnering provides faster revenues with less risk of financial loss while an asset creation and out-licensing strategy generates significantly higher returns when it’s successful. A increasing number of biotechs at the research stage employ a hybrid approach that combines both strategies.

The people who choose an approach to development that is oriented towards product can be successful commercially in the event that they can bring their pipeline to the appropriate stage and also attract a significant pharmaceutical partner or an investor with a large sum of money. It can be expensive but managing opportunistic approaches to leverage outside resources with the right scientific decisions about homegrown projects is vital.

The “platform” model is an alternative option to generate revenue. It is less costly than development based on product, but involves significant risk. In this model biotechs own and develops its platform technology, before collaboration with big pharma firms to generate a portfolio of drug discovery projects that target specific disease areas (i.e., disease that is x within biology and y). Advinus Therapeutics, among others have embraced this model.

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