Biotechnological Business Models

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The focus of the industry on living organisms of the human species and highly controlled standards make it a unique challenge for business leaders. These attributes make the industry an ideal place to foster innovation. They have resulted in major breakthroughs in the production of biofuels and agricultural yields and life-saving pharmaceuticals.

Biotech startups have a variety of options when it comes to revenue generation strategies, with most opting for either a technology partnering or an asset creation and out-licensing approach. Technology partnering provides faster revenues with less financial risk while out-licensing and asset creation strategy yields higher returns if successful. An increasing number of biotechs that are in research phase operate in a hybrid approach that combines both approaches.

If you choose to go with an approach that is focused on product development can achieve commercial success if they can get their pipeline up to the right stage and attract a large pharmaceutical partner or investor with deep pockets. This can be an expensive venture. It is important to consider the balance between opportunistic strategies in leveraging assets from outside and make best scientific decisions for homegrown projects.

Alternately, the «platform» model can provide an alternative way to earn revenue. It’s a less costly route than the product-oriented development, but it also involves substantial risks. In this model, a biotech owns and develops its platform technology, before joining with major pharma companies to create a portfolio of drug discovery projects that specifically target disease areas (i.e. disease that is x within biology and y). This is the strategy Advinus Therapeutics and a few others have taken.

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