Biotechnological Business Models

The industry’s focus is on living organisms, and the highly controlled standards make it a distinct consideration for business leaders. These features make the industry an ideal incubator for innovation. They have led to major breakthroughs in the production of biofuels and agricultural yields and life-saving pharmaceuticals.

When it comes to revenue-generating strategies biotech start-ups have numerous options. The majority choose either a technology partnership or an asset creation-and-out licensing strategy. Technology-based partnerships can produce higher revenue and lower risk to the financials, whereas strategies for asset creation and outlicensing are able to yield much higher returns. An increasing number of biotechs in the research stage operate a hybrid model that combines both approaches.

If you choose to go with the approach of developing based on products will succeed commercially when they are able to get their pipeline to the appropriate stage and also attract a significant pharmaceutical partner or an investor with deep pockets. This could be a costly option. It is important to balance opportunistic approaches in taking advantage of outside resources and the appropriate scientific choices regarding the development of home-grown products.

In addition, the “platform” model provides an alternative way to earn revenue. It is less costly than product-oriented research, but has a significant risk. In this model, a biotech is the owner and develops its platform technology prior to partnering with big pharma companies to develop a portfolio of drug discovery projects that focus on specific disease areas (i.e. disease the x gene within biology y). This is the method Advinus Therapeutics and a few others have taken.

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