Everything You Need to Know About Biotech Business Models

What’s my business model? Who do I partner with? How do I scale up? These are typical strategic questions a young biotech will regularly face.

The business model of a biotech company can determine its long-term trajectory to success. In this article, we’ll focus on a typical ‘platform’ biotech company in the biopharma sector whose intellectual property can be applied to a wide range of R&D programs.

These principles apply to a range of technologies including protein therapeutics, targeted drug delivery, computational drug discovery, gene therapy, RNA therapeutics, and stem cells, as well as platforms that unlock new insights into disease pathophysiology or novel drug targets.

Pure Play Models

Broadly speaking, a founder could adopt any one of these three pure play business models:

  1. Technology partnering: licensing your platform and providing related services to a biopharma company, which in turn uses your help to create, develop, and commercialize pharmaceutical products.
  2. Asset creation and out-licensing: using your platform to create a pipeline of proprietary assets, be it candidate drugs in the case of therapeutics or prototype formulations in the case of drug delivery. Once there is scientific proof-of-concept for an asset, it can be licensed to a biopharma company, which in turn develops it into a product for regulatory approval and subsequent marketing.
  3. Product development and commercialization: creating your own pharmaceutical assets and taking care of the whole development process until commercialization.

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