How to Avoid Becoming a Biotech Zombie Part 1 - Applying Proven Industry Business Principles - BioPharm International


How to Avoid Becoming a Biotech Zombie Part 1
Applying Proven Industry Business Principles

BioPharm International
Volume 21, Issue 1


Figure 1
In our experience, steady growth is best achieved by sticking to your core capability. However, that does not always mean pursuing only one drug for one indication. In fact, such narrow focus can lead to disaster, as with the one-drug-wonders who fiercely chase a single—often spectacularly promising—product that doesn't pan out and destroys the company. Or, as with some of the zombies, the singular pursuit of a product turns out to be a dead end, but by managing to secure additional funding, the company embarks on a similar pursuit, initiating another cycle of development.

The key is not single-mindedness, but careful thought about precisely what your core capability is and what strategic possibilities it offers. The key milestones for a product's success involve clinical filing, data, and clinical efficacy for a chosen indication. A regulatory strategy that offers multiple indications and applications, or at least multiple classifications, for the purpose of reimbursement will offer more "shots on goal" and have a better chance of survival. One approval pathway does not make for a flexible regulatory strategy.

Alternatively, you may conclude that your most promising core capability is a technology platform, such as pegylation or chemical modification for altering an antibody to deliver it to skin, kidneys, or other locations. A platform technology might be a new cell line which could be used to express proteins in vast quantities and is free of prior intellectual property claims. For such a platform, you need only show that your technology is faster, better, and cheaper. Instead of being restricted to the "one-and-done" approach, you have more commercial options because your core technology may provide a platform for numerous products.

With a technology program, you might typically persuade a major pharmaceutical company to license the technology before Phase 1 trials. As you achieve subsequent development milestones, you receive additional payments. And when the pharmaceutical company goes to market with a product that uses your technology, you receive royalties. Further, you aren't restricted to doing business with only one company—you have the possibility of doing similar deals with other companies. This strategy will not produce a billion-dollar therapeutic drug, but it can provide a sustainable return on investment.

Over the past five or six years, investors have shied away from investing in platform technologies. Seeking the home run, they invested in late-stage drugs. As many of them began chasing the same drugs, they dramatically drove up the price. As a result, many investors are now reconsidering investing in platforms.

Whether you pursue products or a technology platform as your core capability, make it clear to investors. Educate them about realistic timelines for development, then stick to that capability and resist pressure to unnaturally speed up its development or abandon it prematurely. Forming a biotech company is difficult in itself, but securing time for it to grow may be even harder.


A realistic business plan lays out the infrastructure on which to build a company. A drug development and commercialization master plan maps out the course of action needed to create a product and move it through the regulatory process. They are inextricably linked. Identify critical milestones in both the business plan and commercialization plan and weave them together. Figure 1, for example, depicts a high-level view of the elements of each that must be integrated to take a product all the way from concept to commerce. The end-point of the plan will of course depend on your company's ultimate strategy—whether you intend to manufacture or market your product or aim only to become a supplier of molecules.

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