Breaking the Mold: How Small Biopharma Companies Are Redefining Drug Launches

Perhaps the most exhilarating event in a biopharmaceutical company's history is the launch of a new drug. After years of researching, developing, and substantively testing a product, you've finally reached the long-awaited goal. And when you're a leader at a small biotech firm, you most likely stand at a crossroad: should you launch your product on your own or seek a partnership?

In the past two decades, most small companies have sought licensing, partnerships, or being taken over by larger pharma players. However, in the last decade, the trend has reversed. Small biopharma companies increasingly prefer launching their products themselves. The trend has escalated, and over a quarter of all new molecular entities submitted to the FDA since 2016 have been from first-time launchers.

But why now? What's behind the sudden motivation of small biotech companies to manage their launches ?

Converging Factors Driving Self-Launches

There are three major trends propelling these self-managed launches:

The Business Cycle:

Small drug companies have now faced easier money raising over the years because of significant economic growth as well as increased venture capital funding. Although 2020 has caused some irritation, deals in healthcare were robust, especially for late rounds, which already reached $4 billion in 2018. In this case, having access to funds enabled smaller companies to pursue launches independently.

Access to Talent:

Multiple acquisitions of large pharma have resulted in many skilled commercial leaders leaving the big companies and operating within small ones. As senior persons, they bring broad experience to these smaller companies, which makes them rather comfortable launching a new product.

Vendor Support:

Thanks to these extensively specialized vendors for manufacturing, patient services, and pharmacovigilance, among such basic functions, smaller Pharma companies can acquire significantly higher commercial value by not having to build enormous organizational infrastructures. The critical insight added is experience in specialty or rare disease markets where scaling is minimized since knowledge is valued more than scale.

Success Is Not a Given:

Takeaway from the Numbers Interestingly, whereas the first-time launcher launches out first at an increasing rate, most fail to exploit their full potential. Only 39% of the pre-launch stage of a first-time launch exceeded expectations against 50% of experienced companies. The following two to three years could, however, change this trend since a raft of innovative small companies is entering the market.

Of the 39 blockbuster drug launches forecast through 2021-2025, 22 are expected to come from first-time launchers, a healthy 56 percent share. That's a big upswing from past years and may represent the next major shift in the pharmaceutical landscape.

Keys to Launch Success

So how do small companies tip the odds in their favor? Here are a few best practices to consider:

Invest Early in Market Understanding:

Having a thorough understanding of the disease area and having your drug positioned appropriately is paramount. Success often depends on a good deal of information that helps get proper estimates about how providers, patients, and payers ultimately will behave when a new product is introduced. One company determined its few high-prevalence payers through analysis of claim data and targeted the key healthcare professionals who prescribe a large number of prescriptions to those payers.

Be Willing to Invest:

There's a fear that a development budget too tight may cause small companies to be averse to spending during launch, whereas sufficient resources allocated right at the beginning correlate with higher success percentages. According to McKinsey's research, companies who spent at or above their median in the launch year have twice as big of a chance of beating analyst expectations.

Be Agile and Monitor Progress:

Launches are complicated, and even the best roadmaps land with unforeseen delays. A "control tower" can be established to really get a real-time view of performance quickly allow for identification and resolution of issues. One biotech company successfully did this by holding daily huddles to track progress and quickly address areas of weakness.

The Way Forward:

Designing Your Launch Strategy Launching your own drug is no small decision, but it can be very rewarding. Tailor your go-to-market approach to the unique strengths of your product-not its company size. Whether that means raising additional funds, building a strong sales force, or leveraging strategic partnerships, all the difference can come from using the right approach.

Indeed, a launch marks the last ladder rung in documenting company capabilities of a biopharma company. The right approach, strategy, and mindset will make the first-time launchers play their part in the pharmaceutical landscape.

Ready to take the leap?