Challenges for Early-Stage Biotechs

Challenges for Early-Stage Biotechs

Biotechnology has set the world alight, and there is a global spotlight on what a well-funded, well-staffed biotech company can accomplish when given the opportunity. However, biotechs in the early stages of operation face significant challenges which stand in the way of their viability and success. From developing an innovative idea backed by scientific integrity to securing funding, there is a wide range of obstacles new biotechs will face.??Not to mention, the average time it takes to get a new product from conception to market is 15 years, per?Velocity Global. To ensure success, biotech companies are encouraged to be wary of several factors.?

The Science

The science that goes into an early biotech is crucial in ensuring success, as it is essentially the backbone which will hold the product together. Firstly, the science must address an unmet need and hold enough innovation to warrant investment. Other common issues facing early biotechs range from unreproducible science which wards off potential investors due to a lack of veracity, to having trouble scaling up products from the lab to be made available to the masses.?

Strategic Management

For a biotech company to succeed in its early stages, it is not enough to move forward relying solely on an idea. Vision needs to be coupled with effective strategic management to ensure early-term survival as well as long term success.?The foundation of a strategic plan that enables biotech companies to be competitive includes: ensuring?free cash flow generation?by leveraging operations in business and Research and Development (R&D) ; having a viable?financing strategy?to fund operations and R&D projects; hiring and retaining?seasoned management?to ensure stability; constantly researching and developing?compelling science?product candidates; and securing?intellectual property, technologies, and business ideas to generate growth (Early-Stage Biotech Companies: Strategies for Survival and Growth - PMC).?

Early-Stage Investment

Early-stage biotechs require enough funding to not only begin operation, but to also continue. This requires funding with additional staying power. According to?Westwicke, partnering with initial investors is one way to ensure biotech funding, especially those who can attract larger investors in the future. Unfortunately, this approach is easier said than done, as the biotech market is saturated, making it difficult to attract investors. New companies will need to implement unique approaches and demonstrate innovation to attract attention of initial investors and subsequently, later-stage investors.?To attract quality investors, here are a few methods that can assist:

Bring in Established Voices

Investors are more likely to sign on with new companies that are associated with known industry leaders. Bringing known personalities and experts to the board can mean the difference between an intriguing mission with no path to success and directing a vision to successfully secure funding.

Be Relevant

As exciting as it may be, an obscure project is likely to scare investors away. Looking for novel ways to solve an existing and relevant problem is more likely to result in success and profits. While reinventing the wheel is not necessary, creating novel solutions to known problems is likely to pique the interest of early-stage investors.

Attracting and Maintaining Staff

Creating innovative, new technology and advancing life sciences requires highly educated and skilled staff. However, the best and brightest are not cheap and competition is fierce. Here are a few ways to attract top talent, according to life sciences recruiting agency?Pierpoint.

Efficiency

While it's important to vet each candidate and make sure that they are a good fit, a long and drawn-out hiring process can stand in the way of signing talent. Taking extended periods to decide, or requiring candidates to go through multiple rounds of interviews create opportunities for companies with more streamlined recruitment processes, to pull clients away.

Diversity

Candidates are more likely to be attracted to companies with a broad range of social and ethnic representation. Currently, there is a distinct lack of diversity at high levels within biotech’s, with most C-suite members being white men. Emphasis on a diverse workforce can set a new company apart as well as attract and retain top talent.

Culture

Companies that lack innovation, identity and culture will fail to attract talent. This is especially costly for new biotech’s that do not yet possess the brand recognition of some of the industry giants. It is imperative that the values, beliefs, ethics and attitudes that characterise an organisation and guide its practices are made clear early on.

Regulatory Compliance?

Complying with regulations, both domestic and international, require a significant amount of time and effort. A misstep along the way can lead to delays in regulatory approval and product launches, costing companies and their investors valuable time and money.?However, there are ways to expedite the process by relying on automated software, which will assist in keeping up to date on legislative changes and ensure all applicable requirements are met. Key capabilities to look for in compliance software include electronic submission of electronic medical device reports (eMDRs), automated validation, and regulatory requirement tracking (Top Challenges Facing Biotech Today and Tackling Them | ETQ)`.??

Final Remarks

Biotechnology is a gateway into a better future. It offers humanity greater ways to fight deadly diseases, and rewards innovative thinking. This ultimately leads to investors inputting generous amounts with the hope of market-beating returns. However, the flip side of this is an extremely high-risk of failure. Weathering the early stages of a new biotechnology company can be difficult, but emphasis on quality science, strategic management, securing funding, staffing, and regulatory compliance can greatly increase the chances of success.??

Copyright ? 2022 Lance Kawaguchi. All Rights Reserved.