Realising a biotech’s potential (2022)

Booming biotech sector at the centre of innovation

While many sectors have struggled during COVID-19, the biotech sector has continued to grow and attract high investment. By the summer of 2020, 37 biotech companies raised a total of $6.7 billion through US IPOs, compared to $5 billion in all of 2019 across 51 IPOs.1The Nasdaq biotechnology index rose to a five-year high in December 2020 – up more than 25 per cent since the start of the year.2

Biotech’s presence in biopharma research and development (R&D) has also been increasing in recent years. In 2019, the number of biotech products in the R&D pipeline increased by 14 per cent from a year earlier – from 4,751 products to 5,422.3 In particular, more than 300 next-generation therapies, such as gene and cell therapies, are currently in biotech’s late-stage pipeline, three times more than in 2009,4and between 2018 and 2019 the number of these therapies in pipelines rose by more than 20 per cent.5 In addition, biotech companies continue to play a leading role in developing, alone or in collaboration with other players, COVID-19 vaccines or treatments.

What is required to scale?

As biotech companies attract fresh investment, they need to consider how they can scale up and what is required, in order to deliver on their promise of providing innovative medicines to patients. Early in the life cycle, a biotech company’s management team typically grows the business through a few core assets and limited programmes, focusing its resources where the most value can be gained such as differentiation in manufacturing, understanding of disease and biology, or drug chemistry. As the company grows, however, and attracts significant capital (including from IPOs), management needs to consider the following:

  • Do we need to build a commercial organisation or can we remain an R&D company as we scale?
  • What pipeline or portfolio will be required to support our growth into a mature biotech business?
  • How many products/candidates does it take to ‘win’?
  • How many therapeutic areas should we enter?
  • To what extent should we collaborate or go it alone, and in which geographies?

One of the core drivers of longer-term success is to build a portfolio of products to sustain growth – this research seeks to identify which portfolio approaches have enabled biotechs to scale, brought innovation to patients and created financial success for investors and founders.

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Supporting growth with licensing and product sales

Commercial success comes from revenue generated by effectively and efficiently launching one or more products across key markets. A product approved by regulators is both a key driver of a company’s valuation and often a hallmark of maturity. But this approach to revenue generation is not the only path a company can take. Almost 50 per cent of the biotech cohort studied achieved maturity without an approved product. Instead, management teams in these companies relied on their R&D pipeline profile and strategic collaborations or alliances with other players for revenue.

In the majority of cases, these collaborations and/or alliances are with similar-sized or larger players. Thus, by granting their partner potential commercial rights, these biotechs are able to gain access to the capital and the expertise required to enable them to take their clinical programmes to the next milestone. About 50 per cent of agreements reviewed were tied to discovery programmes and pre-clinical research, with the majority of the remaining being used to support Phase 2 trials. Within the cohort analysed, only one company reached maturity in the absence of any reported deals. In this case, its lead drug targeted a large therapeutic area (TA) and life-limiting disease producing positive phase III clinical study data.

Diversifying pipeline through assets, clinical programmes and therapeutic areas

In addition to revenue generation, the R&D pipeline profile is also crucial to being able to scale. Biotech companies that have scaled successfully have managed to diversify their R&D pipeline and de-risk their business while sustaining innovation. Analysis of the cohort of 20 companies we looked at highlights this (figure 3). Mature biotechs drove diversity by increasing their drugs assets and clinical trials, not only in terms of absolute number but also in the number of trials which progress to the later stages of clinical development (figure 3). To ensure that this pipeline diversity continues, biotechs should make efforts to ensure their pipeline is sustained. For some this means working closely with universities and institutions to conduct innovative research. For others an in-licensing approach is required to continue the development of pre-clinical assets. This way companies continue to demonstrate the strength of their R&D capabilities and pipeline, driving market confidence and the subsequent willingness of other players to collaborate and partner. For successful biotechs, collaboration remains an important element in scaling – on average, between 30 and 40 per cent of the trials are conducted in collaboration with other players at both IPO and maturity stages.

Naturally, as we see fluctuations in the average number of clinical programmes, collaborations between companies, and drug assets, it can be expected that the number of targeted therapeutic areas (TAs) will also fluctuate. However, our research shows that for scaling biotechs, this number remains constant – at three, on average. Management teams should therefore make an early choice to focus on a limited number of TAs. A choice likely driven by the drug assets they have, a need to optimise the use of limited resources and, for some, the need to best prepare for commercialisation and health care profession (HCP) engagement.

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Determining the composition of a biotech’s pipeline in order to achieve sustainability and long-term growth requires management to balance multiple factors across diversification and prioritisation (figure 4). However, it is important to note that it is a challenging but critical exercise, which should balance diversification and prioritisation. The process itself needs to be based on a rigorous fact-based assessment across different elements, including investment and return, timing to value, strategic fit and risks. And of course, it has to be based on excellent science.

Three scaling archetypes

The winning ‘blueprint’ for scaling seems relatively homogenous: generate revenue through successful deals or R&D collaboration, and diversify the pipeline. However, to understand what the winning blueprint might be in more detail, we went beyond the aggregated quantitative analysis and further assessed each individual biotech. From this, three different biotech blueprint archetypes emerged: end-to-end, focus and diversify (figure 5).

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Some successful biotechs look to build an ‘end-to-end’ entity from R&D to commercialisation, bringing their product(s) to market themselves. For other biotech companies most of their attention remains on their R&D profile. Among those which are R&D focused, some take a ‘diversify approach’, expanding the number of assets significantly across multiple therapeutic areas and relying heavily on revenue generated through collaboration deals to progress assets past pre-clinical and Phase 1 stages. Drugs are often set to be co-commercialised with a partner. Others generate value in a similar vein but via a more ‘focused approach’, driving R&D forward with limited investment in diversification while creating optionality for a potential launch or out-licensing deals.

Five key dimensions to succeed in the scaling journey

Clearly, as research shows, there is no single winning blueprint for maturing successfully, and blueprints alone cannot provide success. Instead, our experience and research suggests that biotechs that mature successfully are those where the management team makes strategic and measured choices spanning across five dimensions:

1) the breath of assets or trials to develop

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2) the prioritisation of markets

3) the extent of use of partnerships or collaborations

4) the balancing of scientific considerations with market access

5) the timeline to pursue.

By balancing these dimensions (figure 6) biotech companies are in a position to build the right capabilities and teams, galvanize the organisation and implement their chosen route to scale successfully.

It is not sufficient to just plan and implement a route to maturity; a biotech company's management team must routinely reassess their position and decide when a change in path is needed. A clear understanding of the choices to be made across dimensions and a blueprint matching the company’s profile and ambitions makes it possible to navigate the scaling journey successfully.


What makes a biotech successful? ›

A successful biotech startup will focus on solving a problem and fit the technology to it, not the other way around. Solutions in search of problems generally do not make it very far: choose a problem and work to solve it.

Is biotechnology an industry? ›

Biotechnology is a science-driven industry sector that uses living organisms and molecular biology to produce healthcare-related products. Biotechnology companies also develop therapeutics or processes (such as DNA fingerprinting).

How many biotech companies are there in the US? ›

There are 6,653 biotech companies in the United States.

A cursory look into the number of biotech companies in the US reveals that over 6,600 biotech companies operate in the country.

What percentage of biotech companies fail? ›

Biotechnology is also characterized by long development lead times. It can take a decade to get a new drug from the test tube to the pharmacy shelf. What's more, there is an overwhelming likelihood of failure, as 90% of all prospective new drugs fail to reach approval.

What is the future of biotech? ›

Automation and data-driven processes are increasingly being incorporated into biotechnology, and anticipated to radically improve the predictability and reproducibility of research and manufacturing outcomes by 2040.

Is biotech the next big thing? ›

So, this brings us to our question – Is biotechnology the next big thing? Our answer is, yes, it is. Given its big reach, the industry is estimated to grow at a very high compounded annual rate, and the demand set to increase.

Is biotech stressful? ›

Obviously there is pressure at all jobs and certainly academic life has it's own unique pressures and stress. In biotech, the pressure can become difficult because hundreds of thousands, maybe even millions of dollars can be on the table, riding on your success.

Why is biotech growing so fast? ›

Key factors that are driving the biotechnology market growth include favorable government initiatives, plummeting sequencing prices, growing market demand for synthetic biology, and rising R&D investment by the public as well as private agencies.

Who makes the most money in biotech? ›

Average Salary By Company
RankCompanyAverage Biotechnology Salary
16 more rows

Is biotech a good investment? ›

Biotech stocks, especially in a bear market, can represent a tremendous value to investors with a moderate to high risk-tolerance. To mitigate risk, you might consider investing in a biotech ETF, like the iShares Biotechnology ETF (IBB) or the SPDR S&P Biotech ETF (XBI), instead.

What is the largest biotech company in the world? ›

Which Are The Largest Biotech Companies In The World?
RankCompanyMarket Cap in 2016 (USD billions)
1Johnson & Johnson NYSE: JNJ314.1
2Pfizer NYSE: PFE196.3
3Roche OTCQX: RHHBY192.1
4Novartis NYSE: NVS170.5
16 more rows

Are biotech companies risky? ›

Investing in biotech is considered by many to be high risk. The sector comprises companies that have an 85% to 95% failure rate on everything they attempt to invent. Even to achieve success takes about 10 to 12 years, and most biotech businesses do not have any measurable revenue for a long period of time.

Why do most biotech companies fail? ›

Biotech startups fail for a variety of reasons but, when you look beyond the obvious causes – such as flawed science, inexperienced leadership, lack of capital and a changed market – several unanticipated commonalities still remain.

What is the best biotech stock? ›

The 7 Best Biotech Stocks to Buy
IBBNasdaq Biotechnology Ishares ETF$121.03
CRSPCrispr Therapeutics Ag$71.17
MRKMerck & Co$86.08
3 more rows
5 days ago

What are the 4 types of biotechnology? ›

Today, the five branches into which modern biotechnology is divided — human, environmental, industrial, animal and plant — help us fight hunger and disease, produce more safely, cleanly and efficiently, reduce our ecological footprint and save energy.

Which country has highest demand for biotechnology? ›

United States is perhaps the country with the best career scope and research prospects as far as Biotechnology and other such Disciplines are concerned. After US, Germany and Signapore are two of the other best places to study and research.

Will biotechnology be in demand in future? ›

Biotechnology as a career offers a wide range of opportunities across the medical, healthcare, and pharmaceutical research and you will also get to work in Biochemistry, Biophysics, Genetics, Environmental Science, etc. which are some of the in-demand industries for Biotechnology graduates.

Does Bill Gates own ginkgo bioworks? ›

Ginkgo Bioworks

Ginkgo Bioworks is a biotech company that went public through a special purpose acquisition company last year. The company has the backing of Bill Gates and can design and print DNA. Cannabis investors will recognize this company from its partnership with pot producer Cronos Group.

Who is the leader in synthetic biology? ›

The United States is currently a leader in synthetic biology, as well as biotechnology and biomedical research, and it is the focus of a great deal of private sector investment; these investments may help to bring at least 100 products to the market in the near future.

Who is buying ginkgo bioworks stock? ›

Cathie Wood made yet another hefty purchase of Ginkgo Bioworks (DNA) stock on Thursday. Wood bought an additional 1 million shares of the company, adding to the more than 92 million shares previously owned.

Do you regret working in biotech? ›

Not in general, as I love Biological research. But, to be very honest, when I see some friends of mine earning more and more money or respect with much lower qualifications than I do, specially in the field of Engineering, I do regret! Someone might say I am a bit jealous!

Are biotechnologists happy? ›

Biotechnicians are below average when it comes to happiness. At CareerExplorer, we conduct an ongoing survey with millions of people and ask them how satisfied they are with their careers. As it turns out, biotechnicians rate their career happiness 3.1 out of 5 stars which puts them in the bottom 40% of careers.

Why is biotechnology so hard? ›

Biotechnology is a very complex field and requires intelligence, creativity, and more importantly, patience & perseverance. You need to remain updated and aggressively seek opportunities to gain hands-on experience and training.

Is biotech a bubble? ›

A significant increase in venture financing in the biotech private sector was seen last year, entering a bull market where stock prices were on a continuous rise. This caused a biotech bubble that has since burst where stock declined, resulting in this year entering a bear market.

Why are biotech stocks risky? ›

Biotech stocks also come with risks due to the potential that some products under development may never make it to market. Biotech firms face many regulations, including from the FDA, adding the risk of uncertainty surrounding developing new drugs.

What are 5 biotechnology examples? ›

What is Biotechnology: Types, Examples, Branches and Applications
  • Medical Biotechnology. Examples of Medical Biotechnology. Vaccines. ...
  • Agricultural Biotechnology. Examples of Agricultural Biotechnology. Pest Resistant Crops. ...
  • Industrial Biotechnology. Examples of Industrial Biotechnology. Biocatalysts. ...
  • Environmental Biotechnology.

Are biotechnologists highly paid? ›

Answer- Biotechnology is a booming career option with its demand emerging in sectors such as pharmaceutical, animal husbandry, agriculture, healthcare, medicine, genetic engineering, etc. Besides, biotechnologists are paid well for the work they do. Therefore, it is definitely a good career option.

Is a masters in biotechnology worth it? ›

If you'd like to advance your career in this rapidly evolving field, a master's degree in biotechnology is worth the investment. “A master's degree is a real sweet spot because it opens you up to many more opportunities,” Auclair says.

What is the best biotech company to work for? ›

The Top 10
  • 1Horizon Therapeutics.
  • 2AbbVie.
  • 3Genentech.
  • 4Vertex Pharmaceuticals Inc.
  • 5Astellas US.
  • 6Exact Sciences Corp.
  • 7Otsuka America Pharmaceutical Inc.
  • 8Ashfield healthcare.

What is the number 1 biotech company? ›

Johnson & Johnson

What are the top 5 biotech stocks to buy? ›

In terms of fundamental and technical measures as well as 12-month performance, the best biotech stocks today are:
  • Catalyst Pharmaceuticals (CPRX)
  • Vertex Pharmaceuticals (VRTX)
  • Genmab (GMAB)
  • Neurocrine Biosciences (NBIX)
  • Supernus Pharmaceuticals (SUPN)
4 days ago

Which is the best pharma stocks to buy? ›

Best Pharma Stocks to buy: Model Portfolio
Company NameWeightageCMP (Sept 2022)
Dr. Reddys Laboratories Ltd.17%4171.2
Divis Laboratories Ltd.19%3607
Cipla Ltd.22%1035
Biocon Ltd.11%299.45
4 more rows
15 Sept 2022

What's the difference between biotech and pharma? ›

Biotechnology and pharmaceutical companies both produce medicines, but the medicines made by biotechnology companies are derived from living organisms while those made by pharmaceutical companies generally have a chemical basis.

What is essential for a new biotechnology firm to succeed? ›

It turned out that it is essential to invest in three critical components to guide a successful biotech business: A strong business management, building sublime science, and a solid financing strategy.

What are the key entrepreneurial skills to become a biotech entrepreneur? ›

5 Ways to Become a Successful Biotech Entrepreneur
  • Validate your idea in the biotech market before you do anything else. ...
  • Communicate your vision clearly to others. ...
  • Learn to tolerate uncertainty and take risks in biotech. ...
  • Find a balance between accurate science and good business. ...
  • Determine your definition of success.
27 Apr 2020

How often do biotech startups fail? ›

Overall then, a generous reading would be roughly 23% success, 47% likely or definite failure, and 30% "work in progress". Interestingly, the number of ULS startups that seem to be active but show little evidence of actual progress has been increasing over the years.

Can you start a biotech company without a PhD? ›

If your desire is to run a research section at a biotech or pharmaceutical company, odds are you're going to need a PhD and potentially post-doctoral experience. However, it's not true that there are no science jobs for people with bachelor's or master's degrees in biopharma.

How much does it cost to start a biotech company? ›

However, it is quite possible today to start a biotech company on a shoestring budget ($0-$200k starting costs). Many successful biotech companies started in just this way.

Why does a biotech business exist? ›

“Biotech drug development firms exist because big pharma no longer has the capacity to discover and develop new drugs,” he said. Instead, they focus on commercialization and end of development with big phase III trials.

Why bio-entrepreneurship is important? ›

Firstly, bio-entrepreneurship has the potential to develop new techniques to protect the environment from diseases, fuel production, feed the hungry, and various other product preparations. Hence, these products provide new and better ways with minimum side effects to detect, cure, and prevent harmful diseases.

How do you become an entrepreneur in science? ›

From Science to Entrepreneurship - YouTube

Why do most biotech companies fail? ›

Biotech startups fail for a variety of reasons but, when you look beyond the obvious causes – such as flawed science, inexperienced leadership, lack of capital and a changed market – several unanticipated commonalities still remain.

What percentage of biotech companies succeed? ›

Biotech companies also had negative net income compared to control companies that had positive net income, except in recession years. The analysis found that 53% of biotechs and 51% of nonbiotechs failed to maintain their IPO market value, while both groups generated similar amounts of shareholder value.

Why do 90 startups fail? ›

Key Takeaways. According to business owners, reasons for failure include money running out, being in the wrong market, a lack of research, bad partnerships, ineffective marketing, and not being an expert in the industry. Ways to avoid failing include setting goals, accurate research, loving the work, and not quitting.


1. The New Age of Innovation Centres : Realising Potential Return on Investment
(Mranti Park)
2. ExpreS2ion Biotech - Potential value of COVID 19 vaccine candidate
(HC Andersen Capital)
3. Realizing the Potential of Genomics-Driven Precision Medicine
(Impetus Digital)
4. The New Age of Innovation Centres: Realising Potential Return on Investment
(Malaysia Digital Economy Corporation)
5. One step towards realising our potential - Episode 2
(RiverRhee Consulting)
6. How to pitch to biotech venture capitalists: two "mock pitches" plus fundraising tips
(Bay Bridge Bio)

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