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Entrepreneurship - Establishing a Biotech CompanyBY: Geetanjali Murari | Category: Industry-News | Submitted: 2013-03-15 01:58:14
Article Summary: "This article helps us in determining the business success in the field of biotech and common challenges associated with it. It is very important to know the requirements for opening a successful biotech company. Who can start it, how we can start it and what are the necessities needed for its establishment. These are the factors.."
Biotech Companies are entrepreneurial. They are founded by an individual or perhaps a small group of people who are scientifically qualified. There are now over 300 public U.S. biotechnology companies out of 600 public biotech companies worldwide which generated over $40B (72% of worldwide biotech product revenues) in 2002. The first biotech companies formed were, Genentech (1976), Biogen (1978), Amgen (1980), Immunex , Chiron and Genzyme in 1981.
In USA, almost 885,000 people are employed in this field with around 17% in Agricultural Feedstock & Chemicals, 33% in Drugs & Pharmaceuticals, 37% in Medical Devices & Equipment and 13 % in Research & Testing. More than 325 million people worldwide have been helped by 160 approved biotech drugs and vaccines. More than 350 more biotech drugs and vaccines now in clinical trials targeting more than 200 diseases. Biotechnology is responsible for hundreds of diagnostic tests, including HIV tests and home pregnancy tests, DNA fingerprinting, forensics, etc.
Patent and licensing maximizes the research benefits to the society. It facilitates the commercialization of Investigational Product (IP). This help in creating many biotech companies and jobs for the common mass and also provide a fair financial return to university on licensed Investigational Product (IP).
The critical path for drug development require observation, concept, characterization, production, preclinical study, formulation, manufacturing, clinical evaluation, regulatory approval and commercial development.
Now-a-days, Biotech-pharmaceutical alliances has become quite common. Even biotech companies are trying to get involved into the pharmaceutical products. This alliance leads to the development of Biopharmaceutical companies like Biocon in India. This has increased the arena of the innovative power of the people. As we know, biotech companies are good at some things, like, invention, proteins expression, R&D work, etc, and pharmaceutical companies are good at other things, like, clinical research, drug designing, marketing, etc. the joint venture of these two big sectors could lead to great profit in business.
Challenges faced by pharmaceutical companies are:-
i) Research and Development (R&D) spending growing faster than sales growth.
ii) New product discoveries lagging relative to industry growth needs.
iii) Need for patent or licensing products from outside.
iv) Blockbuster drugs going off patent as 40% of pharmaceutical revenues become generic in 2005.
v) Only 1 drug of every 5,000 is commercialized which is very disappointing.
vi) It costs over $1M and takes over 12 years to come to the market.
vii) 2/3 of all drugs that make it to the market do not even recover R&D expenses.
The companies for getting great deal of funds and finance should have experienced management to look after the strategy and plan of the company. Investors should own the company with clear business plans or clear milestone driven events. The companies with revenue that provide services leading to products. We are in a clear need for industry savvy bank with geographical focus. Local companies will have their accounts managed by seasoned bankers who understand the industry. Not the primary lenders, but providers of critical introductions to financial resources, government contracts, strategic partners, real estate, insurance providers and others to facilitate business growth.
There are too many science projects masquerading as companies for a successful startup. We need to be careful to select science with commercial potential. We should understand the market and decide when our work is ready to become a business. A great focus id required on the secured intellectual property for our research work. The frequent and candid dialogue among investigators and stakeholders must be established. The suitable business principles must be adopted to avoid conflicts of interest. For a successful entrepreneurship, we need a promising team, perfect plan, patent for our work, a solid platform, persistence, perspiration, passion, focus, finances and of course the lady luck.
Road ahead- In future we are looking for a powerful innovation, capitalizing on human genome project. A deep pipeline improving the regulatory and increasing the rate of revenue collection. A strategic alignment with bigger companies and good corporate governance.
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