7 Steps For Building Strong Startups In The Highly Regulated Biotech Industry
Transforming an innovative idea into a commercially viable business is no small feat for any startup — let alone one competing in the biotechnology industry. Although it’s a tightly regulated field with high barriers to entry, current market trends give a promising prognosis for startups probing this field.
As our economy recovers and biotech uses extend into other industries, this market is expected to surpass $320 billion by 2015.
The potential for high returns is clearly there, but venture capitalists take extreme caution when investing in biotechnology. This means entrepreneurs need to consider these barriers and enter the market with sound footing in this industry to capitalize on these lucrative opportunities.
Break Into Biotech.
Not only is biotechnology closely regulated, but it’s also highly competitive. As an entrepreneur taking your product to market in this field, consider these steps prior to launching:
1. Brush up on industry basics. Understanding important regulatory science, concepts, and terms, such as the gap between research and development, will give you an instant credibility boost. Educating yourself on the particulars in your field will also inform important product decisions.
2. Take the market’s pulse. Entering an unknown market is never wise. Understand what’s going on and what other professionals are doing in biotechnology. New trends or regulations may develop, which could affect your product, so it’s crucial to stay on top of these.
3. Identify your options. There are many routes you can take to get your biotech product to market. For example, a green tea extract could be turned in into a drug, food, or dietary supplement — each with a different return and profit.
4. Expand your industry knowledge. To get an even better understanding of regulatory sciences and what’s going on in your field, start attending conferences, conventions, or informational sessions, such as Biocon, BioPharm America, California Bioenergy, and Xconomy events.
4. Hire a consultant.When making changes to the process or development model, this resource is invaluable. But make sure the consultant has hands-on experience in issues with both industry and government regulations.
5. Develop viable relationships. It isn’t enough to have resources that benefit only one phase of a product cycle. Focus on cultivating relationships with professionals and organizations that can help before and after development.
6. Know the key players. In biotechnology, you’re not beholden to one government agency, such as the FDA. You’ll often find yourself collaborating with the FTC and DEA, depending on your field, so understanding how these agencies work will help you cut through red tape faster.
Fully applying these steps will give you a more accurate perception of relevant data and market trends and put you in a much better position to make critical decisions.
Find Your Biotech Niche.
Aside from the traditional track for biotech startups, there are other ways to get a product to market with fewer obstacles and a lower cost of entry.s
A couple of these options include:
1. The orphan drug track. These pharmaceuticals have been left underdeveloped largely due to limited profit potential. Agencies can lift certain regulations for these drugs to maintain momentum. For example, it isn’t possible to test 1,000 patients in a clinical trial if a smaller number of people need the medication. Plus, startups pursuing this route may be eligible for tax incentives, research subsidies, enhanced patent protection, and stricter marketing rights.
2. Unmet medical needs. The Food and Drug Administration Safety and Innovation Act has expedited the process of approval for the development of medications used to treat severe diseases and conditions, which could help keep biotech startups afloat throughout all phases of development. If your field of biotech can serve this population, this may be a profitable option for you.
The biggest setback for biotech startups is often the ambiguity of the marketplace. But if you can account for your costs, understand your options, and recognize the potential value of your product, you can knock down industry barriers and create a lucrative, life-enhancing product.
This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.