Commercialisation of biotech assets – learning from the pioneers: part one

Dan Heapy brings strategic marketing expertise to critically assess the approaches taken by the biotech companies – and offers recommendations for future biotech development.

With the ever-increasing need to provide demonstrable value for new innovation, we can learn some lessons from how the initial wave of biotech companies fared. But today’s market place is very different, and the process of commercialising biotech successes is more complex than ever – particularly identifying the market opportunity (segmentation and positioning) and achieving clinical development and reimbursement (market access).

As you might expect, biotechnology has moved on dramatically over the past 50 years. There are now thousands of specialist companies searching for the next ‘big thing’ But that ‘thing’ is not likely to be quite as ‘big’ as it once was, or at any rate it will be targeted at a more specific condition.

In the early days, when penicillin was being discovered in the 1940s, and steroids in the 1950s, these really were big steps forward, which would have a huge impact across a wide range of therapy areas. Nowadays it is more likely to be about developing drugs for very specific conditions – a point well illustrated by the fact that there are almost 500 drugs currently in development for rare diseases in the US alone.


“Nowadays it is more likely to be about developing drugs for very specific conditions…”



The traditional role of biotech has held the sector back from truly commercialising its products over the years. Drug development was the sphere of large pharmaceutical companies, or Government- or university-funded academic work. Using this scientific experience, and as new techniques and genetic mapping became more widespread, small ‘biotechnology’ companies began to emerge.

Those successful companies almost exclusively looked for partnership with big pharma for support. Without the commercial expertise of how to optimally design phase II/III trials, or how to assess the market opportunity, many biotechs were left with little option.

It is this heritage in science that has held many biotech companies back from fully realising the true commercial value of their assets. The scientific and clinical focus on product specificity is of course fundamental to a biotech company; however, an understanding of future market needs and go-to-market requirements is also essential for success.

It is not just new biotech companies that have failed to look to the future; indeed many of the well documented Phase II / III product failures from big pharma may have been averted with better commercial foresight earlier in the drug development process.

“It is not just new biotech companies that have failed to look to the future”

For those companies which develop a promising compound, a new phase of commercial development awaits. If at one stage there was only one sensible way to proceed (partnership with big pharma), nowadays there are more options, but some of these may necessitate a new strategic direction for the company, so this is a big decision.

History shows that those biotech companies which enter into apparently lucrative alliances with big pharma can end up becoming stifled, as in the well-publicised case of Trimeris’ decline, so a carefully considered choice at this stage is essential.

For a biotech company with a new molecule to bring to market, there are three main options:

1. Partnership with a pharma company, either handing over the whole commercialisation process and taking royalties, or retaining some rights to commercialisation. This is both an attractive and the most-trodden route for biotech historically, but this option is not right for everyone, as often control of your product / company can be lost.

2. Sell the product entirely; or else, if the biotech is a one-product company, sell the whole company into a pharma company. This is an option that many big pharma companies like for its simplicity, but how can you ensure that you are maximising the full value of your product or company?

3. Develop and launch your own product: in effect make the transition from biotech company to fully-fledged pharma company. This approach often requires significant financial backing and hence carries more risk – however, the rewards can be spectacular.

Over the next three weeks, I will review each of these options in turn, looking at the pros and cons, highlighting the key questions that need to be asked, and taking learning from others who have taken that particular path. Most importantly, I will identify the key steps for each of the three strategic options, so that whatever path you take, you will stand the maximum chance of success.

Part two: Commercialisation through partnership-building with pharma, can be viewed here.


About the author:

Dan Heapy is Associate Partner at The MSI Consultancy. He can be contacted at

What is the best strategy for a biotech with a new molecule to bring to market?