Netflix recently updated its ISP Speed Index, showing the best performing internet providers when it comes to delivering the streaming service’s content to South…
Building a biotechnology startup is a lot like getting a private university education: To make progress, you have to get past the high-cost barrier to entry.
First and foremost, biotech requires expensive clinical studies and the use of state-of-the-art manufacturing facilities. In fact, major pharmaceutical companies spend at least US$4-billion to develop a single drug. That’s not pocket change for the typical entrepreneur. But even biotech startups spend between US$20 000 and US$50 000 per patient on direct clinical trials. And with most Phase II trials requiring at least 200 people for each study, the costs quickly add up.
In addition to the high upfront costs, any money you put into the startup won’t come back to you until the FDA approves your drug, which takes an average of 11-14 years. It’s also worth noting that only one drug out of every 5 000 to 10 000 tested in preclinical trials will actually make it to market.
Given the risks, it’s crucial that you make your biotech startup as lean as possible. Otherwise, you simply won’t survive. Here are five ways to access resources and cut down on costs as you develop your product:
Biotech entrepreneurs should have a moderate level of knowledge about both the science and the product to simultaneously strategize clinical and developmental plans. You can learn about both sides of your product through the local academic community or contacts within your field.
In biotech and healthcare, bringing a product to market varies in difficulty depending on the type of product. For example, it’s easier to get a medical device approved than an actual drug, and dietary supplements and food have a lower barrier to entry than most drugs. Make sure that your plans lead you to the most viable drug type for your goals.
Build your knowledge beforehand
Knowledge of (and experience with) the various aspects of your product development will save you a significant amount of money. Many companies spend millions or even billions of dollars learning more about their products during clinical trials. You’ll save money if you enter the product development phase with a deep understanding of the manufacturing process, clinical operation, and possible side effects.
Learn from the experts
While the industrial guidance provided by the FDA isn’t law, it does give you an idea of what the regulatory body is looking for. And remember, the FDA guidance is subject to change based on your discussion with its representatives and the information and proof you provide.
Develop a working relationship with an expert in regulatory issues in your field, and forge a strong connection with the FDA to ensure that you’re following its advice. Specifically communicate your goals and progress to the FDA. It may suggest information or resources that you hadn’t previously considered. You should also search for other people’s research articles on chemical formulas or ingredients related to your product. This may provide you with safety and preclinical data to cut down on research and costs.
Outsource costs into existing structures
One of the best ways to reduce costs is by outsourcing the work during clinical trials. When you partner with a facility or manufacturer that has the required machines already installed, you won’t have to start from scratch.
Jack Lin, the CEO and co-founder of Anvil Biosciences, found that he could slash the company’s costs in half by enlisting the help of nearby company Transcriptic. By simply sending the genes he wanted cloned for use in future experiments, the finished products came back less than a week later. Lin estimated the US$5 000 cost would have doubled if Anvil had had to buy its own equipment and hire full-time staff members.
There are even platforms that can help your company. For example, Science Exchange connects biotech startups with labs to assist with research and experiments. However, make sure any third party that you’re considering working with has facilities that have been renovated to meet the FDA-required Current Good Manufacturing Practices standard.
Partner with a large firm
Partnering with a larger pharmaceutical company is one possible cost-saving option. In fact, some say that biotech depends on it, particularly in terms of talent, research and development, and funding. However, it’s important to keep in mind that when you partner with a large company, you may lose some autonomy and control over your project as it moves forward.
Unlike a startup building a mobile app, you need more than a laptop and Wi-Fi access. By planning ahead, conducting the necessary research, and forming the right partnerships, you can leap over the barriers and learn whether or not your product can make the grade.
What are some of the methods your startup has found to cut product development costs?