6 things to think about when starting a Biotech Company?
How to build a biotech startup
You are an academic researcher with a brilliant idea or some very promising results in your recent experiments. Now you’re thinking of starting your own biotech company to actually bring your invention from the lab to the market. Here are some aspects to take into account when making the step from academic research to biotech entrepreneurship.
1. Intellectual Property
You have probably heard that if you want your invention to fly on the market, you have to protect it; mostly via patents or just a well-kept trade secret. But did you take into account that other researchers may have come up with a similar idea which they have already patented? It is at least as important to perform a ‘Freedom to Operate’ search as filing your patent applications.You can either hire a patent attorney to do this FTO search or just start by going online and spend some time analyzing patent registries. A few hours of scanning through patents.google.com may give you a pretty good grasp of what’s already out there.
2. Regulatory requirements and quality management
Regulatory requirements may be quite complicated when starting your biotech, but it will save you plenty of time and investments if you take requirements into account at an early stage of your development plan. Medical products are regulated and audited by national and international agencies, like EMA and ‘notified bodies’. This means, however, that your product and the way it is produced will have to comply with certain rules and standards. For example, a diagnostic test has to comply to the EU Medical Device Regulation. Your organization has to start working according to so-called ‘Quality Management Standards’, like ISO13485 or ISO9001. Also, your product will need a ‘CE-certification’. This quality certificate can be found on any device sold in the European Union; just look at the back of your phone.
3. Evidence and maturity
In healthcare it’s all about evidence. You will find that a large part of the time and money you invest in your company goes to producing large amounts of data to scientifically and undoubtedly prove that your product works. As you may know, most therapeutic products will eventually be undergoing large (and very expensive) clinical trials. This evidence is the essential to get insurers, regulatory authorities, and medical professionals on board. Before that, however, the evidence you are able to generate serves to convince outsiders to believe and invest in your product. Moreover, the evidence you have, contributes largely to the maturity of your product. This maturity is mostly measured using the Technology Readiness Level scale from 1 to 9.
4. The right business model
A major difference between academic research and the industry is that you are now a ‘for-profit’ organization. This means that you have to come up with a very tangible plan of how someone will spend money for your invention. In healthcare, many products that benefit patients are being reimbursed by insurance companies. This insurance process, however, will take a lot of time and investment, as healthcare systems differ greatly among countries. Therefore you have to ask yourself if in the end you want your company to ‘commercialize’ the product or whether you would like to sell your innovation to a larger diagnostic or pharmaceutic company. Alternatively, you can also aim at setting up a co-development deal or hope your company is bought by a large player in the market. Try to look at what similar companies are doing to get more insight into business models.
5. Funding, funding and funding
The largest bottleneck for start-up companies is finding sufficient funding. At one hand you want to perform expensive experiments to create evidence about your invention, while at the other hand investors want to see evidence before investing in your early phase technology. This phase, which is ironically termed the ‘valley of death’, is where many potential life-changing innovations fail before they ever get off the ground. But do not let this discourage you; there are a multitude of ways to get your idea funded, think of venture capital, angel investment, crowd funding etc. You can also apply for loans and subsidies. Start off by checking out the EIC Accelerator, a subsidy type that focuses on early stage companies with a promising invention. If you have already gathered some evidence and initial funding, then Eurostars may be the right program for you.
Of course there are still a lot more aspects involved in starting up your biotech company. The main take-home message is “not to focus on the science alone”, but try to keep track of some of these less scientifically challenging aspects of starting a biotech company. These elements may very well be essential pillars to get your idea to actually benefit patients in the end.
6. Ask for support
As final advice, do not try to achieve everything by yourself. There is a great value in gathering the right team around you or sometimes it is helpful to just ask for some support. Catalyze specializes in supporting biotech companies at all stages to establish a solid funding roadmap and shape their company strategy. If you want to know more about Catalyze and find out how we can help you, please feel free to contact us.