How to make it in the biotech business
If biotechnology is booming, why are companies failing to get their products into the market? Expert in the sector, Michelle McNamara tells us why, and how to succeed.
Biotechnology is a large and growing industry – generating around $400 billion in revenue in 2019 and forecast to almost double in growth in five years. Lecturer at the University of Melbourne Michelle McNamara says there are two key reasons for this: customer pull and technology push.
“There’s a great need for drugs and devices in healthcare – to address all sorts of diseases, particularly chronic illnesses and our ageing population – and there’s the increasingly important question around how to feed the growing world”.
Major advances in technology, such as in gene editing, fermentation and tissue engineering, are providing the industry with an increasing ability to solve these issues. Producing food sustainably and efficiently is just one example.
Despite the demand, succeeding in biotech is challenging, with very few product concepts entering development becoming commercial successes; even those with proof of concept can fail in the marketplace.
Various features of the industry contribute to this, including:
- Long lead times
- Considerable regulatory hurdles, particularly in pharma and genetically modified foods
- High quality standards
- Heavy dependence on intellectual property
Having adequate finance to meet these challenges is also critical to success. For start-ups, which often initiate development, particularly of cutting-edge technology, this means eventually partnering with large multinational companies that have a route to the global marketplace.
But within this model, many still fail to develop products that go on to succeed because they lack the right suite of skills.
“Start-ups often begin with a technology but fail to adequately explore who the customer is and what their needs are. Because they’re very technology focused, they lack an integrated approach to delivery of a product that the customer wants and needs”, says McNamara.
But success is possible. It depends on matching science expertise with strong business skills.
"Companies that succeed are well organised and well run. They are multidisciplinary, customer-focused and collaborative, and they have a strategic and integrated system for managing product development”.
“You need to understand what your value creation strategy is, how to design and build quality into your prototype, and how to test and modify that. You need a regulatory strategy that incorporates these elements. And you need to design trials that deliver a product the customer needs. A lot of effort upfront is required to design a commercial product that is appealing in the end.”
The University of Melbourne’s new Biotechnology (Enterprise) program takes a holistic approach to biotech commercialisation, built around the concept that integrated management is needed to succeed.
With an emphasis on group work and true commercialisation exercises, subjects are viewed through four key lenses: value creation strategies (strategic marketing); quality and customer driven innovation; a strategic approach to regulatory affairs; and prototypes for field and clinical trial programs.
“We’re teaching students how the different components of product commercialisation interact with each other in producing a customer focused-product. This will enable them to be vital contributors to product commercialisation teams and have the best chance at seeing their team's product in the global marketplace,” says McNamara.
Offered for the first time, this fully online course is the only program like it.