The Key to Turning Technology into Products? Management.
This article was originally published in Start Up
Executive Summary
The fundamental business model for platform technology companies hasn't changed: Build the platform, and apply the resulting discovery capability to internal product development while leveraging its value to raise cash or barter for resources. But investors today prefer companies that can articulate a short route to proof-of-concept data,. And unlike 6-10 years ago, more start-ups are now being formed around clinically savvy drug development teams that are better able to select alternative paths to near-term opportunities--be it in-licensing or even M&A--that allows companies greater flexibility.
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Jumpstart to Products
Discovery research is an ever more difficult investment to justify, so companies are placing greater emphasis on mining discoveries that have already been made but whose real value remains unexploited. Big Pharma, in part inhibited by habit and current infrastructure, has not moved aggressively in the new direction-but the jumpstart model now dominates small-company strategies and will increasingly translate into the rest of the industry.
Onyx Pharmaceuticals: Focus Is a Double-edged Sword
Onyx Pharmaceuticals announced last June that it would focus solely on its lead product candidate, BAY 43-9006, in Phase III and partnered with Bayer. Its stock has since soared. The company is responsible for some development, and so maintains an active clinical capability. It also negotiated a US co-promotion right. Both may make it an attractive in-licensor, but more than infrastructure, its greatest validation and attraction will come from showing that management made the right choice in prioritizing. It's an all-or-nothing bet, to be sure.
Jumpstart to Products
Discovery research is an ever more difficult investment to justify, so companies are placing greater emphasis on mining discoveries that have already been made but whose real value remains unexploited. Big Pharma, in part inhibited by habit and current infrastructure, has not moved aggressively in the new direction-but the jumpstart model now dominates small-company strategies and will increasingly translate into the rest of the industry.