Biotech Business Development Deals

Biotechnology is a unique industry that combines cutting-edge science with high-profit ventures. The rewards are tremendous for the winners in this space. However, the risks are great as well with the losers fading into ignominy. The competition is fierce and the resources are finite. Not every biotech company has the money keep going by themselves. The journey from research to commercial manufacturing is long and winding. It requires a steady hand and a massive amount of reserves. Development managers will often need to look outside for financial support. This can come in a variety of ways including the ones below:

Equity Sale

A common strategy for biotech business development is to raise cash through the sale of equity to investors. A lot of high net worth individuals and companies specialize in this sector. They are always trying to find promising scientific endeavors that could lead to game-changing products and services. They understand the risks involved and are willing to take it since they need only 1 in 10 investments to bear fruit in order to recoup their losses. Others may have a personal stake in the development due to a family member that requires the treatment. Several rounds of fund raising may be held at different points in the process.


In some cases, it becomes apparent that two companies have complementary strengths and that they would benefit more from cooperation rather than competition. They could begin to share exclusive information and other resources in order to leap ahead of the pack. Part of these deals are agreements on the sharing of profits in case their products make it to a commercial release. If the cooperation proves successful, then it may lead to a closer working relationship between the companies. They might even consider a merger to boost their competitiveness against bigger corporations.


As for the larger companies that are awash with cash, it may become prudent for them to acquire smaller players with interesting projects, valuable patents, and talented employees. It would be costly for these companies to reinvent the wheel and start their own research into certain areas from scratch. Buying those who have already done the work can prove to be the cheaper option since they can hit the ground running. It is less disruptive as well for the researchers. The biotech space is always a race against others so time is of the essence when developing vaccines and treatments.


The smaller players could reject these proposals to purchase their company, of course. They might prefer other ways to ensure a steady cash flow. If they have useful patents, then they can license their technologies to other players in order to collect large fees. This gives them a means to monetize their scientific discoveries and technological breakthroughs even though the end goal might be farther away. This could be enough to keep them afloat for a considerable period as long as their intellectual property is protected. This will only work in countries that respect their legal rights to the IP.

Are you ready to get help with a deal? Contact LifeSci Advisors today.

David Griffin

David Griffin