5 Obstacles to the Launch of your Life Sciences Business and How to Overcome Them
It is impossible to overestimate the contribution to global public health and the eradication of serious diseases made by companies engaged in the life sciences and biotech sector. The rapid development of several Covid-19 vaccines has grabbed the headlines but this is an industry driven by the constant pursuit of innovation in the fields of therapy, surgical procedure, medicine and medical devices. Life sciences enterprises are, almost without exception, private sector organisations or charitable bodies carrying out the work that many people would consider to be the responsibility of governments. Instead, it is these private companies that deliver the solutions.
If you are committed to entering this industry with a business startup of your own, then you need to be fully aware of the challenges facing you, chiefly at the start but often extending into any scaleup period. Some have been constant for decades while others reflect recent changes in the industry and the market. Here are five of the biggest obstacles in the way of a smooth startup.
As with any startup, your prime concern is likely to be funding, which is a common problem for all early stage European biotech companies. Securing venture capital at a level that will sustain you through the uniquely protracted time it can take to get biotech products to market is a daunting task. Many venture capital investors, while recognising your work as essential, are nevertheless discouraged by both the delay and the uncertainty in seeing a return on their investment. In recent years, wealth managers have softened their attitudes and the creation of new financial products has made life sciences investment more attractive but the struggle is still uphill.
The UK government has stated a wish to see the country become ‘the leading global hub for life sciences’ and launched a 10-year strategy to make this a reality. At the core of this initiative is the question of data which, since the introduction of GDPR, has become a significant consideration in life sciences. It is acknowledged that increased use of genomics and health data can greatly enhance our understanding of the safety of new medicines and healthcare technologies, but at present, data protection law severely limits access to and use of such data. Ironically, at precisely the time when digital technology is finally able to provide evidence of inestimable value in the development of new treatments and preventive measures, that evidence is largely untouchable. For any company entering the field today, these limitations could prove a serious bar to success.
2022 could be a pivotal year if the government is able, as it intends, to create ‘a new, separate lawful ground for research, subject to suitable safeguards’. This will include authorisation to use data collected for one purpose in the service of a separate research project.
Sectors such as biotech and pharmaceuticals are now global. Multinational partnerships are commonplace, particularly in research projects, and competition is fierce. A newly launched life sciences business will need to plan its strategies in the light of this. The UK has a strong reputation in life sciences, not least because of a strong tradition of world-leading academic research, and this will benefit any UK startup. However, there are some concerns that after the withdrawal from the EU, researchers here might be locked out of some sources of EU funding and find it hard to persuade investors that the UK can still thrive on the world stage. A new business will benefit from forming international partnerships at the earliest stage, not only to take advantage of skills at the international level but also to ensure access to the widest pool of resources.
Before launching, you will assemble a core team of researchers and scientists, the people who share you goals and are committed to the same vision. What you need to bear in mind is that by its very nature, life sciences work is full of surprises. As you research and develop new products, it is highly likely that you will need to recruit specialists in areas that you don’t currently have the resources to cover. Finding the best talent is difficult in every business and the global competition for personnel in this industry is intense. Remember you are up against large, cash-rich firms fishing in the same pool. You need to make your offer more attractive to the scientists and academics on whom your growth depends. That means being flexible, adaptable and ready to think creatively about how to meet your staffing needs. It also means marketing yourself to the jobs market, focusing on the strength of your projects, the career opportunities which are unique to a dynamic startup, and the dependability of your funding sources.
Securing Intellectual Property Rights
Intellectual property is the foundation of your business. The entire value of your operation lies in IP rights and it is these which will act as the strongest magnet for venture capital. Investors will want to have guarantees that these rights are protected, generally in the form of patents. Without them, there is no viable business. They will also expect a new life sciences business to be thinking about patentable products and technologies from the very start. This makes sense from the investors’ point of view, but it is important to remember that if you apply and obtain a patent too soon, you have set the clock counting down to the expiry of that patent, which curtails your longer-term profits. Going too early is a common problem with apps, for example, which may need several revisions to reach their optimum effectiveness. You should strike a balance and secure IP rights at the time which is most appropriate for each product and procedure.
The challenges are considerable, but the potential for long term profitability and the satisfaction of having a positive influence on millions of lives are worth the considerable effort.