The Illusive Carrot
Generally speaking, cities and towns welcome biotechnology to their commercial mix. They perceive the industry as on fire with potential, the stuff to underwrite communities for decades to come. Economic development interests, elected officials, and Chambers of Commerce make the case that biotechnology equals jobs, especially in regions where legacy industries have faltered or failed. Dangling the illusive carrot of jobs, and the presumption that the biotechnology industry will actually deliver substantial additional jobs or tax base is a dicey metric.
As we strolled through the international BIO exhibition this year, we asked ourselves what if we refocused the evaluative criteria for economic development success from jobs to the number of products a region’s businesses produced directly on their own or indirectly through sales and marketing partners, universities, and biotechnology companies? What if an important goal was creating an innovation milieu that was focused on scouting out and mitigating roadblocks to commercialization of products?
The financial success of pharmaceutical giants is tied to delivering and building value every year. These companiessome of them centuries oldare dependent upon a steady, rich pipeline of assets in development. They now embrace augmentation of their product pipelines through in-licensing, comarketing, and copromotion agreements from the biotechnology sector. This focus ensures balance in their R&D portfolios and is the basis for sustainable growth.
The key to product relevancy and financial success is for the life sciences company to understand, quantify, and meet the needs of customers with the tools of biology that can actually target disease and disorders. Biotechnology can also target conditions of aging at a time when a significant marketbaby boomerswith all kinds of needs are vitally concerned with keeping their bodies fun to live in for as long as possible, and they’re willing to pay for it, exhibiting solid buying power.
So, what can we learn from this? There is a willing buyer at the other end of the innovation process that’s not necessarily tethered to reimbursement. Also, in addition to finding cures for humanity’s scourges, there is a burgeoning market for so-called lifestyle interventions, e.g., vision repair, looking good through cosmetic surgery, pain-relieving measures that restore mobility.
Another point to keep in mind is that biotech academic research organizations and start-ups may, in fact, not matriculate to FIPCOs (fully integrated pharmaceutical companies), providing lots of employees to communities and tax revenues, as did legacy companies in decades past. There’s a high probability that biotech companies will represent research innovation to major pharma, which in most cases are geographically distanced from the regions who wish to create biotech corridors.