Biotechs also now need to look beyond their own borders to emerging markets for financing and market opportunities.
Smart companies will look outside their borders and think strategically about the different value their products may hold in different markets, particularly where the industry is in an earlier stage of development and acquiring critical technology may provide greater value to them.
Companies are now taking a variety of alternative approaches to access capital, such as turning to registered direct offerings, selling future product royalty streams, and selling options to promising compounds.
In addition, since biotech companies are competing in an investment-constrained environment they often only have sufficient funds to complete one phase of a project successfully before building the capabilities required to move their project through the next phase. This is why companies are beginning to adapt their business models to a more virtually integrated one.
A biotech start-up today, therefore, finds itself in an industry that is radically different than it was 30 years when many of biotech’s elite companies got their start. The world market for health and wellness has also undergone profound globalization. Companies are not simply setting up foreign subsidiaries to manage local activities such as clinical trials and marketing. Rather, they are reaching out through mergers, acquisitions, partnerships, and alliances to establish needed technologies and skill sets.
In addition, new international companies that blend talents and experiences from various parts of the world are being born. These global operations afford a number of advantages beyond the acquisition of complementary technologies including greater distribution and market access.
Global emerging markets, particularly in China, India, and Brazil, will grow faster than the U.S. and Europe. Increasing affluence, a growing middle class, and government policies will make healthcare big business in these countries.
The global nature of biotech will put pressure on the U.S. to maintain its dominance and we will see increasing evidence of other countries/regions taking the lead in some technologies and business sectors.