Exploring Business Development Strategies for Pharma Startups

October 25, 2023 - Pharmaceutical startups face significant challenges in the ever-evolving healthcare industry. A 2020 Drug Discovery Today article emphasized that these challenges often result from unclear business models, the absence of a go-to-market strategy, or an inadequately defined value proposition. Moreover, the COVID-19 pandemic has compounded these hurdles, making it essential for startups to have a clear business model, product roadmap, and go-to-market strategy, as noted by Alan O’Connell, Partner at Seroba Life Sciences VC.

These companies must employ effective business development strategies that navigate the complex and highly regulated healthcare landscape to succeed. This article explores key business development strategies for pharmaceutical startups, with relevant and recent examples to illustrate their practical application.

Identify Unmet Medical Needs

Pharmaceutical startups must begin their journey by identifying unmet medical needs in the healthcare industry. Understanding the gaps in the current treatment options or the areas where innovation is needed is the cornerstone of successful business development. For instance, the rise of antibiotic-resistant bacteria has created a critical need for new antimicrobial therapies in recent years. Companies like Entasis Therapeutics have identified this need and are actively developing innovative solutions to address it.

Entasis Therapeutics, a subsidiary of Innovia, Inc., is committed to addressing the challenge of drug-resistant infections. Their leading product, sulbactam/durlobactam (XACURDO), received FDA approval on May 24, 2023, for the treatment of hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP) in patients aged 18 and above, provided that the infections are caused by susceptible strains of the Acinetobacter baumannii–calcoaceticus complex. This instance underscores the significance of identifying unmet medical needs and illustrates how a focused approach to a pressing healthcare issue can stimulate business growth in the pharmaceutical industry.

Build a Strong Scientific Team

Pharmaceutical startups rely heavily on their scientific expertise. As such, building a strong scientific team is essential. Recruiting individuals with diverse expertise and a passion for innovation is key to the success of any pharmaceutical startup. CRISPR Therapeutics, a gene-editing company, exemplifies this strategy. They have assembled a team of world-class scientists and researchers to advance their gene-editing technologies.

CRISPR Therapeutics has made significant strides in advancing therapies for genetic disorders and immuno-oncology. Their successful collaboration with Vertex Pharmaceuticals to create a treatment for sickle cell disease (SCD) known as exagamglogene autotemcel (exa-cel), a one-time therapy for SCD and transfusion-dependent beta-thalassemia (TDT), exemplifies how a proficient scientific team can drive promising business growth and therapeutic breakthroughs.

On June 8, 2023, the FDA accepted the Biologics License Applications (BLAs) for the investigational treatment exa-cel for severe SCD and TDT. The FDA granted Priority Review for SCD and a Standard Review for TDT, setting Prescription Drug User Fee Act (PDUFA) target action dates of December 8, 2023, and March 30, 2024, respectively.

Establish Collaborative Partnerships

In the pharmaceutical industry, collaboration is often the key to success. Pharmaceutical startups should seek strategic partnerships with established pharmaceutical companies, research institutions, and healthcare organizations. These partnerships can provide access to resources, expertise, and distribution networks that are otherwise out of reach. Collaborating with the right partners is essential for growth. This includes strategic investors who can provide funding and valuable support. Researching and choosing investors who believe in and support the startup's mission is crucial. Additionally, co-founders with complementary backgrounds can help fill expertise gaps and identify potential issues from different angles.

For instance, Moderna has made groundbreaking advancements in mRNA-based therapies. Moderna's strategic partnership with AstraZeneca to develop a COVID-19 vaccine, now known as Vaxzevria, allowed them to leverage AstraZeneca's global reach and manufacturing capabilities. This collaboration facilitated the rapid development and distribution of the vaccine and significantly bolstered Moderna's business development efforts.

Embrace Technology and Data

In the digital age, technology and data-driven approaches are indispensable for pharmaceutical startups. Utilizing artificial intelligence (AI), machine learning (ML), and big data analytics can accelerate drug discovery, clinical trials, and personalized medicine. The Drug Discovery Today article underscores the importance of technology and data-driven approaches. The example of Tempus showcases how startups can leverage AI, ML, and data analytics to accelerate drug development and personalized medicine.

Tempus, a technology company focused on transforming personalized patient care, collects and analyzes clinical and molecular data to empower healthcare decisions and has partnered with various companies and research institutions to leverage its data-driven insights. By harnessing technology and data, Tempus has unlocked the potential for more personalized and effective treatments, showcasing how a startup can revolutionize business development in the pharmaceutical sector.

Navigate Regulatory Challenges

Navigating the pharmaceutical industry's complex and highly regulated landscape is a considerable challenge for startups. To succeed, companies must have a comprehensive understanding of regulatory requirements and be proactive in seeking regulatory approvals. Additionally, they should maintain transparency and open communication with regulatory agencies.

The importance of regulatory expertise and perseverance in navigating the highly regulated pharmaceutical industry, as demonstrated by Sarepta Therapeutics, resonates with the Drug Discovery Today article's insights on the necessity of understanding regulatory requirements.

Sarepta has focused on developing therapies for rare genetic diseases, including Duchenne muscular dystrophy (DMD). Despite regulatory hurdles and challenges, their commitment to meeting regulatory requirements and collaborating with patient advocacy groups has resulted in the FDA approval of Elevidys gene therapy to treat DMD in June 2023. Sarepta’s experiences testify to the importance of regulatory expertise and perseverance in business development within the pharmaceutical sector.

Secure Funding and Investment

Pharmaceutical startups often require substantial financial backing to fund research, clinical trials, and product development. Securing funding and investment is a critical aspect of business development. The Drug Discovery Today article's reference to BioNTech's ability to secure funding and valuable partnerships aligns with this point.

BioNTech gained international recognition through its partnership with Pfizer, resulting in the development of the groundbreaking COVID-19 vaccine, Comirnaty. The company's ability to secure funding and forge valuable partnerships demonstrates how investments can accelerate growth and development for pharmaceutical startups.

Expand Global Reach

To thrive in the pharmaceutical sector, startups must look beyond their domestic markets and expand their global reach. Expanding into international markets increases a company's patient pool and opens doors to collaborative opportunities and diverse regulatory landscapes.

An illustrative example is the Israeli startup Teva Pharmaceutical Industries, founded in 1901. Teva has grown into a global pharmaceutical giant with a presence in over 60 countries. Their ability to establish a significant global footprint through mergers and acquisitions, such as acquiring Allergan's generics business, has been crucial to their business development.

Focus on Patient-Centric Innovation

In an era of patient-centric healthcare, pharmaceutical startups must prioritize developing therapies and solutions that improve patient outcomes and experiences. Companies that actively engage with patients and consider their needs in product development can gain a competitive edge.

The Drug Discovery Today article's reference to Butterfly Network emphasizes the significance of patient-centric innovation. Prioritizing the development of therapies that improve patient outcomes and experiences can give pharmaceutical startups a competitive edge in today's healthcare landscape.

Butterfly Network has developed a handheld, pocket-sized ultrasound device that empowers healthcare professionals and patients alike. By prioritizing patient-centric innovation and accessibility, they have created a game-changing product that simplifies medical imaging and puts the power of diagnosis in the hands of healthcare providers and patients.

Pharmaceutical startups can drive their businesses by identifying unmet medical needs, building strong scientific teams, establishing collaborative partnerships, embracing technology and data, navigating regulatory challenges, securing funding and investments, expanding global reach, and focusing on patient-centric innovation.

With the right approach and dedication, pharmaceutical startups can overcome challenges and significantly impact the healthcare industry, ultimately improving patient outcomes and quality of life.