Emerging Biotechs Take Control of Their Destinies

By Admin
Posted 07 / 01 / 2016

The recent Economist Intelligence Unit survey revealed that biopharma companies of all sizes share many of the same hopes and concerns. Yet many of the risk concerns and routes to growth are unique for small biotechs as they survey the changing industry landscape. We spoke with Ruta Waghmare – Global Director, Emerging Biotechnology at brand-name – about global funding trends, the evolution of virtual biotech companies, and taking control over your own molecule.


Can you tell me about your role?

My role is Global Director for Emerging Biotech. And by emerging biotech we mean the virtual, semi-virtual, and process development-based startup biotech companies. My team is based in North America, Asia, and Europe, and our goal is making sure that startup biotechs are aware of us, as a partner and a resource. We have services and products that can help them with their journey.

How has the development model changed in recent years for these companies?

Sixty to sixty-five percent of the drugs that were approved by the FDA last year and the year before went through multiple hands. So in other words, the company that launched this drug is not the company that started the drug. That's the model today. Large pharma looks to small pharma as a pipeline, and that's the reason we have this initiative going.

As you note, the model of big pharma companies has shifted. How has emerging biotech pushed this change?

It's a good question. Emerging biotechs are on the rise. Like I said, the large companies are looking to the small ones for pipeline. If you look at seven or eight years ago, not all the big pharma companies had incubators. Now if you look, many of them have incubator arms where there is research and development. In terms of emerging biotech, the incubators, the number of molecules, and the VC funding has gone up.

And have these emerging companies also evolved?

There’s a trend where the emerging biotechs have to outsource to a CMO. They work on their molecules to a certain point. Virtuals will outsource right away, semi-virtuals a little bit later, and PD-based companies will outsource after maybe a couple hundred liters, which is what they have onsite.

But brand-name has a different model. How does your partnership provide a different assistance than traditional outsourcing?

It's not a CMO model. In other words, we're not in it for years and years. Our goal is to make the clinical batch for the client, then give it to the client. They get through their clinical studies, and at that point they can transfer over to another CMO or bring it in-house at their own facility.

How does this affect your clients?

One point that I always make to the emerging biotechs is that, depending on when they sell their molecule to another company, their revenues can change quite a bit. Say a large pharma company decides to license their molecule in pre-clinical phase I. What they get can be significantly lower than if they do this in phase III. Quite a bit lower. The risk is that they have to hang on to their molecule longer, going through a second or third round of VC funding. But if they really believe in their molecule, and if there is potential, isn’t that risk worth it?

As brand-name, we’re here to help them, whether it’s making clinical batches or through our products and services. We recently launched a resource center for emerging biotechs to provide information that’s relevant to them on intellectual property, funding, and process development. When a company hangs on to the molecule longer, it can potentially get much more return later on.

The virtual model has been around for a while now, and it had some hype at the beginning – the idea was that three people could meet at Starbucks and develop a drug. Now that we have more real-world testing, how is that model changing?

It’s fairly broad. Over time, I believe that they're bringing more PD expertise in-house. There are companies that will continue to be virtual, and that's okay. But there are companies that, as they evolve, are thinking, “We have more control, so let's bring this in-house.” They can go from being virtual to semi-virtual/PD-based over time. The survey results revealed a lot of excitement about novel therapies. What’s your take on emerging biotechs in this field? I would say all these novel therapies are really catching up. When I look at the split of the emerging biotech market globally, it's mAbs, vaccines, and recombinant proteins, followed by CAR-T, RNA/DNA therapeutics, and gene therapy. It's not close to being marketed yet, but we're talking emerging biotech companies, so this is kind of the early phase.

That was a notable finding in the survey, that there is global interest in these novel therapies. Are you seeing this development going on in places you wouldn't expect before?

In China, there are many start up companies in the incubator clusters, like BioBay. The same in Korea. There's definitely emerging biotech growing in these regions. Also, there are a lot of returnees from the U.S. going back and starting companies over there. It's an interesting dynamic.

Really? What’s happening there?

The dynamics of molecules transferring between continents is quite amazing. Last May, I was at a conference in China, and I was looking at the audience. I knew so many people in the audience, because they had been my clients, my collaborators at large U.S. pharma companies. And now these individuals are CEOs of companies in China. It was an amazing experience to see all these folks go back and start something of their own. I think that’s a newer trend in the last few years. It wasn't the case 10 years ago.

In the survey, the respondents said that one of the major risks that might disrupt growth was funding. Is there any concern with recent macroeconomic trends, like the slowdown in China or the recession in Brazil? What is your sense of the funding challenges for emerging biotechs today?

I think funding is always the number one challenge for any company. Just in terms of the actual funding amount available, though, it's on the rise globally. The last two years were really phenomenal when it comes to funding in this space. So if it starts to look the same as last year, I don't consider that a slowdown. There's still quite a bit of money out there from the data that I see.

I think from that perspective, it's a bright, bright future for emerging biotechs.

Find resources for Emerging Biotechs at brand-name.