High-risk, high-reward endeavors are intimidating.
The risk frightens most people away, so the rewards find few individuals and organizations. When you consider both the financial rewards and the personal fulfillment of an endeavor, however, the risks become worthwhile and the rewards more deeply satisfying.
The biotech industry is booming with stories of massive success. In 2013, spending by biotech companies on R&D grew at a faster rate than revenue for the first time since the global financial crisis began. What’s more, nearly all of that growth stemmed from 17 U.S.-based companies with annual revenues of more than $500 million.
But money alone isn’t what makes this field so great. Rather, it’s the challenge of piecing together knowledge to work through puzzles that could change lives. Solving these puzzles could mean people live richer lives, loved ones postpone their goodbyes, and trauma victims fully recover faster.
If you look beyond the dollar signs, you can see the healing your solutions bring. However, to find these rewards, you must overcome several common obstacles of the biotech field.
The Hurdles Ahead
Every company that’s made it big has had to overcome substantial barriers. These obstacles exist for almost every biotech entrepreneur, and they include:
1. Side effects. Technology startups might select products that have potential risks or side effects, which the developer won’t know about until later. Health risks or other problems related to the base science can pop up unexpectedly and derail an entire project.
2. Mental pressure. The high chance of failure makes a biotech endeavor feel like walking a tightrope. It doesn’t help that biotech startups have a longer investment and operation cycle than normal companies. For an average company, drug development will take 10 to 15 years from R&D to FDA approval.
Additionally, biotech companies have a separate metric for measuring value because the company can profit from products that are approved to sell on the market. During the long journey of drug development, each milestone is a multiplier to the current evaluated value of the project. It’s like a relay race, with each team member carrying an intangible asset.
3. Initial funding. Startup costs are high with a very long ROI. General tech startups have easy access to the Internet and electronics that allow them to create whatever they want. Entrepreneurs in biotech, however, must have access to labs, research, and specialized employees to get through multiple stages of development and manufacturing.
4. Regulation. Regulation for many new technologies is still in its infancy, so approval may take longer. The FDA regulates all products made by biotech companies, which is a slow and cumbersome process — even if regulations for your particular application already exist.
5. General knowledge. You must have some basic knowledge of the given technology to make critical decisions like path, claim, and indication. Biotech entrepreneurs don’t necessarily have to be scientists, but they do need to know enough about their technology (and all the processes that accompany development and clinical trials) to make their product viable to investors. You must understand how the system works to avoid unnecessary high costs.
6. Timing. You have to understand patent duration and the effective time of comparable intellectual property to ensure that your products are patented and protected. This may lead to more costs for lawyers and licensing.
For example, when you set up a clinical trial, your enrollment site must meet the patient enrollment on time. Otherwise, it slows down progress for all your departments. Biotech entrepreneurs must make the critical decision to set up a backup site and immediately initiate it before that scenario makes too much of a difference.
The road to success in the biotech field is not an easy one. It’s daunting, and the risk of failure is certainly high — but the rewards are incredible. If you jump all the hurdles, you can tap into all areas of knowledge and take on meaningful challenges that can transform lives all over the world.
Kevin Xu is the CEO of MEBO International, a California- and Beijing-based intellectual property management company specializing in applied health systems.