failure are mismanagement and undercapitalization. Accordingly,
biotechnology
companies should secure able investors and ensure that milestones are
consistently met.
Selecting Opportunities and Attracting Funding
In order to attract investors and build a biotechnology company, a
commercial idea must exist with the potential to generate revenues.
Innovative
technologies and ambitious goals may attract press attention and
early investors, but continued success requires profitable commercial
execution.
Consider the case of Genentech. The company quickly completed
proof-of-principle research to demonstrate the power of their
revolutionary
bacterial protein-expression system and signed a development contract
to produce human insulin. After developing a method to produce human
insulin in bacteria, Genentech applied the same basic techniques and
secured external funding to produce human growth hormone. While
Genentech has since diversified into additional research areas, their
initial plan focused on a single, patent protected, new technology
with multiple defined commercial possibilities.
The primary objective of a biotechnology start-up is to secure a
competitive
advantage, followed by assembling a management team and obtaining
funding. At some stage in this process, a business plan will have to
be formulated.
Commercial Strategy
It is not the planning that is important;
it is the planning that
makes you able to change it.
Dwight D. Eisenhower
Business plans often change as a company develops. One of the
objectives
of formulating a business plan is to determine the best course for
implementation. While the initial business plan may be a rudimentary
outline
of a commercial idea, investigations into the feasibility,
applications, and market potential of the idea can lead to
modifications, resulting in a relatively stable concept that
justifies the formation of a company. If an idea has a small market,
requires an extremely large investment, or can only be used as part
of a third party's patented process, then it may be better to sell
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