After a record year of biotech investments in 2020 – the industry has invested $28.5 billion across 1,073 deals so far – the market for new innovations remains strong. What’s more, these innovations are growing in the market through startups and/or academics from early stages to their scientific founders. In 2018, for example, U.S. campuses conducted worth $79 billion in sponsored research, much of it thanks to the federal government.
The number spread amid the epidemic, and President Biden’s infrastructural plan, which includes $ 180 billion to boost research and development efforts, could grow further. Since 1996, 14,000 of these universities have received technology licenses, and 67% have been licensed by startups or small companies. Meanwhile, the medieval move from Seed to Series A is now 2 xs – higher than all other stages, suggesting that biotech startups continue to attract investment at an earlier stage.
For biotech startups and their founders, these headwinds promise a lot. However, initial financing is the only part of the long journey that (ideally) ends with the launch of a product. Along the way, founders will need to raise additional investments, develop strategic partnerships and keep competition off. It all starts with protecting the basic assets of a biotech company: its intellectual property. Here are three key considerations for beginners and founders right from the start.
Most early stages of biotechnology start from a university lab. Subsequently, a disclosure was made with the University’s Technology Transfer Office and a patent was filed in the hope that the product could be brought to market (this is, for example, a new start). The licensing agreement is important because it shows investors that companies have gained exclusive access to the technology in question. As a result they help attract the investments needed to grow the organization in their true sense: hiring a team, building strategic partnerships, and conducting additional studies.
This does not mean, however, that the best way to start is to jump right into a completely closed license agreement. An alternative deal is often a good move.