Think : Thermal : Biotech Firms Have Helped Propel Pharma Forward

There is a long and winding road between academic discovery and a drug’s entry into the pharmaceutical pipeline. Transforming research into viable compounds that pharma companies would fund and bring to market is challenging. Academic scientists come up with innovative ideas, but struggle to capture the attention of pharma companies. Biotechs have brought many more drugs to market, but just as many good medicines have yet to reach patients because the scientists lack the business expertise required to run a company.

Today, big pharmaceutical companies, venture capitalists, and a number government agencies work together to accelerate early drug development, but this collaboration is relatively new. Just a few years ago, big pharma faced the crisis of a patent cliff when nearly all the primary care blockbusters went off patent. The largest companies lost billions of dollars to competition from generics, and they scrambled to find new medicines to fill their pipelines.

Realizing such massive innovation could not come from within,companies started tapping biotechs, but those resources quickly dried up as completion for the attention of innovative biotech firms intensified.This increased interest in biotech has been a benefit to the industry, in that Grand View Research predicts the biotech industry will enjoy a compound annual growth rate (CAGR) of 12.3 percent. The interest has also been financially rewarding, as a surplus in funding form venture capatilists has allowed biotech firms to more fully develop drugs or even opt out of pharma takeovers. 

Inability to innovate from within or tap into biotech firms forced pharma to seek new sources of innovative drugs. Some found success by tapping into the innovation engine at a much earlier stage – sometimes while drugs were still in the academic research stage. A number of pharma companies struck up master agreements with scientific centers, but transitioning discoveries into drugs that pharma would be interested in developing was still problematic.

Then incubators entered the picture.

Stay tuned for part two.