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Selling Biotech

The peculiarities of life science marketing consulting


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Ihor Kendiukhov

3 years ago | 9 min read

The complexity of the biotech market makes it challenging.

In fact, what we mean by biotech is a very motley variety of different industries, which are often loosely coupled and dramatically different in both markets and technologies. This makes biotech marketing consulting non-trivial.

Many traditional marketing methods do not work in the life sciences industry, and others work in unexpected ways.

In this article, I will try to summarize the experiences that have been gathered by Bionity on its way to biotech consulting.

A Motley Market

The number of niches, markets, technologies, technological processes, production chains, and networks in the life science industry is enormous. Unlike conventional markets, it is quite possible here that one or several companies occupy the entire market segment.

In addition, there are a significant number of potential segments where companies do not exist at all. Each of these segments requires very specific skills, and the generalist is often unable to provide consulting services that a particular company needs.

All of this forces consulting firms to face the following facts:

1. There is no single market as such.

2. Each industry should develop its own methodology for assessing business prospects.

3. Marketing business assessment is inextricably linked with scientific assessment, which is always highly specialized.

In such conditions, the consulting firm becomes a kind of intermediary between analysts and businesses.

Despite the fact that it is impossible to develop a single methodology, we can distinguish a number of metrics that are applicable to the assessment of any biotech startup. Of course, the relative importance of each metric will differ depending on the specific industry in question.

We used to apply such metrics of general methodology:

  • Stage of development
  • Competitive index
  • Scalability
  • Technology accessibility
  • Scientific activity
  • Innovation index
  • Technology advantages
  • Statistical risk
  • Complexity of technological implementation
  • Market relevance

But the market segments themselves should be categorized and compared. The following methodology was implemented for this:

Inside the segment, specific companies can be compared:

Such a framework, while as simple as it can be, has made it possible to quite successfully identify industry leaders, potentially promising startups, compare the prospects of different market segments, and find technologies that could take off in the near future.

The simplicity of the framework allowed us to avoid “the curse of dimensionality” and acquire required data relatively easily, although in order to comprehend various specific segments more data categories can be necessary.

However, everything is still not so rosy.

Obstacles on the Way to Marketing Consulting

Although the biotech segments are very different, they are related: the products of one business are resources for another; research in one industry often leads to progress in another. Some industries, such as longevity, require complex interactions from virtually all branches of biotech: bioinformatics, stem cell research, omics, bioengineering, structural and systems biology, biomedicine.

As a result, a paradoxical situation arises: there is practically no competition in biotechnological consulting, but at the same time it is very difficult to enter the market.

A single company is practically unable to acquire sufficient competencies to operate in the market as a whole.

In other words, we are faced with the problem of scale: it is quite easy to find several startups or investment funds that need consulting or analytical services in very niche areas. It is much more difficult to go beyond these niches and use the acquired competencies in other industries. There is essentially no other way since the customer base in each specific niche is very limited.

This leads to the fact that biotech startups often find it more profitable to simply hire independent analysts specializing in the issue of interest to them, without using intermediaries. Of course, this solution has transaction costs, and biotechnological consulting services become relevant when these costs are too high.

In addition, problems arise at the level of startup strategies. The point is that, just as many biotechnology problems require multiple solutions, many biotechnology solutions are applicable to multiple problems. Often, a startup develops a particular product for a specific need, completely oblivious to the fact that it can be applied in other areas. When such an opportunity is discovered in the course of market and technology analysis, startups are usually reluctant to implement it.

The following problems also remain relevant:
1. Restrictions due to the fact that R&D features are often confidential.
2. Lack of specialized expertise in fundamental science.
3. Very long periods of product development, which can last for decades, which does not often allow an adequate assessment of business prospects.

It leads us to the acknowledgment of the role of tech in biotech.

Technology Is Almost Everything

In biotech, there is more tech than in tech itself.

Many traditional issues and aspects of marketing, such as ergonomics, user-friendliness, quality, efficiency, profitability, rest on R&D. Biotechnology consulting consists almost entirely of R&D analysis. The situation is aggravated by the fact that most startups are only at the stage of product development.

At the same time, the variety of technologies and methods makes it reasonable to use intensive rather than extensive R&D. What I mean by this is that it is often more efficient to develop an entirely new method or to take it from outside, rather than to perfect an old one. This is often the result of biotech consulting.

The focus on technology also means that the promotion of biotech products is almost completely reduced to communication with scientists and engineers, and one of the tasks of biotech consulting is to be a platform for such promotion, wisely choosing the criteria that are guided by corporate scientists.

At the same time, we must understand that many sectors of biotech are very young or even in their infancy. They are just emerging from the academic environment. Accordingly, startups in them work more like laboratories than as commercial projects. And they need help in refocusing on commerce.

Of course, biotech will always remain knowledge-intensive. But as the transfer of ideas and products from academia to business is carried out, the role of non-scientific aspects of start-up development will increase. There is more than tech in biotech.

That is the situation now. But what can we expect in the future?

Trends

The trends that we see in the industry inspire cautious optimism regarding the development of biotech consulting. Let’s list the most important of them. Please note that I focus on those trends which are first and foremost relevant for the consulting development.

Biotech is going B2C

Traditionally biotech has been a B2B industry. Yet it is going to change.

More and more biotech industries are targeting end-users. This can include genetic and epigenetic sequencing, various segments of neurotech, biomedical devices, and of course pharmaceuticals. The whole field of biotech products for DIY labs and projects aimed at retail customers is emerging.

It means: biotech must become user-friendly. The role of promotion and advertisement will increase.

Digitalization

As biotech products are becoming IT products, the whole set of instruments developed for the later will work for the former. The line between biotech and software companies is blurring.

With digitalization comes exponentialization as well. It means the explosive growth of the segments which manage to integrate themselves with IT. Naturally, this will create vast new horizons for biotechnological consulting.

AI

As soon as biotechnologies are digitalized, the methods of data science and artificial intelligence can be applied to them. This already happens broadly in drug development, biomarker identification, neurotech, and longevity. The startups will search for new ways to integrate AI in their product development process. Intermediaries assisting in these attempts will emerge.

Democratization

Biotechnology is becoming available at the small enterprise level. You no longer need to attract multimillion-dollar investments in order to engage in biotech R&D. The costs of the establishment of a genetic engineering lab are already no more than 5000 US dollars.

This will mean that a dynamic culture of garage IT projects will come to biotech, and small student groups will be able to implement their own business ideas. A swarm of small biotech startups awaits us.

Emergence of new segments

This is not new at all: new segments in biotech are constantly emerging. But the speed at which this happens is increasing.

In the near future, we will see the emergence of industries such as neurotech for entertainment, preventive longevity, epigenetic sequencing, consumer organism development.

Pharma startups development

The declining R&D efficiency of pharma companies is forcing them to outsource R&D to startups. This creates a very specific business model based on cooperation agreements and joint ventures with large corporations.

Supply chains diversification

Supply chains are becoming more complicated as technologies advance. It will be more and more difficult and more important for startups to find their place in an extensive network of biotech products.

Geographical diversification

Entire regions are connecting to the market. Developing countries are gaining a competitive edge over traditional biotech centers thanks to a favorable legal environment. We are waiting for the emergence of regional hubs in genetic engineering or stem cell medicine, which will create their own demand for analytical services.

Analytics and Consulting Should Keep Up

As the life science industry changes, biotech consulting will also transform.

Already, a number of directions are being identified as to how this will happen.

  1. The transition of biotech to B2C makes the market democratic, new data sources for analytical companies appear. Methods for working with this data have long been familiar in other areas, such as social media, mobile applications, retail marketing. The winners will be those companies that will be able to be the first to discover the use of these methods. It means in particular the application of artificial intelligence to the processing of biotech marketing and technology data.
  2. The trend of multidisciplinarity in biotech requires analytical companies to apply approaches and methods from other fields, in particular, the growing role of IT cannot be ignored. As soon as biotech and IT converge, we will need more IT consulting in the life sciences.
  3. The democratization of the biotech market will lead to the creation of online biotech platforms on which startups will compete for the attention of investors, potential partners, etc. Analyst companies should utilize such platforms.
  4. Biotech consulting and analytics companies will unite in networks and platforms to meet the needs of the analysis of scientifically complex product development processes and supply chains in biotech.

Consulting agencies that move in accordance with biotech market trends will likely succeed.

On the other hand, analytics companies are themselves able to influence the features of biotech startups. For example, the development of machine learning technologies, the opening of many scientific databases, as well as the information about clinical trials, creates the preconditions for the creation of full-fledged recommendation systems, both at the level of scientific research and at the level of doing business. The use of big data is creating an ever-increasing competitive advantage. Analytics companies may become powerful providers of such recommendation systems for emerging biotech startups. It may increase the speed and efficiency of the R&D process essentially.

Going Ahead

The practice has shown that the best way to develop biotech consulting is to start with a few specific seeds where the team has a competitive edge and significant knowledge, and then gradually expand their services to the entire market. Full coverage of the entire biotech industry is still not possible, and outsourcing will always play a big role.
One way or another, the biotech consulting market remains a blue ocean.

Perhaps it is too empty and deep. There is practically no competition on it — but this is more a minus than a plus because the presence of companies that would focus on other segments and technologies would only play a positive role: only a network of relatively deeply specialized companies is able to cover the entire market, but for this, they are necessary to integrate into a common infrastructure that will encourage the exchange of data, findings, and practices.

We need more biotech consulting!


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