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Current trends and opportunities in the biotech sector

The innovative and disruptive biotech sector is now an integral part of the pharmaceutical industry. Rapid growth within start-ups and smaller companies brings challenges to biotechs but also many opportunities for further growth and development.

By focusing on innovation, investment and planning for the future, biotech companies can capitalize on trends and turn challenges into new opportunities. In this blog, Dean McAlister, Executive Vice President at Inizio Biotech, explores the current trends in the biotech sector and how companies can use these to create new opportunities.

Fueling the future of innovation

With an estimated 70% of FDA approvals for new treatments coming from small companies in 2022, emerging biotechs are now responsible for approximately 77% of all clinical assets in development, making them a leading source of innovation within the pharmaceutical industry1. The biotech innovation engine presents an attractive acquisition target, with big pharma companies seeking to purchase start-ups and smaller biotechs that have established a market foothold with innovative products.

By continuing to disrupt with their innovative products, biotechs not only ensure company and sector growth but also fuel future developments in the wider pharmaceutical industry.

Delivering on current investments

Due to wider economic issues, the entire life sciences sector is seeing a downturn in the levels of new investments. Previously, biotech companies could receive investment if they had an idea for a product, even before entering into development and clinical trials. Now, biotechs are seeing fewer new investments as there is more caution about how money is being spent. The continuing economic pressures could also potentially lead to a complete market reset.

Less investment in new products can be turned into an opportunity for biotech companies by focusing on existing investments and delivering on investor expectations. In the challenging economic landscape, investors are looking to mitigate risk as much as possible. Biotechs that therefore meet, or even exceed, expectations are a smart choice for investors in the future. In the case of a market reset, biotech companies can stand out by delivering on expectations and ensuring they are in a strong position when investment begins again.

An example of an area that is seeing a lot of innovation, and continued investment despite the challenging landscape, is chronic diseases, including metabolic disorders and obesity. Progress is being made by focusing on internal efforts and partnerships with other biotechs, which is increasing external investment and acquisitions from big pharma.

Standing out and planning for the future

Companies that distinguish themselves from other biotechs can improve their visibility to partner organizations, potential investors and big pharma companies looking to acquire. Developing the story of the biotech is critical for companies interested in standing out from the crowd.

Developing a unique story, or an ongoing narrative, is an opportunity for biotechs with a strong scientific pedigree to go beyond facts and figures and communicate what makes the company and the product special. Having strong clinical data is a good starting point, and external partners can provide support to biotechs that are more comfortable with science than storytelling.

For biotechs looking for external investment, phase II clinical trials are important for maximizing the value of an asset. The phase II stage of development shows that the biotech is progressing and generating evidence that has an impact on population health, strengthening the product and company narrative.

A key question biotechs can ask when moving forward is, what headlines do we want to see about the company in the future? By starting with an end goal and working backward, biotechs can develop an investment plan and maximize the value of the company. The different perspectives brought by external experts can also be of great value to biotechs when planning for the future.

To learn more about the current trends, challenges and opportunities within the biotech sector, listen to the recent Trending Health podcast by Vynamic, with special guest Dean McAlister, Executive Vice President at Inizio Biotech.