Building Biotech Businesses - Lesson 7: From Proof of Concept to Production

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Please make sure you download the workbook for this masterclass before beginning the lessons.
Immerse yourself in the wisdom of accomplished entrepreneurs who have conquered global markets out of Switzerland. The first masterclass, Building Biotech Businesses, is useful for anyone in biotech or life sciences, for students and entrepreneurs already active in these fields, and anyone with an interest in building a successful biotech company. The host of this masterclass is Ulf Grawunder, a highly successful biotech entrepreneur.
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Lesson 7: From Proof of Concept to Production
Very few companies have been able to go through the whole value chain of drug development themselves. Biotech startups in Switzerland normally don’t produce and distribute their drug product. Startup companies normally develop a drug to a certain inflection point, which means, a technology platform has to be validated that it can be deployed, that it can work, that you can license the technology to a pharma partner.
The sale of NBE-Therapeutics to Boehringer Ingelheim marked the step from theory to commercialization in Ulf’s case. Several catalysts paved the way to that sale. First, there was early outside validation of the technology platform. A company licensed access to their technology for $20 million, which allowed NBE to operate for a while without additional fundraising rounds. More importantly, this validation gave a strong signal to the market that this technology was real.
“Someone paying money, either a license fee or an acquisition of a product for your innovation, provides an external validation that you have a commercially valuable asset.”
A second catalyst was that another deal happened in the antibody-drug conjugate field that many companies looked at. A competitor of NBE-Therapeutics developed a product exactly against the same target, and a pharma company bought them for $2.3 billion. The feeling in the market was,
“Wow, there’s a big pharma company that invests a lot of money into going after that target, and NBE-Therapeutics is also going after that target, and it’s pretty much in the same stage of development.”
All of the sudden, Ulf found himself in the focus of attention of big pharma companies that had rejected them many times before. One additional learning for Ulf was that you shouldn’t be too secretive about the innovation and where you stand in the development process. If nobody knows about what you’re working on and you don’t get the validation to be invited to conferences to present this to a broader audience, you will not raise the attention of pharma companies or bigger stakeholders in the industry. Ulf therefore publishes one paper per year in a peer-reviewed journal so that the community can see what they are up to.
A third catalyst was that NBE could prove their solution could be rolled out at scale.
“Prepare the company for manufacturing of the drug in a way that it can be directly taken commercial. This is an incredible value for pharma companies that they don’t need to reinvent the manufacturing process.”
To show that a technology can be scaled up, startups work with contract development manufacturing organizations (CDMOs) and in some aspects also with contract research organizations (CROs), where a lot of the work is done under high-quality standards. A large part of Ulf’s work was to scout for the right contractors, and he ended up choosing WuXi Biologics in China, one of the household names in the industry.
Highlights of this lesson:
- Few startups take a drug all the way to the market. This usually happens only after a big pharma company has bought the startup.
- Startups should validate a technology platform so it can be licensed. Get clinical validation as quickly as you can.
- An outside validation of your concept is important, such as other companies using your technology platform.
- Having prepared a product for market entry together with a contract manufacturer makes your company more attractive.
- Don’t be too secretive about your innovation. Talking about it spreads the word, also to investors and pharma companies that might buy your company.
Ask yourself:
- Where could you get outside validation from an established big name in the industry?
- Are you on track to get clinical validation as soon as possible?
- Are you visible enough in the industry, do they know what you are working on?
- Can you prove that your technology can be taken commercial relatively easily, for instance, by working with an industry leader in drug manufacturing with the necessary scale?
This masterclass is made possible with the support of the Gebert-Rüf Stiftung.
Concept and production: 8GR8 Films | Manuel Stagars 2024.