Tuesday 18 January 2011

Successful Commercialisation of Biotechnology

Successful Commercialisation of Biotechnology

The rapidly changing biotechnology environment, influenced by globalization, competition, financial pressures and the advancement of new technologies has impacted on the small to medium biotechnology firm.

Entrepreneurship and innovation, in addition to collaboration, are the key factors that are needed to ensure emerging and small to medium biotechnology firms survive the discontinuous change.

In today�s environment innovation across the whole organisation is required to achieve success not just within the R&D functions. Biotechnology entrepreneurs need to better understand the business aspects of biotechnology and what is required to ensure successful commercialisation. They also need to be able to think creatively in order to solve complex problems and to differentiate the business model from their competitors.

Commercialisation is broadly defined as the process of taking an idea to a successful outcome in the market, whether it is a product, service, process or organisational system. The Australian Institute for Commercialisation (AIC) believes that commercialisation should also include knowledge diffusion, consulting services and contract research rather than just the linear transfer of technology or intellectual property (IP).

Biotechnology firms also need to establish strong alliances, research collaborations and commercial relationships if they are to be a significant player in the biotechnology space. One of the impediments to converting biotechnology opportunities into tangible outcomes is the �commercialisation chasm� that divides the early stage �proof of concept� from the latter stage translation of a product or service. To overcome this chasm small biotechnology firms need to network and collaborate in order to access expertise, technology and novel funding options; not just continue to rely on government support and funding.

A novel approach to accessing expertise, resources and funding that has been successfully used in biotechnology is to use a �stepping stone� approach to commercialisation. The approach involves the small biotechnology firm establishing a collaborative strategic alliance with another larger, established organisation or institution to co-develop the technology.

The technology is essentially �incubated� in the other organisation where expertise, resources and funding can be applied to fast-track the development of the product or service. The small biotechnology firm will need to offer the other organisation either an equity contribution or a percentage share (royalty) of the revenue generated by the product or service. The terms of the arrangement will need to be established during the preparation of the collaborative agreement prior to forming the strategic alliance.

The small biotechnology firm is exposed to a number of challenges impacting on its survival and sustainability. Therefore, the biotechnology entrepreneur must consider novel approaches to accessing the limited expertise, resources and funding available in order to successfully commercilise opportunities. Innovation through creativity and novel approaches to collaboration are key factors that can ensure the success of the small biotechnology firm. 

Dr John Kapeleris
Deputy CEO, Australian Institute for Commercialisation

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