Monday 7 January 2013

Five strategies for successful commercialisation in biotechnology


Five strategies for successful commercialisation in biotechnology

The rapidly changing biotechnology environment, influenced by globalisation, competition, financial pressures and the advancement of new technologies, has had a dramatic impact on the small to medium biotechnology firm.

Commercialisation is the process of taking an idea and turning it in to a successful outcome in the market, whether it is a product, service, process or organisational system.

The Australian Institute for Commercialisation (AIC), a division of QMI Solutions, 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).

Today, the key factors needed to ensure small to medium biotechnology firms survive the discontinuous change are: entrepreneurship, innovation and collaboration. The following five strategies for successful commercialisation are founded on these the three key factors of success.

1.    Create an entrepreneurial culture

An entrepreneurial culture must be implemented to ensure effective management of the limited expertise, resources and funding that are required to successfully commercialise opportunities. Many small biotechnology firms are often dominated by a research or academic culture that must quickly evolve to become entrepreneurial and commercially focused.

Small to medium biotechnology companies also need to start defining the products and services that will address a market need rather than focusing on the technology itself. Companies that quickly develop the products and services that customers want will have a greater chance of success.

2.    Undertake Early Stage Market Research

Biotechnology companies need to carry out market research early to identify the specific market needs to drive their product and service development strategy.

Firms need to identify a differentiated market niche to ensure that a demand exists for the specific type of product or service. Market research can inform a market driven strategy that allows biotechnology firms to commercialise more effectively and rapidly.

Speed to market of a first generation product for a defined market can allow the biotechnology company to capitalise on the success in an initial market to further fund and develop core technology, which can be migrated to secondary markets with similar customer needs.

3.    Embed innovation across the organisation


To achieve success in today’s environment biotechs should encourage a culture of innovation across the whole organisation, not just within the R&D functions. Innovation should include process innovation, organisational innovation, business model innovation and marketing innovation in addition to product and service innovation.

Biotechnology entrepreneurs need to better understand the business aspects of biotechnology and what is required to ensure successful commercialisation. They also need to think creatively in order to solve complex problems and to differentiate their business model from their competitors. The ability to utilise the intellectual capital of employees by capturing their ideas and encouraging team participation will impact on the firm’s success.

4.    Establish strong alliances and networks

Biotechnology firms also need to establish strong alliances, research collaborations and commercial relationships if they are to be significant players in the biotechnology industry.

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 the technology to a product or service. 

To overcome this chasm small biotechnology firms need to adopt an open innovation mindset that facilitates networking and collaboration in order to access expertise, various channels to market and novel funding options, not just continue to rely on government support and funding.

5.    Identify novel funding and resources


A novel approach to accessing expertise, resources and funding that has successfully been used in biotechnology is the ‘stepping stone’ approach to commercialisation. This approach involves the small biotechnology firm establishing a collaborative strategic alliance with another larger, more 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 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.

In conclusion, in order for a commercialisation strategy to be successful it must be effective, efficient and focus on outcomes as soon as possible. A biotechnology commercialisation strategy, specifically, should focus on creating an entrepreneurial culture in the firm, founded on early stage market research, encourage innovation and creativity across the firm, integrate strong alliances and networks and incorporate novel funding and resources where possible.
 

To find out about the AIC's Commercialisation Masterclass, a one day intensive workshop to assist participants derive full value from their research and development activities, go to www.ausicom.com/events.
For further information call us on 07 3364 0614 or email education@ausicom.com.


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AIC Commercialisation Masterclass - Brisbane - 28th July 2011

This workshop will assist participants to derive full value from their research and is designed for those with an understanding of commercialisation principles.

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