Building a Fully Integrated Biotech Company: What does it take? Part I
Laura Randa, a seasoned health care and life sciences healthcare executive with three decades of experience and her daughter, Lauren King, an associate at Springboard Enterprises share their advice about the road to commercialization.
Making the transition from an R&D company to a fully integrated commercial organization is no small feat and is a make-or-break scenario for any biotech company.
Regulatory approval doesn’t guarantee a successful transformation — it also requires strategic focus and an organization capable of delivering on that ambition.
Over the last 10 years, the commercialization landscape has changed drastically. With roughly 70 percent of product launches failing to meet their predicted forecasts, it’s obvious that regulatory approvals generated from high-quality and innovatively marketed products alone don’t guarantee a successful bridge into commercialization.
Organizations must consider that payers won’t pay for a product that doesn’t deliver value, prescribers won’t write a drug that doesn’t bring differentiation, and patients won’t take a drug they can’t afford.
Planning and executing a product launch is a complex process that must be tailored to both the product and the market. Success requires strategic focus, cross-functional alignment, and an organizational framework capable of effective delivery.
So, what do organizations need to think about when making the launch to commercialization?
- LONG-TERM ORGANIZATIONAL STRATEGY IS ESSENTIAL TO LONG-TERM ORGANIZATIONAL SUCCESS. Without a clear and aligned organizational strategy, the road to commercialization will be bumpy. It’s common for leaders to underestimate the value of setting an organizational strategy and securing cross-functional alignment early on, but focusing only on near-term goals can lead to failed product launches that prevent patients from accessing better treatment options and cost companies time, money, and talent. It is difficult to get somewhere if you don’t know where you are going. It is similarly challenging for employees to work toward a goal that doesn’t exist or is unclear. Leadership needs to communicate the organizational vision clearly and agree on goals such as target product profile, indications, geographies, etc. by asking clarifying questions, such as: Is the plan to take the product to market or sell the asset? Will the organization be first in class, a leader, or a follower? Will the product be a disruptive one? Is there a partnership in the future? Do not underestimate the time it takes to get these big-ticket topics ironed out — especially for a smaller organization that is new to commercialization. After aligning on goals, you can then focus on strategy and infrastructure. If the plan is to build a fully integrated commercial capability, you need to define by function the required fixed resources (FTEs required for marketing, sales, market access, business analytics, advocacy, medical affairs, etc.) and the variable cost (third-party vendor support, data, systems, etc.). This allows you to budget appropriately early on, so that there isn’t such a shake-up when the time comes.
- UNDERSTAND YOUR INTERNAL CAPABILITIES AND WHAT YOUR GAPS ARE. Organizational structure is key to success in the commercial market, so it’s important to assess gaps early on. Most organizations are founded by scientists/researchers with little, if any, commercial understanding. Building the correct management team is the first and most critical step in organizational rebalancing. Adding new management can be disruptive, especially when you hire new functions and executives from other industries. However, it’s important to strike a balance. Don’t overemphasize the candidates’ specific experiences and underestimate the importance of cultural fit. Making the shift from evaluating clinical progress to commercial and operational discussions really affects the culture of an organization, so it’s important to be radically transparent and avoid silos from the start. It’s also important to coordinate your hiring strategy. Consider whether building an entire commercial organization internally or using vendors and technologies for some roles fits better with your overall strategy. For small organizations that don’t have a commercial budget, it’s important to focus on areas that will bring the most value, like a good marketing group and a strong payor expert. Looking at your organization with a view to commercializing and assessing where future gaps and pain points will be allows better hiring decisions. It may be valuable for an organization to hire leadership first and outsource the next level during the launch. Eighteen months post-launch, you can reset and decide to hire people as full-time employees. Remember, it’s going to “take a village” to navigate this long road — surrounding yourself with smart people can save you a lot of money.
Making the shift into commercialization is one of the most difficult pieces of organizational growth. A clear strategy with data-driven decisions paves the path to a successful product approval. In this fast-paced world, taking time to slow down and evaluate all the variables involved in commercialization is the difference between entering the market strong or floundering. It really comes down to being ready through strategy and preparations, executing your plans, and going the distance.
Transitioning a R & D company to a fully integrated biotech company (FIBCO) entails a number of risks and opportunities. With the right commercialization strategy, you can build a high-growth revenue company and bring innovation to patients. Tune in next week for more suggestions on “how” to make this happen!
Laura Randa is a seasoned health care and life sciences healthcare executive with three decades of experience building high-performing teams and leading commercial markets across the supply chain. Throughout her career in senior executive roles, she has provided corporate leadership, executed successful turnarounds, and held responsibility for multi-billion-dollar P&L’s. She has successfully led teams of up to 250 people through product launches to maximize returns, with a focus on driving a fast trajectory to peak sales. Her diverse experience includes large biopharmaceuticals, biotech, managed care, government, specialty and retail pharmacy, hospital systems, public policy, healthcare services, and consulting.
Lauren King is a summer associate at Springboard Enterprises and is a rising sophomore at the University of Michigan. She hopes to study business administration with a concentration in marketing and sustainability. On campus, Lauren serves as a mentor to the incoming freshmen business students in the Ross Peer Mentor Program and has been recognized as a high achieving member of the Michigan Marketing and Advertising Club. Her skills in organization and problem solving have developed her interests in environmental science, computer coding, data interpretation, and writing.