How to Start a BioTech Startup: The Ultimate Guide

start a biotech startup

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The hardest part of any startup venture is taking the first step. But if you’ve got a guide on how to start a biotech startup like this, then it’ll only get easier from here. In fact, we already have an article on how to build a biotech startup that we highly suggest you read, too. 

If you aspire to be included in the list of successful biotech startups, then grab your note-taking tools, and let’s get started.

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Starting in Biotech

Getting your startup inside the $627.63 billion-worth biotech industry will be no easy feat but having a solid foundation should help you and your biotech startup withstand the pressure of the competition quite well. 

Knowledge about preclinical drug development, patents, cost of research, and company structure is fundamental to your biotech startup. Let’s have a closer look at all these components. 

 

Introduction to Preclinical Drug Development

Preclinical, as the term implies, means that the tasks need to be carried out before the actual clinical trials on both animals and humans commence. It can be said that if you fail to plan the preclinical preparations, then you might not be able to move forward to the next steps in building your biotech startup. 

There are four core steps in the process of preclinical drug development.

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1. Target identification.

What will be the target molecule or biological component of your drug?

2. Mechanism determination.

How does your drug work? How will it be absorbed, distributed, metabolized, and excreted by the body? Here’s where you should dive deeper into pharmacokinetics.

3. Efficacy evaluation.

After determining the drug’s movement inside the body, the next thing to zero in on is the efficacy of the drug. How will you carry the evaluation once you’re given the go signal? This is when you should come up with a well-studied experimental design for the clinical trials.

4. Commercial viability assessment.

Besides the drug’s safety, efficacy, and mode of administration, you should also provide an initial assessment of its performance in the market. What would be your selling price, estimated profit margin, and competition score? 

Of course, there’s so much science going on in each of the steps in preclinical drug development. This is why it’s critical for you to secure funding based on your team’s current skill set and available resources. A complete laboratory is very conducive to increasing the productivity of scientific professionals. 

Life Science Patents

Like filing a US patent for a utility, design, or plant, outputs in the field of life science are also worth intellectual property protection. Such life science patents include drugs, bioresearch tools, and medical devices, to name a few.

Cost of Science

Research costs a lot of money. Technology businesses allot anywhere between 3.5 to 7 percent of their revenues to research and development (RnD). This might not seem like a lot to some. But for startup companies, this number is already a significant portion of their budget. So, if nothing comes out of the RnD, that would be a pitiful waste of money.

This is why you have to plan the preclinical drug development process carefully. Expect re-runs of the trials, changes in formulations, and other laboratory needs to fund on top of the capital outlay. This could use up more than half of the funding you’ve secured to start your biotech company. 

Applying for life science patents will also cost you money, so you’ll also need to set aside a budget for this step. We highly recommend that you read about what pre-seed and series funding are for you to have a better idea of what to expect. These can help you get more resources to keep your biotech startup afloat until you have a drug to introduce to the market. 

Company Structure

Some tech startups can run and develop a minimum viable product with a small team of five members. But biotech startups tend to have more members, with scientific learners comprising a specific subgroup in the team, along with other professionals from different fields that perform definite functions in the company. 

  1. Chief Executive Officer. Handles the overall operations of the biotech startup. 
  2. Operations and Management Team. Includes the human resources, accounting, logistics, marketing, and other administrative personnel. 
  3. Project Management Team. Creates the timeline, ensures that everything’s running on schedule, and prepares contingency plans for unforeseen events during the project execution.
  4. Regulations and External Affairs Team. In charge of filing patents, applications to the US Food and Drug Administration, and other external requirements for drug development. 
  5. Scientific Learners. Researchers and other scientific professionals are directly involved in the development process. This incudes, but is not limited to, laboratory aides and assistants, associates, and head researchers.

 

Clinical Trials and Regulations

The US FDA has a collection of regulations on good clinical practice and clinical trials. These materials are both useful in starting and building your biotech startup, especially when it comes to your FDA applications.

A good rule of thumb is to at least skim through the available materials before focusing on the specific readings that apply to your application. It’s better to know about how things work first than to waste your time, effort, and resources filing an incorrect submission. 

Drug Regulation

Apart from the FDA, there are other regulatory agencies that pay close attention to the development, approval, manufacturing, and marketing of drugs available to the general public today. These are the European Medicines Agency (EMA) and the Japanese Pharmaceutical and Medical Devices Agency (PMDA).

Each drug type, medical device, or any other product that could have a significant effect on the health of the general public may have a different set of regulations that developers should follow. Failure to do so will prompt the FDA, EMA, PMDA, or other local regulatory agencies to discontinue the processing of the drug in question. 

Investigational New Drug Application

Proponents or clinical study sponsors of an IND or an investigational new drug should seek authorization from the FDA to collect information from human clinical trials. As the name implies, this new drug is still under investigation. This suggests that its efficacy and potential risks are yet to be proven and validated for further use.

INDs can be categorized based on purpose: research or commercialization. Regardless of which category you want to apply your IND for, you’ll need to provide the following information for your submission:

  • Animal pharmacology and toxicology studies
  • Manufacturing information
  • Clinical protocols and investigator information

The FDA offers a pre-investigational new drug application consultation program for this. We highly recommend that you check that out for more guidance about IND applications.

Clinical Research Phase Studies

All clinical research studies start from small-scale Phase 1 studies. Depending on the development of the drug and the results of its clinical trials, research can still expand up to large-scale Phase 3 and 4 studies. 

Below is a summary of all necessary information related to the different phases of clinical research:

The FDA review team consists of professionals from different relevant disciplines to make sure that the drugs in each phase are thoroughly screened.

 

You Might Ask

How much does it cost to start a biotech company?

One can start a biotech company with $100k, with the help of contract research organizations or CROs. Some low-cost CROs can already provide the equipment and the professionals to do the scientific work required for drug development at affordable rates. This significantly reduces the equipment outlay and operational costs for your biotech company. 

How hard is it to start a biotech company?

It is quite difficult to start a biotech company, even if you have enough capital and the right scientific connections, like CROs. But it’s not impossible. In fact, startup companies such as Cellarity and Kriya Therapeutics are just some recent examples of revolutionary startups in the biotech industry.

Do you need a degree to start a biotech company?

No, you do not need a degree to start a biotech company. But, you’ll want to hire people in your team who know the science behind the viable idea that you want to pursue. 

 

Conclusion

Biotechnology is a broad field of science that involves biological elements and their subunits that can be used for practical applications in our daily lives. It can be a little intimidating at first, but entering the biotech industry is just as possible as entering any other industry today.

Before you start, you must have a realistic idea of what your biotech startup can contribute to society. It’s going to be a lot more difficult to power through the drug development process since most biotech products are regulated by different agencies. 

But if the solution that you want to offer is something that the world needs, then the chances are high that every step will be worth it. It’s now or never!

Related Articles

Series A, B, C Funding: How Seed Funding Works (For Noobs)

Do you have a minimum viable product (MVP) ready for ???? launch? If you do, then your next step would be to look for investors to fund it. Often, MVPs do not make it to the market because of the lack of funding. No matter how much potential your product or service has. Don’t be complacent as a startup. Be proactive in searching for investors. The earlier you can secure capital to fund your business, the faster you can propel your MVP to success.

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