Until just a few years ago, conventional wisdom held that the pharmaceutical industry would continue its trend towards consolidation. The investment premise was that healthcare reform and pricing pressure would lead to fewer, but larger and more vertically-integrated pharma companies. In fact, the opposite is the case. There has been a flowering of small biotechs and start-up pharmcos focused on niche products and rare diseases. In addition to brilliant clinical researchers and experienced program managers, founding partners of these firms often include a savvy deal maker who knows how to leverage initial capital into a portfolio of promising compounds.
Cutting deals with universities and rummaging through the detritus of big pharma labs to build a pipeline is a well-defined process, with the strategy of licensing or merging with big pharma for a conventional but not always amicable exit. What’s different today are digital go-to-market alternatives that allow start-up biotech and pharma companies to consider bringing their products to market themselves as small-but-mighty manufacturers.
Digital channels are a cost-effective way to get reach, frequency and engagement on a national and global level without the huge investment of a large national sales force. A co-promote agreement with big pharma may still make sense, but by bringing their own customer relationship database to the party, start-up pharma leadership may enjoy better leverage in the marketing relationship and even ultimately the valuation.