In the dynamic and ever-evolving landscape of biotechnology, industry leaders must stay informed of biotech trends and garner industry insights for 2024 and beyond. At the cutting edge of medical innovation, these biotech companies encounter various challenges that test their resilience, creativity and adaptability. Situated at the crossroads of science and commerce, these healthcare pioneers are charged with the critical task of transforming groundbreaking research into viable, life-changing treatments.
With over 15 years of executive-level experience in the healthcare industry, Pezzini’s expertise is shaped by both science and business roles at biotech, pharma and consulting firms. His scientific insight as a biotech engineer, paired with his business insight with a business and leadership degree from Harvard Business School, positions him uniquely to speak on the trials and tribulations faced by biotechs today.
Read on to explore the intricacies of leading a biotech through the eyes of a seasoned executive.
What challenges are biotechs facing today?
Pezzini: Indeed, the scope of challenges faced by biotech companies is quite extensive, and a deep discussion into this topic would be lengthy due to the complexity of the industry. Broadly speaking, development-stage companies, typically driven by a small, entrepreneurial executive team, are focused on delivering innovative therapies to patients. In the past two years, particularly following the COVID-19 pandemic, these companies have navigated many challenges.
My conversations with CEOs and advisory sessions with board members have found that funding is the most pressing concern. The high operational costs of biotech and healthcare innovation demand significant capital. CEOs have struggled to secure funding; those who have, often did so under less-than-ideal circumstances regarding the timing and amount, leading to very high stress. This funding challenge, deepened by increased demand from investors within a risk-conscious environment, puts huge pressure on company leaders, especially when considering the financial well-being of their teams.
How does the biotech industry respond to these challenges?
Pezzini: While I hesitate to sound overly optimistic, I see some positive impact from these challenges. However, the scarcity of funding and the surrounding pressures have caused many companies, some with promising science and innovations, to progress at a slow pace or to stop operations. It’s certainly not a completely positive situation, especially for those who’ve experienced the loss of their enterprise.
However, the difficulty has, in many cases, strengthened these biotech companies. They’ve become more resilient, better equipped and well-prepared for the future. Biotechs are now increasingly taking up a transversal perspective, focusing on their entire development process as well as the market dynamics awaiting their products. They’ve been working diligently to improve their strategic planning, adopting a complete view that combines short-term operational needs with long-term market considerations. This shift has enabled them to present their business and value propositions with greater clarity, positioning them to engage more effectively with investors and partners.
What main stages do biotechs undergo as they are looking to get their products on the market?
Pezzini: Certainly, there are several ways through which one can view the essential stages biotech companies must pass through on their path to market. At Alira Health, where we’ve had the privilege of advising and supporting numerous biotech firms, we’ve come to define the CEO’s and management team’s role into three core activities: planning, fundraising and execution.
The planning phase includes the strategic planning of a product’s journey, the fundraising is a critical phase of securing the necessary capital and execution involves putting these plans into action. These three areas are interdependent and form a triptych that requires skillful attention and integration. I believe that the balance and interconnection of these activities are what empower a biotech to thrive, especially when navigating the difficulties of today’s business environment.
How should biotech leaders approach planning?
Pezzini: Planning, though it might seem mundane to some, is vital for biotech leadership, especially in times when funding may be scarce. Clarity of vision, detailed distribution of resources and a concrete plan for a return on investment are critical to winning investor confidence. Effective planning involves detailing the path from current operations to product commercialization, while also allowing for flexibility to adapt to changing assumptions — each carrying deep financial implications.
Without a robust and adaptable plan, biotech firms may find navigating the complexities of product development and market readiness much more challenging. We have observed that companies that underestimate the importance of careful planning often encounter difficulties, particularly in the recent economic landscape.
What should biotechs know about fundraising challenges today?
Pezzini: Fundraising is a complex task, influenced heavily by the type of innovation being pursued. A solid foundation, based on detailed planning, is crucial for successful fundraising. This doesn’t imply having all the answers but being able to communicate your intended course of action clearly. Simplifying complex biological concepts for potential investors, particularly those without scientific expertise, is challenging but very much needed. The ability to convey the medical value your innovation brings to patients concisely and effectively is key to setting the stage for investment discussions.
Also, fundraising is a long-term endeavor that relies on building and maintaining trust over time within your network. Investors need to see consistency between what you propose and what you deliver, or a well-reasoned explanation for any change in plans. This trust-building is very meaningful in the complex space of biotech.
What advice would you give to a biotech approaching the clinical activities?
Pezzini: Clinical activities are at the heart of a biotech’s execution phase. The design and implementation of clinical trials are of high importance and very capital-intensive. Strategic and operational excellence must be balanced; an imbalance can lead to a less-than-ideal distribution of resources or lost opportunities.
Strategically, it is not just about seeking drug approval but generating evidence to address the questions of various stakeholders, including payers. Operational details, such as patient recruitment and site engagement, are critical. Companies must ensure that trial designs genuinely reflect patient needs and preferences, which now more than ever influence drug adoption and market success.
On the operational side, careful attention to detail in trial design, patient inclusion criteria and recruitment feasibility is important. A clear understanding of the operational landscape and potential challenges is critical for effectively navigating the complexities of clinical trials.
How do you see the outlook of biotechs in the next five to 10 years?
Pezzini: I am optimistic about the future of biotech, despite the large pressures faced in recent years. The resilience of this sector has only been shown by such challenges. The majority of medical and drug innovations anticipated for release in the next decade originate within biotech companies. Despite current struggles, biotech remains the primary driver of innovation in healthcare.
Biotechs have not only endured but have evolved, gaining greater expertise and preparedness. They have an expanded understanding of how their innovations will be used in healthcare upon launch. This, ideally, should result in biotechs capturing greater value. The potential for increased value can show in various ways, depending on each company’s path. Some may reach the stage where they undertake the commercialization of their products, although this path involves considerable evolution and effort. Also, the shift towards personalized medicine, targeting more defined patient populations with precise therapeutic interventions, aligns well with the capabilities of biotech firms.
Even if biotechs choose strategic exits or collaborations with larger pharmaceutical companies, their increased sophistication should help them to retain greater value. Thus, my outlook remains positive, with the belief that the challenges faced by biotechs will be offset by subsequent success and value generation.
From Joris Pezzini’s expert insights, it’s clear that the biotech industry stands at a pivotal juncture. The biotech trends and industry insights for 2023 and beyond suggest a period of both significant challenges and immense opportunities. With resilience and strategic agility, biotech companies are navigating the complexities of innovation, funding and market dynamics.
The insights shared by Pezzini underscore the importance of robust planning, sharp fundraising and meticulous execution as the three pillars that will support biotech firms in their quest to transform pioneering research into groundbreaking treatments.