30 October 2018 - Events
Life sciences research can translate into solutions, products and companies that provide significant benefit to both society and the economy. Today’s dynamic ecosystem presents tremendous opportunities for life sciences innovators given technological advances and rapidly changing market realities. Although the environment for commercialisation has changed dramatically over the last few decades, the basic principles of making it a success remain the same.
A commercialisation plan enables innovators to set out and communicate their strategy to others. It should offer a clear and concise overview of the technology’s market potential and the planned route to commercialisation. It should also illustrate how the team will generate revenue, and the current and anticipated landscape and resources required to address the opportunity enabled by the innovation.
Although each commercialisation plan is as unique as the technology it describes, there are five key elements that must be considered in any plan and aligned with funders’, partners’ or investors’ expectations.
Science – the easy part?
Most innovators are passionate about their technology, having lived with it for quite some time. While it is crucial to demonstrate proof-of-concept data and generate interest in the underpinning science, the readers are looking for evidence that the technology could address a real unmet need of economic and/or clinical significance, as the market simply won’t accept marginal improvements or another me-too product. In addition, determining that the technology is patentable is not enough. Innovators need to verify that once patented there is freedom to operate in the market. In cases where licenses from other patent holders are required, it is important to ensure that these are secured or available on favourable economic terms.
Market pull ≠ technology push
An exciting technology does not necessarily translate into a commercial opportunity – validated customer need should be the primary driver. Rather than hypothesising the need, innovators should seek out and engage end-users to understand where and how the technology fits into the market.
Furthermore, innovators are expected to be well informed about the competitive environment, making a clear case as to why their technology is better than what is already available and that there is a demand for the benefit. It is also worth indicating how long the competitive advantage can be maintained given the patent status and other anticipated trends in the market.
It’s all about the people and networks
It may be a cliché but it is true that investors often bet on the jockey, not the horse. Any proposed management team should have a shared vision and a balanced skill set necessary to execute the plan. The team also needs to adopt an open mind-set that facilitates networking and collaboration in order to access expertise, various channels to market and novel funding options. A company with well-respected KOLs and strong mentors will find it easier to raise money than those with none.
Knowing the numbers
Raising funds is a challenging and time-consuming task. Investors will want to know how much capital is needed, the timing of infusions and how the money will be used. Even if there is a strategic partner with deep pockets or when applying for grants, all costs must be justified. Innovators should be prepared to defend the figures and any underlying assumptions used in any financial projections. A well-respected CFO/mentor will be worth their weight in gold in this respect. Significant efforts are therefore required before approaching a partner or investor – don’t wait until the due diligence process to answer tough questions. Once the money is raised, the focus should be on delivering that first milestone or product opportunity.
Thinking long-term – a strategy for growth
The strategy for growth is the essence of a commercialisation plan and should be based on realistic milestones and timelines. Innovators need to have a clear idea of how the products will be manufactured, tested and marketed, as well as the risks associated with the commercialisation and how these can be mitigated. Each campaign should be geared toward achieving long-term objectives, bearing in mind that the life sciences landscape may look very different from what it is today depending on market, regulatory, reimbursement and policy changes.
Remember that a commercialisation plan is not a scientific paper – it is not written in stone and it will continue to evolve. The plan not only will be a valuable tool in securing funds and strategic partnerships, it can be used to attract talents and serve as an internal roadmap for growth. Any innovation worthy of funding needs a well thought out commercialisation plan, which then lays the groundwork and sets the context in which to conduct business planning.