Kudos to Reid for commenting on my initial post with this question…Reid’s original question: “has the business model changed for small biotechs so that none will grow that large, and their exit strategy is to be purchased by a big firm?”

I think a more interesting question is this:  Is it even possible for a small biotech company to grow into a “big” biotech company in today’s environment?  I suppose “big” could mean “fully integrated,” meaning they have the capacities for discovery/development -> commerical marketing; I will be thinking in those terms…and abbreviating “big” biotech company as FIBCO (fully integrated biotech company).

Some assumptions (feel free to challenge them with comments):  To grow to be a FIBCO a biotech company must get product or products approved for commercial sale to generate enough revenues to support discovery/development costs.  This is probably several hundred million dollars per year in sales.

It is nearly impossible to progress that far with product/products without attracting the attention of a big pharma company that wants to increase future revenue streams (as they are desperate to replace products losing exclusivity).  With a product that projects to earn $100M+ per year in the late stages of development, a biotech company will probably not be able to resist selling out to a buyer (“we’ll all be millionaires!!!”).

Cheers,

Hans

Keep an eye out for some guest blogging in the future, as I know some pretty damn smart people.  I just hope I can convince them to contribute something.