How do small biotechs operate?
There are some common features across biotech, especially early-stage companies. Variables such as the underlying science and the attitudes of leadership can influence the operating model in different ways. There is no one-size-fits-all approach. I am going to share a point of view derived from the startups I have been involved in. Each of these companies has been in the seed or series A stage, focused on developing therapeutics in various modalities - antibodies, gene therapies and small molecules.
The life cycle of a biotech
In this graphic I have tried to capture the most essential and common steps from company inception to major milestones. Companies are formed around innovative ideas, and a well-articulated plan as to how those ideas can be developed and commercialized. Investors provide what we call “risk capital” to fund the buildout of the company and the execution of the plan. The term “risk capital” describes investment capital that is truly high-risk; at this early stage there is no way to be sure that the investors will generate any returns on their investments. Without this risk capital (and some reasonable frequency of success for investors, which generates returns that can be re-invested), our ecosystem cannot function. The activities outlined in red are dynamic. Companies do a significant amount of iteration as they generate data and unravel the problem they have set out to solve.
It is important to note that in reality this process is hardly ever linear. Many companies end up pivoting from one concept to another, as they follow the data they generate along the way. Examples of events that change the roadmap for a company:
Preclinical or clinical science doesn’t work
The biotech market changes perception of your value (up or down) impacting your ability to raise capital (up or down)
New opportunities arise, such as a complementary target or platform, or a new asset that can be acquired
Hopefully at some point companies achieve milestones (or value inflection points). Milestones are often related to achieving certain kinds of proof of concept, production of a viable drug product, or positive data (preclinical or clinical) that increases the value of the company. The biggest milestones are late stage trial readouts, acquisitions, large pharma deals and product approvals. Milestone achievements usually catalyze further investment which supports the continued growth and scaling up of the work to progress to the next stages of development.
What is the day-to-day like?
Biotechs work with a strong overarching sense urgency. It is important to execute research efficiently and to be mindful of time. Resources are limited; the money a company raises will only last a finite amount of time. There are some really critical principles that most companies follow in order to work efficiently and effectively under these circumstances.
Focus: In their strategic plans, companies choose what research they will pursue, what they will spend on this effort and when they intend to deliver data. A really important part of this process is creating clarity about what is in and out of scope. There are often many interesting targets, experiments, and ideas that the team would like to work on. But most of the time, the company has to make choices. As teams embark on their work, it is important that everyone maintains this focus.
Risk taking: This can be hard for a lot of people, but it is really vital. Risk taking can come in many forms, such as trying a new experiment or model that is unproven, streamlining a project to focus on key goals, or making strategic decisions without all of of the desired data in hand. Just like the investors providing risk capital, the teams have to make bets and get comfortable with uncertainty. Risk tolerance is usually guided by management. On the plus side, team members who really think out of the box can thrive in this environment by proposing creative solutions to problems or new directions for research.
Communication: I like to describe this as “flat” - i.e., information has to flow through the company freely, and in real-time, as though there were no organizational “layers”. Information silos can be very problematic. The pace is fast and decisions need to be made very often - this can’t be done without good information sharing and proactive communication.
Flexibility: Priorities, needs and strategic directions can change often. It is important to go with the flow and embrace change as it comes.
On a more practical level, a lot of your time will be spent working in teams, whether that be in the lab, or on a clinical project team, or on a virtual team. Teamwork is the engine of the company. There will be meetings, which should be run efficiently and which should allow for great communication and collaboration. But strong biotechs don’t overburden the team with meetings. Time is money so meetings should be productive.
There is also deep work - planning, analyzing data, troubleshooting problems. This is some of the most important time spent as it often catalyzes progress. I would also say that looking at data and troubleshooting problems can be some of the most fun and exciting times you will spend in a biotech. Nothing gets me more excited than seeing a few people at the whiteboard working something out together.
In some form, reporting on work rolls up to management - ideally in concise reports or meetings, where management can respond to data and make adjustments to strategy. Every company and management team has their own playbook but in general this should be a frequent interaction. When companies are very small, management may be very involved in the company’s day-to-day activities.
What working styles thrive in a small biotech?
There is no specific answer for this but I will say in general that people who are curious, disciplined, creative, humble and collaborative can really do well in small biotechs. You do not have to be extroverted! Often times the people who make the biggest impact are the most quiet and humble. You should be willing to do your best work every single day and put the mission of the company first.