Jon Stojan
Leen Kawas, a biotechnology innovator and industry professional, spotlights various challenges that have affected the industry at large this year.
The global biotechnology industry’s technological advancements continue to spur breakthrough products in key sectors. In the medical/healthcare arena, drugs, other therapeutics, and medical devices may help promote improved patient health. Platform technologies, which can be harnessed for multiple purposes, also play a role in the biotech industry’s growth.
For perspective, respected market intelligence firm Precedence Research released an August 2024 report on the global biotechnology market’s scope. In 2023, the aggregate global market was valued at USD 1.38 trillion. In 2024, the global biotech market is estimated at USD 1.55 trillion.
In 2034, the steadily expanding global biotech market is projected to reach a USD 4.61 trillion valuation. This ten-year growth cycle reflects an 11.5 percent compound annual growth rate (or CAGR). For the same period, the United States biotech market is expected to achieve an 11.6 percent CAGR.
The United States’ biotech growth contributes to the North American region’s global market dominance. In addition, an increasing number of North American biotech firms are receiving drug candidate approvals. Clearly, these are positive developments. That said, biotech firms across the country currently face five substantial challenges that could potentially derail their continued success.
Leen Kawas’ Well-Rounded Biotech Industry Achievements
Leen Kawas is Propel Bio Partners’ Managing General Partner. Located in Los Angeles, this biotech-focused venture capital firm provides start-up and early-stage companies with financial, technical, and operations support. Leen Kawas welcomes all founder pitches, although she is especially receptive to outreach from female and minority founders.
Prior to her current role, Leen Kawas served as Athira’s high-achieving Chief Executive Officer (or CEO). While successfully managing several drug development cycles, she became intimately familiar with each phase’s nuances and challenges. Today, Leen Kawas’ diversified biotech experiences equip her to effectively discuss the industry’s complex challenges.
5 Daunting Biotech Industry Challenges
In 2024, the United States aggregate biotech market continues its steady expansion. That said, Leen Kawas noted that companies face five complex challenges that can present obstacles to continued growth. She offered recommendations to help biotechs navigate each hurdle.
Research and Operating Funds Acquisition
At any business stage, a biotech requires a steady stream of capital to fund its research and operations. Venture capital firms, such as Leen Kawas’ Propel Bio Partners, have made increasing biotech investments over the past decade. That said, early-stage biotechs (and others without hard clinical trial data) may find it difficult to obtain the needed funds. Biotechs involved in high-risk ventures may face the same obstacle.
Targeted Solutions
To increase their funding chances, newer biotechs should formulate an impactful value proposition and business case. Forming a seasoned team with diversified expertise is also recommended. Grants and targeted partnerships may also be viable funding sources.
Each biotech must also develop a strategy for managing high research and development costs. Targeted partnerships can facilitate cost-sharing agreements. The biotech can also prioritize projects relative to each one’s potential investment return. Cost-effective technological advancements and operations efficiencies will help improve the firm’s financial position.
Keeping on Pace with Emerging Technologies
The biotech industry’s rapid technological advancements create pressure on biotechs to keep apprised of ongoing developments. This awareness would ideally include the acquisition of the applicable equipment and resources. Newer biotechs would understandably find it difficult to allocate these funds.
Targeted Solutions
Collaborations with research centers and/or academic institutions can help facilitate otherwise cost-prohibitive goal achievement. Making investments in adaptable research frameworks is also recommended. Finally, Leen Kawas emphasized that every biotech should embrace a culture of innovation and continuous learning.
FDA Drug Candidate Approval Roadblocks
The U.S. Food and Drug Administration (or FDA) is the United States’ primary drug candidate regulatory body. On average, the 14-year drug testing and clearance sequence typically costs at least $1 billion per drug compound. For perspective, five of the 5,000 compounds in pre-clinical trials make it to the later development phases. On average, only one receives FDA approval.
During this exhaustive process, the FDA confers with dozens of specialists in an effort to obtain specific drug safety data. And not surprisingly, the FDA often revises its applicable regulations and approval requirements. This would likely force the drug developer’s team to revamp its strategy accordingly.
Targeted Solutions
To remove some of the time-consuming drug development bottlenecks, Leen Kawas urged biotechs to stay apprised of regulatory changes. Initiating collaborative engagements with regulators early in the process may also help. Finally, embracing an adaptive clinical design, and seeking faster approval pathways for breakthrough drugs, could produce positive outcomes.
Cybersecurity and Data Privacy Concerns
The biotechnology industry’s universal digital data usage enables countless clinical trials to take place. Like other statistics-based initiatives, adding more data points drives increasingly accurate results. In a clinical trial, adding more patients helps researchers increase outcomes’ validity. Biotech clinical trial databases typically contain patients’ personal identifiers, medical records, wearable-generated information, and even genetic sequences.
Unfortunately, an expanding patient database means more individuals’ personal identifiers and records are at risk from a data breach. For perspective, the global average cost of each data breach is approximately $4 million. In each case, the affected individuals can unknowingly become the victims of identity theft.
Targeted Solutions
In 2024, regulatory bodies have responded by implementing strict data protection measures. Each applicable biotech must maintain secure servers and stringent access controls. Sensitive data encryption is also required.
Although integrating data protection and privacy protocols is expensive, a biotech’s failure to act opens the door to heavy fines and a compromised reputation. The company will also lose patients’ trust, making it even harder to recruit participants for upcoming clinical trials. To avoid this downward spiral, Leen Kawas recommended that biotechs proactively take steps to protect patients’ important data.
The Ongoing Talent Shortage Problem
Biotechs with sufficient funding, good technological capabilities, and robust data security must still resolve one last piece of the puzzle. Without enough top-tier skilled biotech professionals, companies face diminished odds of success. Specifically, biotechs continue to report difficulty in hiring for highly specialized roles in gene therapy, bioinformatics, and other lesser-known disciplines.
Targeted Solutions
To attract these talented team members, biotechs should create an impactful company mission and culture. Offering competitive pay and benefits packages, and providing professional growth opportunities, is also recommended.
An Atmosphere of Innovation is Key
Finally, Leen Kawas said an innovation-rich environment will help retain valuable team members. Employees should be invited to take risks and learn from their failures. Each biotech should also provide financial and resources support for employees’ research projects. Finally, recognizing (and rewarding) team members’ “out of the box” contributions helps create more organizational alignment and encourages long-term loyalty.