The Challenge

Biotech companies are now at the forefront of innovation in the search for new cures and hope for patients – they are responsible for ~70% of global clinical trials (of which 42% are in partnership) and for the development of nearly half of 2018 FDA approved medicines. However, they face significant challenges related to navigating the business life cycle, including securing IP, managing R&D, raising funds (including IPO), launching product/portfolio and expanding geographically. Next generation therapies (such as gene and cell therapies) also add another layer of complexity in managing regulatory, supply chain and patient journey.

Geographical expansion into Europe

Typically, Biotech companies focus their limited resources on the US market or their market of origin. A critical first step for global expansion is market entry in Europe, which accounts for over 20% of the global pharmaceutical market. Europe is however a complex market with distinct healthcare systems and reimbursement processes at the individual country level. Thriving in such an intricate environment means going beyond traditional thinking on geographical expansion and requires a clear understanding of the unique requirements from a development, manufacturing, distribution, commercial and operational perspective.

‘ACE framework’ – a three-step game plan

Based on our experience helping biotech companies navigate geographical expansion, we have defined three steps to effectively:

• Assess potential: Agree on the guiding principles for the European business, and assess the commercial opportunity, route-to-market options and associated costs across the European markets
• Consider options: Select the most appropriate go-to-market options using a set of strategic criteria (e.g. investment required, time to value, complexity to manage, resources required), align on the priority factor(s) for decision-making and define the cut-off points for a go/no-go decision
• Establish presence: Choose the best route to successfully establish presence in Europe, which could either be via a partnership or licensing route, or the company choosing to go-it-alone
  • Partnership or licensing-out route: Important to understand the value of the assets, potential tax implications, different partnering models and aligning incentives
  • Go-it-alone: Necessary to map out the commercial and launch strategy, as well as identify the capabilities required to manage the successful build-up and implementation in Europe (incl. medical, commercial, regulatory, supply chain, legal and compliance, finance / Tax, HR, IT, etc.)

European Entry ‘must haves’

Before making a decision on which go-to-market route to follow, it is important to understand what is required to launch products in Europe alone (i.e. without a partner), including the ‘must-haves’ for commercialisation in the European market, associated costs, required investment for business activities (such as running marketing campaigns) and hiring FTEs. It is also critical to consider all the business’ organisational functions and determine what contribution will be required from each when it comes to the build-up of the European operation.