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Historically in biotech, vertical players (make drugs) capture all the value and horizontal players (picks and shovels) miss out on the glory.
But new tech-based platforms are shaking this up as @JorgeCondeBio and I explain in our @a16z blog.
https://a16z.com/2021/01/08/bio-platform-companies/
But new tech-based platforms are shaking this up as @JorgeCondeBio and I explain in our @a16z blog.
https://a16z.com/2021/01/08/bio-platform-companies/
Platform biotechs constantly face the multi-armed bandit problem: should they spend time and $ on improving the platform or on the programs they have so far. Most vertical co's choose the programs.
We identify 3 key features that enable success through focus on the platform:
We identify 3 key features that enable success through focus on the platform:
3 keys to success as a horizontal co in biotech:
A) Applicability - how many programs can use your tech
B) Criticality - how critical is your tech to a program
C) Demonstrability - how quickly will your contribution be validated
A) Applicability - how many programs can use your tech
B) Criticality - how critical is your tech to a program
C) Demonstrability - how quickly will your contribution be validated
Technologies in bio differ in how well suited they are to horizontal business models.
Here's my quick take on how different technologies score on the three features defined above.
Let's debate these scores in the replies on this thread - where do you agree or disagree?!
Here's my quick take on how different technologies score on the three features defined above.
Let's debate these scores in the replies on this thread - where do you agree or disagree?!
Highlighting delivery: this is a category where we think horizontal players have a huge opportunity to capture value without going full stack. @Dyno_Tx , @GuideTx , @Dyne_tx , @EvOx_Ltd , Acuitas (who designed the Pfizer/BioNTech vector!) are all great examples.
Highlighting antibody design: Adimab, @AbCelleraBio, @distributedbio have already demonstrated success with horizontal business models. Several new entrants to keep an eye on are BigHat ( @MarkDePristo), @manifoldbio, xCella, K2.
There are a lot of attractive advantages to horizontal models: less capital required for trials, others shoulder the biological risk, overall risk and impact are distributed more broadly.
Plus, the team can focus on the core competency that the platform co was founded on
Plus, the team can focus on the core competency that the platform co was founded on
