According to a recent survey commissioned by Clinical Research Organization (CRO) Icon, 48% of biotech companies rely on partnerships with Big Pharma as a funding source. The challenging funding environment has encouraged such partnerships, with venture capital firms being the second most popular form of financing at 32%, and government grants/public funding coming in third at 28%.
The survey was completed by 133 senior-level decision-makers in the biotech industry, spanning North America, Europe, and the Asia-Pacific region. Over half (51%) of the respondents indicated that their organizations were involved in more than four ongoing clinical trials. The prominence of small molecules (35%) and cell therapies (31%) as drug modalities was reported.
Given the expected dip to $24 billion in biopharma VC funding for the year – representing a four-year-low and a significant decrease from the annual values of preceding years – the reliance on Big Pharma partnerships for financing is not surprising.
Despite financial challenges, an optimistic 60% of survey participants expect their R&D expenditure to increase over the next couple of years. Only 2% anticipate a decrease in development spending. Meanwhile, an active 15% were seeking additional funding at the time of the survey.
The future operations of nearly half (47%) of the surveyed companies are predicted to be most influenced by the rising cost of capital. Advancements in AI, machine learning, and robotic process automation were identified as significant influencing factors by 41% of respondents. In terms of meeting their next investment milestone, 32% of biotech leaders expressed high confidence, with the majority (61%) being ‘somewhat’ confident.
The Big Pharma partnership venture capital (VC) funding model appears to be a sustainable solution for biotech companies facing tough funding conditions, enabling them to continue their research and development efforts.
