Several Canadian biotechnology companies have pivoted their technology and product development, directing research into developing vaccines and therapeutics to target COVID-19. Biopharma innovation was viewed as the solution to defeating the deadly COVID-19 virus, which was a major contributing factor to the sector’s success during the past year.
With three vaccines being approved for emergency use in Canada and made available in record time, and several others poised to debut, public biopharma companies large and small closed out the year in positive territory. The NASDAQ Biotech Index increased 26% in value year-over-year, from 2019 to 2020. The positive investment climate for biotechnology innovation was a contributing factor in the surge in valuations of Canadian biotechnology equities. It also contributed to a 36% increase in the number of public companies to 85, with a collective market cap of almost C$32 billion (US$25 billion), more than double the 2019 total. [source: Section 9.5 PharmaFocus 2025 publication]
Biotech and emerging biopharma (EBP) companies are at the root of early-stage drug development. Their performance, the environment in which they operate, and their relationship to other stakeholders in the health system plays a critical role in determining the future of many novel therapies and health technologies.
EBPs are pushing the boundaries of science to deliver breakthrough therapies to patients
To speed up the time to market, EBP companies need to take advantage of new trial designs, new technologies such as artificial intelligence, new strategic partnerships, and other innovative strategies.
They need to partner with those who understand their unique challenges and can provide them with innovative solutions so they can reach their milestones across the clinical to commercial journey.
Biotech companies deal with uniquely complex challenges
Emerging biopharma and biotech companies have proven to be critical drivers of innovation, representing over 80% of early-stage research and over 70% of late-stage research globally. Despite this rapid growth, these companies face critical clinical and commercial decisions as they mature in the market.
Table 1: Critical decision areas faced by emerging biopharma and biotechnology companies
Critical clinical decisions
- Which direction should I take the asset?
- Where can I secure funding?
- What partners should I consider?
- How do I optimize burn rate?
- What vendors do I need and how am I going to manage them?
- Which opportunities should I prioritize?
- How can I more quickly get to a value definition point?
- What sales channels should we employ?
- How should we engage patients?
- Should we take the product to market? Or license? Or sell?
- How do we get optimal price and access?
- Where should we launch and in what order?
- How do we take the product to market?
- How do we reach the right prescribers and patients?
Different EBP business models result in different levels of engagement in R&D and commercialization. Some EBPs concentrate on pre-clinical research and then license the product to a partner that will take the reins on the commercialization process. They may look to Big Pharma to provide continued clinical development, commercialization, and medical affairs support.
EBP growth initiatives
Even though each biotech company’s business circumstances can be unique, they often share similar growth initiatives.
Asset selection is the first pillar of growth. It is important to accurately interpret the commercial potential of various therapeutic areas and to pick those with the opportunity for the highest return with the help of data-backed ROI evaluations. Companies should start with understanding the target country’s treatment landscape, looking at the disease area segmentation (comparing Rx Maturity to Criticality of Need). Subsequently, it is important to leverage other healthcare and commercial data to quickly perform asset valuation and ROI analysis (e.g., clinical success rate, commercial potential, development costs, and commercial cost).
For the business to scale up, the second pillar of growth requires good portfolio management. This includes discerning pipeline growth limits and gaps; allocating investments wisely on additional product development and acquisition; and controlling long-term risks to achieve a sustainable revenue and profit growth.
Key considerations in portfolio strategy include the limited growth of current in-market products, corporate targets to ensure target internal rate of return (IRR) and growth trajectory, timeline of product pipeline maturation, and considering expansion via acquisition. Portfolio management should align the quantitative assessment on the commercial potential of pipeline products with the growth trajectories to meet the corporate targets.
The third pillar of growth, commercial strategy, involves choosing the right partnership model to enter specific markets and adding value to assets with emerging digital capabilities and collaborative business models.
The growth of EBPs in Canada creates an enormous competitive landscape.
EBPs must decide on the best approaches at each stage of the clinical to commercial journey in order to succeed. The formula for success can vary based on each company’s unique challenges.
Biotech and Emerging Biopharma customers have a different set of needs to successfully develop, launch, and manage products over their lifecycles. Companies that succeed will require knowledge, data, and trusted partners to help them deliver innovative healthcare to patients.