Funding for Applied and Contract RD

NBFs, because of their obvious commercial potential have been provided substantial governmental and institutional support mechanisms not afforded to most other industries. The result: a myriad of programmes, funds, schemes and bodies ready willing and able to throw money at the NBF. However, one of the most important factors in the continued growth of the biotechnology industry is the increased availability of pre-competitive/contract research funds from pharmaceutical companies.

Big Pharma in particular, has moved to outsource high-risk, early-stage research to small biotech firms. This 'innovation gap' reflects Big Pharma's drive to reduce the difference between R&D spending and fewer drug approvals (Burrill and Haiduck 2004). However, there is evidence that deals between pharmaceutical companies are becoming fewer but larger and more complex (Haiduck and Burrill 2004). The ability to negotiate and close a complex deal may be a substantial challenge to a new biotech firm without commercial/legal skills, and drain scarce resources if costly external legal advice is sought.

A major criterion in a biotech firm being able to trigger such funds is the quality and excellence of the research team, as previously discussed. This may be a disadvantage in pushing a research-institute based team back to a grant mentality (but where funds are subject to strict commercial-type milestones) rather than assisting in the development of a business culture within the firm. Careful management of such a process is therefore important, and here advanced project management skills come into play.

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