Biotech-in-a-box™: A three-step game plan for biotech

The report

How to ‘ACE’ geographical expansion in Europe: A three-step game plan for biotech was released by Deloitte. Based on Deloitte's experience helping biotech companies navigate geographical expansion, this report defines an ACE framework - three steps to effectively assess market potential, select the most appropriate go-to-market options, and choose the best route to successfully establish presence in Europe.

Viewpoints / key findings

The global biotechnology sector is thriving and is at the forefront of the R&D of new therapies. China has also seen unmatched growth of the industry, with many innovative companies raising capital and starting to expand internationally. A critical requirement for expanding globally is to capture opportunities in Europe, which accounts for over 20% of the total global pharmaceutical market. However, there are distinct healthcare systems and reimbursement processes for each market in Europe. Thriving in such an intricate environment means going beyond traditional thinking regarding geographical expansion.

Expansion in Europe: ACE framework

Based on our experience helping biotech companies navigate geographical expansion, we have defined three steps to effectively assess market potential, select the most appropriate go-to-market options, and choose the best route to successfully establish presence in Europe.

• Assess potential
  A critical first step before starting market exploration is developing the vision and principles for the European business among senior executives. This involves aligning opinions on key strategy aspects and potential trade-offs such as company culture for different geographies, time to realise value, risk appetite and overall company brand.
• Consider options
  To create a shortlist of potential options, management needs to analyse each go-to-market option qualitatively and quantitatively, considering a set of strategic criteria, considering a set of strategic criteria: commercialisation investment, time to value, share of profit, complexity to manage, resource requirements and risks associated. The best solution(s) will complement the previously established overall business vision and design principles for European expansion.
• Establish presence
  It is necessary to consider how best to address them on the pursuit towards the chosen route to establish presence in Europe:
  • Partnership or licensing route: In structuring a partnership deal, it is important to keep in mind the guiding principles previously established; it is also essential to determine the valuation and potential tax implications of the partnership. When licensing out a product, it is essential to understand the value of the assets and manage the due diligence process.
  • Go-it-alone route: To successfully go-it-alone, a biotech company needs a dedicated team responsible for managing the implementation, to prevent disruption to existing business.

The road to success is supported by a deep understanding of European markets and a clear vision of the future: know what you are getting into and how to be prepared. As we described in the three-step ACE-framework, gather early cross-functional input on the available options – not only assessing commercial opportunities, but bringing together the various views from strategy, tax/finance, regulatory and R&D. Getting European launch right will be invaluable to the business. Forward-thinking behaviour will stand the business in good stead to capture the opportunity in Europe… and beyond.