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A couple of weeks back, we talked about biotech bringing back dinosaurs and how it could create human-animal hybrids. This week, we take it a step further, taking a look at a mythical creature, the unicorn. But not the horned, mystical creature with curative powers. Instead, we’re talking about biotech unicorns – startups that have achieved a $1 billion valuation.
Building a successful biotech startup is already remarkable, but what sets unicorn companies apart? What makes a biotech company “unicorn material”?
Last month, we gathered expert advice on the challenges and best practices for launching a biotech company. This week, we’re exploring the leap from success to unicorn status. To understand this exclusive club, we spoke to Trevor Martin, CEO and co-founder of Mammoth Biosciences, one of these rare biotech unicorns. We also turned to João Ribas, Principal at Novo Holdings seed investments, to gain the perspective of an investor who has seen startups grow to reach a billion-dollar valuation.
Are biotech unicorns simply doing things differently, or is their extraordinary success driven by an elusive x-factor? Let’s find out.
Table of contents
What sets a biotech unicorn apart from the get-go?
Achieving a valuation exceeding $1 billion in the biotech industry demands more than groundbreaking science.
Ribas emphasizes that a biotech unicorn “sets itself apart by addressing a critical unmet clinical need with a highly differentiated approach or breakthrough technology.”
But Ribas also notes that this innovative differentiated approach isn’t enough. “At this level, success goes beyond scientific innovation, with a strong component of execution and vision. It boils down to a unique blend of science, unmet need, and the right team to move it forward and create long-term value,” added Ribas.
Janita Good, co-head of life sciences at Fieldfisher, a legal firm advising multinational corporations, agrees that reaching unicorn status goes beyond the science, highlighting the importance of market awareness. “A clear understanding of the entire development and commercialization pathway is essential. Cutting-edge science is only valuable if it meets a real market need.”
Market awareness is something Martin also mentioned from a different angle as he believes that breakthrough science is only valuable if it can have a meaningful impact on patients that wouldn’t be possible otherwise.
“As a scientist, myself, I’m often intrigued by many of the new CRISPR discoveries we find using our protein discovery and development engine. However, we only pursue those innovations that have the potential to be first in class and best in class for diseases. That’s how we went about selecting our lead candidate, APOC3, as well as candidates for the rest of our pipeline including our neuromuscular and central nervous system (CNS) programs,” said Martin.
While scientific innovation and market awareness are foundational, the ability to execute the science effectively is equally vital. Specialization and a focused approach to innovation can significantly differentiate a biotech company. Martin shared that his company has “made the conscious decision to remain hyper-focused on what it does best: discovering and developing novel CRISPR technologies, particularly ultra-compact ones that enable in vivo gene editing in multiple tissues beyond the liver.” This strategic focus allows the company to leverage its core competencies effectively, leading to the development of unique solutions that address specific medical challenges.
“Many startups spread themselves too thin by trying to accomplish too much with too limited differentiation and all that with the limited resources at their disposal. I firmly believe that identifying a repeatable platform that can bring value to patients in a differentiated way and executing relentlessly on that is the key to reaching unicorn status. For Mammoth, that’s the ability to do any type of edit in any cell in the body – especially extra-hepatically where other companies struggle,” said Martin.
So far, it seems that the key lies in an innovative, differentiated approach with a clear marketable application that is equally focused to clearly set the company apart from others. While this is very valuable advice, it can remain true to build a successful biotech startup that would not necessarily become a unicorn.
Good notes that, unlike in other sectors, it’s rare to see biotech companies transition directly from startup to unicorn. “The question is more about the qualities that enable a biotech startup to scale effectively.”
How does a biotech startup scale to become a unicorn?
Scaling a biotech startup to unicorn status requires both robust funding strategies and strategic partnerships. As Martin puts it: “Building a successful platform biotech unicorn is a long journey and requires the right mix of investors, team members, and partners who understand the long-term vision and the massive return to patients, investors, and partners that it can uniquely provide.”
Funding as the foundation for growth
Securing sufficient funding is one of the most critical steps in scaling a biotech startup. “Series B and C rounds are critical due to the capital-intensive nature of research and development, and the long timeframes involved in product development in biotech,” said Martin.
However, funding alone is not enough – it’s about finding the right investors. “You want investors who are aligned with your company’s vision and mission and have deep sector-specific knowledge,” Martin adds. “The best investors can provide not only funding but also strategic insights and support to help you navigate the financial, clinical, and regulatory hurdles essential for success in the biotech ecosystem.”
Ribas echoes this sentiment: “Building successful companies requires three core elements: great science, great people, and capital. Investors can play an important role in setting companies up for success beyond financial support, such as through value creation planning and leveraging their networks.”
You have to think of investors as partners and not only resource providers. This takes us to our next point – partnerships.
Strategic partnerships as accelerators
While funding is essential, strategic partnerships are what propel many biotech startups to unicorn status. Collaborations with big pharma companies can validate a startup’s technology, offer critical resources, and open doors to scaling opportunities.
When it comes to choosing partners, similarly to choosing your investor, Martin insists on the importance of alignment. “You want to partner with companies who are aligned with your vision of where the technology can go, whose technologies are complementary to yours, and who bring expertise you can learn from so that as a startup, you can supercharge your focus on your company’s unique expertise and learn from successful biotechs that have come before you as you scale.”
“Finding the right partners is foundational to building a unicorn company,” Martin emphasized. “Our partnerships with Bayer, Vertex, and Regeneron exemplify this. For instance, our partnership with Regeneron synergistically leverages Mammoth’s gene-editing systems with Regeneron’s AAV delivery technology, helping to overcome delivery challenges and ultimately benefiting patients with serious genetic diseases.”
This is the reason why it’s important to do your research to know what companies you could build synergies with. For startups looking to approach big pharma, Ribas advises investing time in understanding their specific needs: “Understanding pharma’s perspective allows biotech startups to better navigate the therapeutic landscape and align key value-generating activities.” Building informal relationships early on can also create long-term value, according to Ribas.
Beyond pharma, partnerships with contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs) can offer cost-efficient ways to advance clinical progress. Good explains, “Collaborations with service providers who are willing to risk-share in clinical trials or manufacturing allow startups to advance without needing as much direct funding, accelerating time-to-market.”
Building the right team with the right leadership
A culture of collaboration is critical for solving the challenges inherent in biotech development. “Fostering a culture in which ideas are openly discussed, challenged, and refined across all stages of development drives innovation and resilience. This cross-pollination of insights from people with different backgrounds strengthens the company’s foundation and helps reach the right answers when there’s always limited information,” noted Martin.
This culture extends beyond individual teams to the organization as a whole, ensuring alignment across research, operations, and strategic decision-making. Companies that encourage collaboration not only improve problem-solving but also create an environment where innovation thrives.
Biotech companies often start with academic founders at the helm, bringing deep scientific expertise but sometimes limited business experience. Pairing these founders with experienced industry professionals is crucial for scaling operations and managing the business side of biotech. “A team combining seasoned entrepreneurs with successful track records alongside innovative scientists is key,” said Good. “While it’s not essential for academic founders to become business experts, they should collaborate with those who understand both science and business dynamics.”
A biotech startup’s journey to unicorn status hinges on its leadership and the culture fostered within the organization. A strong leadership team provides the vision, resilience, and collaboration necessary to navigate the complexities of scaling a biotech company while maintaining scientific excellence.
“Leadership is the opposite side of the same coin (the team). Good leaders in biotech combine scientific expertise with a readiness to challenge assumptions and encourage innovation. Effective leaders empower their teams with clear goals and metrics for success, especially those on the front lines of biology, valuing their unique perspectives and experiences,” said Martin.
Martin also points out that capitalizing on experience is essential for a startup with big ambitions. “At Mammoth, our CEO, CTO (chief technology officer), and CSO (chief scientific officer) are all Ph.D. scientists, and we’ve built a leadership team of biotech veterans with decades of experience. This combination of insight, openness, and ambition allows us to redefine what’s possible in the field.”
Biotech unicorns: Successful startups with a twist
Similar to how biotech entrepreneurs described building a successful biotech startup, it seems the key to scaling to become a unicorn lies in the innovative science at the origin of the company, its marketable, focused, and concrete application, as well as choosing the right partners and investors that will take you where your ambitions are.
So, perhaps what makes a biotech company “unicorn material” and not only a successful startup is unique to every single one of these rare entities. The advice experts shared with us in this article represents a combination of good practices to put all chances on the side of your startup to reach a $1 billion valuation, but there is necessarily some x-factor involved at some point – timing, market conditions…
However, Ribas thinks a company can have this “unicorn potential” independently of market dynamics. On the contrary, startups that are “unicorn material” will eventually scale to reach this status independently of trends.
“As company builders with a long-term vision, we focus on breakthrough science knowing that creating real impact often requires perseverance and insight. Trends in biotech can be fleeting. Instead of chasing the latest trend, we focus on creating foundational value from novel science that can withstand shifts in market trends.”
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