Blog

Biotech founders have dozens of conflicting responsibilities and only 24 hours in a day. In the early, formative days, while it’s typical to focus on securing lab space, hiring critical employees, and raising funding, they also need to plan from the outset to do everything possible to minimize regulatory risk. While it may seem like a ‘later’ task, laying these foundations early on pays tremendous dividends downstream. In this blog, we’ll focus on ways to mitigate regulatory risk.

Biotech entrepreneurs and their scientists know the importance of reproducibility – it has been drilled into them over their careers – but investing in reproducibility at the outset of an entrepreneurial journey is a savvy move that streamlines processes later in development, often increasing company value. The flipside is that if you can’t show that your science can be replicated across labs and other conditions, your product and company are non-viable.  The non-lab equivalent to reproducibility is redundancy and risk mitigation. So how do you mitigate the risk? Have the right people on standby.

For a startup developing a therapeutic, the standard growth trajectory begins with developing a benchtop proof of concept utilizing minimal funds (pre-seed stage). This is followed by securing rounds of fundraising to grow the team, accelerate the science, and show proof of concept in animals (seed stage). Then, companies will start to think about raising a sizeable amount of capital to make the jump to building a proof of concept in humans (Series A).

Setting you and your startup up for success to survive and thrive through each stage is critical. Many founders unknowingly make it harder on themselves by avoiding opportunities to robustly de-risk their pipeline. Founders who have been the most successful with fundraising, growth, and market exits are the ones who have figured out how to effectively reduce risks across the board to make their company a more attractive investment.

Lean startups typically lack the resources to hire an entire team, but simply having someone onboard who has worked alongside Regulatory Affairs (RA) in the past helps ensure that there are no surprises when interacting with the FDA. Additionally, having this voice and experience in the organization helps to foster a team-wide de-risking mindset, even if it’s not yet a full-time role within the team.

As companies mature and bring in resources – typically after Series A – they bring in RA and Quality Assurance (QA) resources. These roles work together to ensure that they have answers ready for whatever the FDA might ask. Their jobs are to ensure that the company’s work is reproducible and supported by data, and that the proper documentation is available for critical company milestones including diligence exercises, like fundraising or acquisition activities.

Risk is unavoidable as much of it looms from outside of the lab. However, while certain risks are out of your hands, there are ways to manage those that you can control and protect yourself from the ones you cannot. For first-time biotech founders, many of whom come directly from academia, the regulatory process is not one they have experience with. For that reason, mitigating regulatory risks is something we regularly talk with early-stage teams about as they begin their entrepreneurial journeys. At LabCentral, we support their science and provide mentoring, coaching, and resources to help them navigate these issues.