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Biotechnology has difficulties living up to its potential commercially, because its business model is stretched:

• excellent research results have a hard time proving themselves through development in a clinical setting;
• clinical trials -including preparations, approvals and analyses- take (much) longer than envisioned;
• increasingly burdensome regulatory procedures and pricing pressure on drugs decrease margins;
• periodic financing needs make biotech companies vulnerable and disproportionately hard hit by the financial crisis (‘back against the wall');
• Big Pharma's patent cliff and many internal programs failing, have made pharma companies very risk-averse;
• more development- and even registration risk is put on biotech shoulders;
• the ultra competitive nature of science and its patent positions have increased registration risk.

The promise of high quality basic science has difficulty translating into successful drugs within a commercially viable time frame. Intrinsic and strategic value in the biotech industry is often not reflected in market capitalization in both public and private equity markets. The value creation stage for biotech has become a moving target.

Big drug companies have continued to merge and chase perceived merits of gigantism, huddling around a limited number of therapeutic categories. These mergers continue to lead to capital destruction and much uncertainty (risk) for biotech.

It's hard enough for biotech to successfully transition from science into a product-oriented company. Moving into large Phase III clinical registration trials, let alone surfing through the tough registration process, may well prove a bridge too far for many biotech companies.

Late-stage focus has moved from an average holding period of three to five years, to six to eight years or even longer. There are no short cuts in biotech and no margins for error in a very dynamic and rapidly changing industry.