It is a good time for the biotech industry. Around the world and across the industry, research spending is experiencing steady growth and as a result, biotech funding is reaching record highs.
Driven by COVID-19 induced innovation, R&D spending in the life science industry surged 22% from 2018 to 2019 — a trend that will surely continue as long as the pandemic continues to pose health risks. As a result, the past couple of years have seen an influx of emerging biotech companies and startups rushing to go public in order to obtain large investments, with venture capital investment in biopharma reaching an all-time high at the beginning of 2021 with $23.4 billion in biotech research spending.
According to Mark Charest, founding partner and portfolio manager for LifeSci Fund Management, while this record breaking investment in the biotech industry is a good sign of things to come, don’t expect such high rates of recently public biotech companies to continue this year. “We expect the pace of new IPOs to slow somewhat as the market is still clearly struggling to digest the high volume of newly public biotech from the past couple of years,” says Mark.
So, what does all of this ongoing change mean for lab managers in 2022? Here is a closer look at the cost of running a modern biotech lab and a few strategies you can use to increase lab efficiency this year.
The Rising Cost of Running a Biotech Lab
Despite an increase in accessible funding and biotech spend across the board, one fact remains true — it is expensive to run a biotech lab. Unfortunately, compared to other facilities, opening and operating a biotech lab is expensive due to the rising cost of laboratory space and inflation leading to increased biotech lab supply prices and supply chain costs associated with procurement. Biopharma labs might have operated at around $100,000 per day in 2021, and those numbers are predicted to rise significantly in coming years due to continued inflation and supply chain issues.
COVID-19 posed many challenges to the biotech industry, some more obvious than others. While the public focus is on results — developing vaccines and other COVID-19 treatments — life inside of biotech labs are also tasked with adjusting to social distancing and advanced sanitation protocols like any other industry.
As a result, the cost of effectively operating a lab has gone from high to higher. Such costs are due to the implementation and upkeep of HVAC units, electricity to power refrigerators and freezers, and ongoing operational expenses.
4 Ways to Cut Costs and Increase Biotech Lab Efficiency
Despite increasingly expensive laboratory space and procurement costs, there are many ways that lab managers can increase efficiency in their labs without breaking the bank, such as:
1. Seek out new sources of funding
If your biotech lab budget isn’t where you need it to be in 2022, take this as an opportunity to branch out and explore other funding options that are available to you. As mentioned above, life science funding has never been more accessible. Whether you are an emerging startup or an established lab looking to expand in the new year, there is a grant or investment that you can apply for to fulfill your funding needs.
To get you started, the primary ways that biotech labs obtain funding include:
- Receiving a private investment from a biotech leader in your field
- Government grants and public funding
- University funding (if applicable)
- Connecting with venture capitalists
- A traditional small business startup loan
2. Automate lab processes
Biotech lab automation is on the rise due to its ability to reduce the potential for human error and improve reproducibility accuracy during development phases, not to mention the time implementing automated processes saves your on-site scientists and lab techs. As a result, the global lab automation market is projected to continue expanding at a CAGR of over 7% from now until 2031.
To get you started, here is how to Automate Manual Processes in Biotech Finance.
3. Keep controllable costs low
When running a biotech lab, there is only so much lab managers can control. With so much ongoing supply chain uncertainty and increased demands on biotech labs to produce and hit research milestones, it’s easy for procurement teams to feel overwhelmed to fulfill the requirements of their labs.
By running a lean lab and keeping controllable costs as low as they can, lab managers and procurement teams are able to accommodate costs that are out of their control, like those pesky supply chain issues. For example, take stock of all your lab’s equipment and supply needs for the next few months and identity opportunities for consolidation. Remember that keeping controllable costs low is an ongoing process. Conduct regularly scheduled budget review meetings to ensure you are always operating within the means of your lab.
4. Strengthen finance team bonds
A tight relationship between lab managers and finance teams is essential for creating a truly communal and effective biotech lab in 2022. All members of the lab team, from finance to the bench, need access to collaborative data and operations tools to stay on track to hit research goals.
To intentionally strengthen these interpersonal and cross-department relationships, encourage team members in both departments to check-in with one another on a casual level. Host company-wide social events or virtual meet and greets where members of the finance team and lab managers can form a deeper understanding of their coworkers. As your lab moves further into the new year, you’ll need to be a united front in order to overcome the challenges ahead.
Running a biotech lab in 2022 requires lab managers to be innovative inside and outside of the lab. Here’s how digital transformation is changing R&D lab operations and leading to the future of biotech and life science lab management.