New Biotech Buzzword: Shotgun on Goal

Remember a few years back when you couldn't make it through a biotech investor presentation without hearing the phrase "multiple shots on goal?" But now, with money tight, runways short and exit strategies limited, it looks like we're due for a return of the "one trick pony."

I wrote about shifting biotech business models recently for BioWorld Insight, and what surprised me was that a lot of folks don't necessarily think one-trick-ponies are bad. The main argument against them is risk -- what do you do when your one trick flops? -- but venture capitalists will argue that they are diversified through their portfolios, so such binary risk isn't really that scary.

Others VCs pointed out that it's difficult for biotechs with broad pipelines to manage multiple projects well. And if the company is built on licensing (as so many biotechs are these days) -- what're the chances that you'll find multiple programs just as good and just as likely to succeed as your lead?

Pick the best horse and bet on it, the VCs advised. If it throws a shoe, pray that happens in the starting gate and not the backstretch. And if it does indeed happen, close up shop and move on to a new company rather than throwing whatever cash is left toward piddly preclinical programs that don't deserve funding (VCs are starting to sound a bit like the public company investors who pushed for liquidation of biotech shells like Avigen Inc. rather than putting the remaining cash toward new endeavors).

Which isn't to say every biotech should be a one-trick-pony. Sean McCarthy, senior principal at Pappas Ventures, said "there's still room for different business models."

In the BioWorld article, he noted that:

The multiple-shots-on-goal model was "driven by having one eye on the public markets" -- and the market was hot for strong management teams, late-stage products and broad pipelines. Today, it's all about positioning for an acquisition, and pharma wants to see multiple shots on a single target.

Bingo image courtesy of Flickr user klynslis, CC2.0