Promising science often fails to become a therapy that reaches patients, and the cause is frequently a strategic business error rather than flawed biology. In this byline article, Chris Ehrlich, Chief Executive Officer of CERo Therapeutics, argues that commercial planning should run in parallel with discovery from day one, not begin after clinical proof of concept.
Key Takeaways
- Bench science alone does not carry a program. Many early-stage biotech failures trace back to strategic missteps and late-arriving commercial planning rather than to weak biology.
- Start commercial thinking at inception. Early attention to the target product profile, competitive landscape, and payer evidence requirements is far cheaper than amending trials after they are underway.
- Use NPV as a working decision tool. Milestone-driven development that steadily retires risk keeps capital disciplined and makes it possible to pivot or stop a program when the data no longer support it.
- Three failure points recur. Ventures often discover too late that there is no clear market, benchmark against today’s therapies instead of the pipeline, and lack the reimbursement evidence payers require.
- Scientists and business leaders need each other. Founders must translate mechanism into a story investors can evaluate, and commercial leaders need enough command of the biology to make credible trade-offs.
Why Great Science Alone Is Not Enough
World-class scientific discoveries frequently fail to yield successful commercial therapies. This persistent paradox haunts the life sciences industry. Millions of dollars and years of rigorous laboratory work can culminate in a biological breakthrough, yet the resulting enterprise flounders before reaching patients. This breakdown rarely stems from flawed bench science. More often, it is the direct consequence of treating commercial strategy as an afterthought, a downstream task deferred until clinical trials are well underway.
In early-stage biotechnology, risk management is the fundamental currency of survival. Recent industry valuation models from Deloitte emphasize that early-stage ventures require constant risk adjustment to evaluate cash flows, as clinical-stage assets carry significant attrition rates before reaching regulatory approval. Every emerging enterprise can be evaluated as a project governed by Net Present Value (NPV), calculated by balancing projected development costs against discounted future revenue streams. As a candidate molecule progresses from discovery toward clinical application, mitigating technical and regulatory risks causes perceived NPV to appreciate. However, clinical de-risking alone is insufficient to build lasting enterprise value. If an asset is developed without continuous alignment to market demands, reimbursement realities, and competitive positioning, its financial and therapeutic potential remains sharply constrained.[1]
Navigating this reality requires executive teams to abandon the traditional, linear model of drug development. Commercial strategy cannot be treated as a relay race where commercial experts only receive the baton after Phase II data is published. To maximize patient impact and institutional returns, commercial planning must operate as a parallel track alongside scientific research from day one.
Early-Stage Misalignment: Science-First vs. Market-First Thinking
During the foundational stage of a biotech venture, organizational energy naturally gravitates around pure scientific discovery. Elite innovation hubs across the United States have built an extraordinary infrastructure for turning academic hypotheses into seed-funded ventures. In these early environments, a science-first orientation is understandable; without rigorous target validation and compelling mechanistic proof, no commercial asset exists.[2]
However, an unchecked science-first culture creates significant operational blind spots. Scientific founders and early research teams often operate under the assumption that exceptional data will automatically create its own market. Conversely, imposing a heavy, inflexible market-first framework during initial target identification can stifle innovation or force premature assumptions onto evolving biological data that will ultimately fail in the clinic.
The objective of mature leadership in this industry strikes a balance between both of these paradigms. A leader must ground the scientific exploration within a practical market context without stifling real innovation in the space. It will always be a moving target, with early-stage ventures operating in an environment where initial business plans rarely survive contact with reality, making continuous course correction essential. One of my favorite business adages is that ‘experience is what you get when you are inexperienced.’ The battle scars earned through repeatedly failing and course-correcting are precisely what forge a seasoned biotech executive. Navigating that narrow margin requires acknowledging that a substantial proportion of early-stage biotech failures result from strategic business errors and technical attrition rather than flawed biology or bad science.
Why Commercial Strategy Must Start at Inception
Postponing commercial evaluation until post-Phase I or Phase II safety and efficacy readouts is a structural error that destabilizes maturing ventures. By the time a candidate enters human trials, the flexibility to alter trial design, target patient populations, or formulation parameters drops dramatically while the cost of making changes escalates exponentially. As the old industry adage goes, “The cheapest time to fix a drug is on paper.” A month of early commercial alignment before entering the clinic can easily save years of costly trial amendments down the road.
Establishing a commercial perspective at inception directly informs the Target Product Profile (TPP), serving as an operational blueprint for R&D teams. Early commercial integration forces management to confront decisive market questions while the underlying science remains adaptable and nascent. In my work guiding biopharma ventures, I often remind executive teams that a great molecule without a clear target product profile is like a ship setting sail without a compass, it may cover a lot of ground, but rarely arrives where it needs to. Teams must explicitly define the specific clinical endpoints required not just to secure regulatory clearance, but to demonstrate meaningful superiority over future standards of care. Furthermore, leadership must evaluate how the broader treatment landscape and competitor pipeline will evolve over the decade required to bring the asset to market. Finally, early planning must identify which biomarkers or secondary endpoints are needed to justify reimbursement to institutional payers and healthcare systems.[3][4]
Addressing these parameters early ensures the venture builds an asset designed for real-world clinical adoption. McKinsey research on value-driven drug development demonstrates that early engagement with market access parameters and payer requirements significantly improves downstream development efficiency and time-to-market. Ignoring these factors creates a scenario where a company successfully navigates clinical trials only to discover it has developed a therapy that healthcare providers cannot integrate, is too costly to be viable, or that the payers refuse to cover.
NPV and Milestone-Driven Value Creation as a Decision Framework
Emerging biotech ventures operate under severe capital constraints, particularly during sustained industry contractions and macroeconomic funding droughts. Surviving these environments requires combining strict capital discipline with a clear, milestone-driven development strategy.5
Executives must treat NPV not as an abstract financial metric, but as an active framework for operational decision-making. Capital must be treated with immense discipline; early-stage ventures routinely fail from capital starvation long before they exhaust their operational bandwidth. To protect resources, structure research initiatives around explicit, sequential milestones designed to systematically eliminate key risks and demonstrate tangible NPV growth to board members and prospective syndicate partners. [1][6]
Furthermore, utilizing NPV as an operational guide demands the discipline to pivot or terminate projects when data contradicts the initial commercial or scientific thesis. True managerial maturity is demonstrated by recognizing when to reallocate capital efficiently instead of defending a compromised program.
Early in my venture capital career, our firm backed a venture developing a non-invasive ocular glucose monitoring platform. When early data demonstrated the underlying biological mechanism lacked required consistency, the management team immediately halted development and returned remaining capital to investors. That willingness to accept hard realities exemplifies the operational discipline required across the sector.
Common Points of Failure in Unintegrated Ventures
When commercial strategy is isolated from scientific R&D, ventures predictably run into structural bottlenecks that jeopardize their survival. The most frequent failure mode is late market realization. Teams routinely spend years executing regulatory-focused clinical trials without mapping clinical utility to physician workflows, producing an approved drug that lacks a clear market to target and make it successful.
A second recurring vulnerability is weak competitive differentiation. Development teams often benchmark their candidate against existing therapies on the market today, ignoring assets currently in Phase 2 or Phase 3 development. By the time the product achieves approval, the competitive baseline has shifted, rendering the asset incremental or commercially obsolete.
Finally, unintegrated ventures frequently suffer from severe reimbursement gaps. Payers increasingly demand economic evidence and comparative effectiveness data before granting formulary inclusion. Failing to engage health economists and commercial payers during early trial design often results in missing critical outcome data required for reimbursement. Without payer coverage, even FDA-approved therapies fail to reach the patients who need them.
Effective Integration: Scientific and Operational Partnerships
Preventing these failure points requires a deliberate leadership structure built on a collaborative partnership between scientific and commercial leaders. Founding scientists provide the creative genius necessary to conceive transformative platforms; however, the skill set required to invent a new technology is fundamentally distinct from the operational discipline needed to guide an asset through clinical development and commercial launch.
Achieving effective integration requires a bidirectional commitment between research and commercial executives. First, deep scientists must work closely with business leaders to translate complex mechanistic breakthroughs into clear, value-focused narratives that generalist investors and strategic partners can readily evaluate, as securing capital remains a principal duty of executive leadership. Second, operational business leaders cannot operate in isolation from the bench science; they must possess a deep, granular understanding of the core biology to make informed strategic trade-offs and maintain credibility with scientific personnel. Finally, the organization must actively work to bridge the cultural gap between discovery and execution, building a unified framework that views scientific excellence and commercial strategy as complementary drivers of the exact same goal.
Commercialization as a parallel track to science, not a downstream function
Biotech leadership must continuously adapt to match the evolving maturity of the enterprise and its underlying assets. To navigate the complex financial and regulatory realities of the life sciences sector, executives must reject the outdated idea that commercial planning begins after clinical proof of concept.
Commercialization is a parallel discipline that must run alongside scientific discovery from company formation. By grounding scientific ambition in market realities, managing risk through milestone-driven financial frameworks, and aligning scientific and operational leaders, biotech executives can steer programs through complex inflection points, ensuring promising benchtop innovations transition into impactful, commercially viable therapies for patients.
References
[1] Building a Biotech Valuation: A Deloitte Perspective. Deloitte Perspectives. Deloitte Life Sciences Insights. Online. Last accessed on September 09, 2026
[2] Paul SM, Mytelka DS, Dunwiddie CT, Persinger CC, Munos BH, Lindborg SR, Schacht AL. How to improve R&D productivity: the pharmaceutical industry’s grand challenge. Nat Rev Drug Discov. 2010 Mar;9(3):203-14. doi: 10.1038/nrd3078. Epub 2010 Feb 19. PMID: 20168317. Article. Last accessed on September 9, 2026
[3] Fisher I. How Target Product Profiles Guide Drug Development Through Uncertain Times. IQVIA Strategy Insights. IQVIA Blogs. Online. Last accessed on September 9, 2026
[4] Sartori V, Steinmann M, Evers M, Jantzer P. Value-Driven Drug Development: Unlocking the Value of Your Pipeline. McKinsey & Company. McKinsey Life Sciences Insights. Online. Last accessed on September 9, 2026
[5] Booth, Bruce. The Biotech Startup Contraction Continues… And That’s a Good Thing.” LifeSciVC, April 26, 2024. Online. Last accessed on September 9, 2026
[6] Hughes, Mark. What Makes a Good Risk Manager? Global Risk Institute, March 8, 2018. Online. Last accessed on September 9, 2026.
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