Assessing Biotechnology Feasibility

Assessing Biotechnology Feasibility.  As new and exciting biotechnologies continue to arrive in the marketplace, funding sources (investors, lenders, venture capitalists, etc.) continue to be faced with some difficult decisions.  Those seeking funding seem to always believe that their technology is the best on the market, and offers many benefits not found elsewhere.  Sometimes this is true, but unfortunately, it is not always the case.  Two problems seem to always arise in the funding process of biotechnologies.  The first involves the technology itself. Most investors do not have an “in house” ability to dissect the technology, compare it to others, and opine as to the probable outputs the owners present.  Second, while funding sources are certainly well equipped to evaluate the numbers – profitability, ROI, etc., this only helps as they have proper input as to the variables.  This is another area of expertise needed.

The threshold question faced is whether it is prudent to spend the money initially for a full-blown feasibility study, or whether to seek out what we call a “prefeasibility assessment”.   There are situations where a case can be made for both.  If the project is going to sophisticated investors who are going to put down millions of dollars, a full feasibility study may make senses.  If the funding source is simply trying to determine whether to proceed further, the commercial assessment, prefeasibility study may provide enough information to know when to stay away.  If the result of the initial study are promising, and funding is then to be seriously considered, the results certainly can be incorporated into the more extensive feasibility study and even the business plan.

In assessing the technology initially, the following are examples of questions to be answered:

1. What is the commercial opportunity presented?
2. Does the technology or invention merit further investment at this stage of development?
3. Where does it fit into the current technology picture?
4. What are the costs versus benefits of the technology?
5. What are the next key steps to commercialization?
6. What are the major risks and unanswered questions?
7. Who are the potential commercial partners to whom it should be marketed to and what is the value proposition?

At a minimum, a pre feasibility technology assessment should tell the reader:

1. Commercial Application – How would the technology be used commercially?
2. Technical Description Summary – A short technical description that allows those unfamiliar with the details to understand how it works and why it is advantageous.
3. Market, Trends and Competitive Landscape – An assessment of current and future markets, customers and potential competitors.
4. Development Directions – The next steps in development and how they might be accomplished.
5. Commercialization Suitability – The cost benefit analysis of the project and/or technology, and any commercialization difficulties.
6. Recommendation – What expert’s recommendation.

Biotechnology feasibility affords independent industry and scientific expertise to help understand the technologies, the industry, and the economics.  An independent, pre feasibility assessment is a great tool that can save significant time and money, and often a good first step in independent review and project planning. When promising results are found, the full, detailed feasibility study and due diligence can then be undertaken.

Large renewable energy and biochemical consulting firms certainly have experts in biotechnologies, as well as the more common areas like bio and renewable fuels, biomass and biomass power, feedstocks, biomaterials, and biochemicals.  These larger groups will also have expertise in other technologies like agitation systems, anaerobic digestion, beverage fermentation, bio-oil extraction, bioreactors, carbon capture, carbon storage, carbonization, catalysis, cellulosic ethanol, cleantech, combined heat and power, direct combustion, enzyme technologies, fermentation, Fischer-Tropsch, gasification, genetic engineering, hydrothermal,  nanotechnology, organosynthesis, power generation, pyrolysis, renewable technology due diligence, synthetic biology, thermochemical conversion, torrefaction, water treatment, and waste management.

Lee Enterprises Consulting is the world’s premier bioeconomy consulting group, with over 150 highly bioeconomy experts.  We have the expertise in business planning, preliminary or full feasibility studies, grant preparation and commercial funding requests.  For the larger projects, we specialize in putting together full service, interdisciplinary teams with one point of contact.  Take a look at our experts and the services we provide and email us for more information.  See also:  Can Techno Economic Models Help Investors,