Tailoring Partnerships for Lean Sponsors
Emerging biotechs and small pharma are driving industry innovation, but their lean operations require distinct service models to help them turn early-stage concepts into commercial realities.
Emerging biotech and smaller pharma companies provide the broader bio/pharma industry with a pool of innovation to draw from and potentially develop further towards commercialization (1,2). However, these smaller companies are faced with significantly different operational realities compared with their larger counterparts, leading to a specific set of needs from service providers.
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Understanding Unique Needs
“It is very important, especially for CRDMOs, to understand the unique needs of emerging biotech and small pharmaceutical companies,” asserts Xiang Li, Chief Operating Officer and President of Chemistry & CMC of BioDuro. “Normally, these organizations consist of only a few senior scientists or executives, sometimes operating without physical laboratory space, particularly in the early stages, and managing a pipeline of only one or two assets.”
As a result of these operational limitations, CRDMOs need to thoroughly understand a smaller sponsor’s situation to be able to work in a unified way, sharing the same goal, Li stresses. For example, he explains that if a sponsor lacks an internal laboratory or a large team, the service provider needs to have the capability to offer end-to-end solutions that cover hit-to-lead, lead optimization, preclinical candidate (PCC) selection, IND-enabling studies, and Phase I/II development.
“If a partner can offer all the capabilities, they are able to not only help the client complete the whole drug discovery and development chain, but they can also expedite the whole process,” Li adds.
In cases where sponsors don’t have their own laboratory, there can be challenges around the reliability of data, particularly when projects encounter technical hurdles, Li continues. “CRDMOs need to be very qualified and reliable for clients, with any deliverable data being capable of answering the question at hand,” he remarks.
When sponsors have only one pipeline or they only need one project to verify their concept, CRDMOs need to have ownership of the project, Li confirms. “So, CRDMOs need to understand the needs and the long-term goal of the sponsor,” he says. “Partners should not only deliver synthesized compounds or bioassay data but should help sponsors to have their technology and platform serve the real-world and enable their overall success.”
Integrated Oversight
Given the fact that emerging and smaller sponsors have lean internal teams, they require a partner with a highly capable management team that can act as a single point of contact to manage all technical disciplines, Li notes. Without such integrated oversight, a small client is forced to manage multiple individual contacts potentially across different time zones, languages, and working styles, he stresses.
“However, single-point management alone is not enough,” Li warns. For example, if a biotech’s head of discovery interacts with a project manager who lacks technical depth or seniority, it can be problematic as resources would need to be spent on training in such an instance, he reveals.
To serve as a true extension of such lean teams, “CRDMOs need to provide qualified, integrated project management to partners to save their time and funding, and to more quickly achieve their goal,” Li specifies.
Flexible Contracting
Capital allocation is undoubtedly a major consideration for early-stage biotechs, Li emphasizes. These companies are very interested in finding ways to maximize the value and return of a limited funding pool while also quickly validating their concept, he asserts.
A potential approach to help in such cases is to employ milestone-based contracting, which is frequently used by BioDuro for early-stage companies, Li confirms. This approach prevents sponsors from committing a vast amount of capital before proving their core concept, allowing them to figure out if a path is not viable early on, he explains.
“For example, [BioDuro] worked with a starting biotech company looking to pursue a fast-follow strategy for a highly successful new drug,” Li says. After evaluating the target and patent landscape, the BioDuro team identified significant technical hurdles that would make achieving the desired target product profile difficult and were transparent with the client, which led to a proposal for a smaller, targeted validation project instead of a larger, more expensive integrated contract, he admits. While the initial milestone contract was small, Li points out that it allowed the client to rapidly evaluate feasibility and gain confidence before committing more capital.
“We also adapt our engagement models based on the client’s internal expertise or technology and intellectual property strategy,” Li specifies.
An Evolving CRDMO Dynamic
Looking ahead, with the rapid emergence of new therapeutic modalities, biotechs are facing intense competitive pressure, Li highlights. “If a sponsor spends years pursuing a single small-molecule candidate, even if they successfully reach a PCC or file an IND, the market landscape may have moved onto a superior modality by the time they get to that stage,” he says.
Therefore, to keep emerging biotechs competitive, the CRDMO dynamic must focus on the three core pillars of speed, quality, and cost efficiency, Li specifies.
“When I began my career 19 years ago, building a high-throughput screening library of a million compounds for a client took three years,” Li asserts. “We would deploy hundreds of chemists across dozens of pipelines over a decade-long development journey. That timeline simply does not work in today’s market.”
Today, speed is driven by technologies, such as parallel synthesis, high-throughput experimentation (HTE), and direct-to-biology workflows, Li remarks. These tools do not just shave off 10% or 20% of the timeline, they can compress discovery cycles by up to 80%, enabling much faster decision-making, he reveals.
Additionally, emerging biotechs often have only one chance to prove their lead asset where a single analytical or data error in the early stages can prematurely kill a viable pipeline, Li emphasizes. High-quality data and absolute fidelity in compound synthesis must be delivered within short turnaround times, he stresses.
“Finally, by integrating automation, high-throughput screening, and AI into daily workflows, CRDMOs can drastically reduce turnaround times and lower execution costs,” Li summarizes. “Compared to 10 or 20 years ago, modern CRDMOs offer unprecedented speed, rigorous quality, and highly competitive cost structures to help early-stage biotechs and small pharma companies to be successful.”
References
1. Fantaccini, S.; Grassi, L, Howell, S. Innovating Pharma: Bridging Traditional Acquisition and Emerging Technologies. Blockchain Healthc. Today, 2026, 9 (1), 435.
2. EFPIA. SMEs in Europe. EFPIA.eu, accessed Oct. 26, 2026.
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