Research and development investments for biologics independently developed by US biotechnology startups, 2017-2023.

Introduction: Despite policy interest in pharmaceutical innovation, little is known about the investment needed for venture capital-backed startups to develop innovative biologics, a growing segment of the pharmaceutical marketplace.

Methods: In a cross-sectional analysis of Food and Drug Administration (FDA) drug approval data, investment deal records, and clinical trials data, we estimated the investment needed for a biotechnology startup company to independently develop a biologic approved by the US FDA with priority review, an indicator of innovation. To isolate a homogenous set of cases, the sample focused on independent drug development of 13 drugs by 9 biotechnology startup companies that retained ownership of the drug from the start of development to FDA approval without being acquired or licensing the product.

Results: We found that the median investment per FDA-approved biologic was $304.1 million (IQR: $289.9-$790.3 million) in uncapitalized costs, accounting for the cost of failures.

Conclusion: This estimate represents the direct drug R&D investment needed for independent development of innovative biologic products by biotechnology startup companies.