Bringing a therapeutic innovation to market requires more than great science—it also demands long-term strategic thinking about funding, ownership, IP, future partnerships, and potential exit routes.
In a recent interview, Stephan Emmerth, Director Business Development & Operations from BaseLaunch, Peter Mozerov, Senior Manager of Life Science Strategy and Caroline Chua, Director, Transfer Pricing & Value Chain Management, from KPMG shared practical considerations for biotech founders at every stage.
Planning for exit: How biotech startups can prepare for M&A
Thinking about an exit route may not be top of mind when launching a biotech startup, but planning early can make all the difference. Strategic decisions made at the pre-clinical stage, sometimes already before your Series A round, around structure, intellectual property (IP), and partnerships, often determine how attractive a company is to potential acquirers down the road.
While scientific founders are typically focused on advancing their technology, planning for a future M&A or IPO should start the moment equity capital is raised. The positions and structures created at this stage can open or close future strategic options. A flexible setup enables multiple exit paths, ensuring the company can adapt to market shifts and investor expectations without costly restructuring.
”There are considerations that are important to get right at the very beginning. These can make the set-up attractive both for founders and for potential investors.
Caroline ChuaDirector, Transfer Pricing & Value Chain Management, KPMG
Founders should evaluate ownership structure, geographic footprint, and whether capital is injected as debt or equity. These decisions help prevent inefficiencies and, critically, support a smooth transaction later.
What shapes future value
In biotech, IP is the cornerstone of valuation. Understanding licensing status, patent protection, and ownership rights is essential. Companies must not only secure the right protections but also ensure that IP management and decision-making occur in the appropriate jurisdiction to support long-term monetization.
A clear IP strategy can be a deciding factor when investors or potential acquirers assess a company’s potential.
Building towards acquisition
Successful biotech transactions often start long before formal negotiations. For early-stage companies, generating awareness and trust through early networking with pharma business development teams is key. From there, clear differentiation, robust data, and strategic alignment increase attractiveness.
Preparing targeted proof-of-concept data, building strong scientific networks, and protecting IP can all help build momentum toward future acquisition interest.
Early-stage vs. late-stage dynamics
Early-stage acquisitions tend to be buyer-driven, usually when a field is heating up or fear of missing out accelerates activity. Here, generating curiosity and demonstrating value is critical.
By contrast, seller-driven approaches dominate later stages. Here, competition among potential buyers becomes crucial for maximizing valuation. Structured, disciplined processes, including tight data-room management, controlled information flow, and clear timelines, are essential.
Good preparation makes all the difference
When a company is ready to pursue an M&A process, thoughtful planning is essential. Identifying the right buyers, shaping the narrative, and creating an efficient process can significantly influence outcomes. Typically, a teaser document is shared first to gauge broad interest. Companies that proceed to sign confidentiality agreements, access detailed data, and undergo due diligence before submitting offers.
Management briefings can be pivotal. Founders must balance clarity with opportunity, sharing enough detail to establish credibility while maintaining space for further conversation.
In the end, every deal is influenced not only by data, but by human dynamics and perception.
Final thoughts
For biotech founders, the message is clear: don’t wait to think about exit.
Ownership structure, IP planning, and early relationship-building set the stage for future success. Whether acquisition, IPO, or another exit route, companies that prepare early are best positioned to move confidently when the right opportunity arises.
Watch the full interview to explore these themes in greater depth.
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