How Life Science Companies are Extending their Budgets in 2024

Seven ways the life science companies are achieving a lean growth mindset amidst the start of another year of uncertainty.

By Chris Frew | February 8, 2024

BioBuzz has been connecting the life science workforce since 2009. We’ve built an expansive community in the Mid-Atlantic with a national readership that spans from Massachusettes to Florida, and New York to California. For our next chapter, we’re building a proprietary talent logistics model to help employers source and hire life science talent. Learn more.

As the industry puts a year of unprecedented challenges behind it, many still look to the future with uncertainty, or at best, cautious optimism. Companies are still figuring out how to adjust to a new normal after making it through 2023 which brought 10,000+ layoffs, record-low investment levels, dismal conditions for initial public offerings (IPOs), and a capital market tightening its purse strings.

Now organizations within this vibrant, yet capital-intensive industry, find themselves at a critical juncture. These macroeconomic headwinds have not only tested their resilience but have also sparked a remarkable shift in strategy. Now, more than ever, life science organizations are being compelled to rethink their approach to risk and financial management, opting for outsourcing and more creative strategies. The stakes are high, and the need for adaptability and innovation has never been more pressing.

As the financial landscape grows increasingly complex, these companies are not just surviving; they are ingeniously thriving. We wanted to explore this transformation further by delving into seven pivotal strategies that life science organizations are employing in 2024 to extend their budgets further than ever before. 

Strategy 1: Flexible Lab Space

Flexible lab space tops the list as one of the most strategic and cost-effective approaches. Companies of all shapes and sizes benefit from the financial prudence exercised through flexible lease options, ranging from as brief as six months to longer, tailored durations.

The adaptability that flexible lab space provides allows organizations to scale their physical footprint in sync with their growth trajectory, ensuring operational efficiency without sacrificing quality or innovation potential. This design allows rapid adaptation to changing research needs, minimizing downtime and optimizing resource utilization. The ability to reconfigure workspaces and equipment fosters collaboration, enhancing communication among researchers and teams.

Companies benefit from cost efficiency, as they can avoid extensive renovations when research priorities shift. The agility provided by flexible lab spaces supports shorter time-to-market, aiding in staying competitive. This approach attracts top talent who value dynamic work environments and mitigates risks associated with evolving market conditions. Scalability, efficient space utilization, and the overall adaptability of the facility make flexible lab space an advantageous strategy for companies aiming for innovation and competitiveness in their respective industries.

I-270 Innovation Labs in Frederick, MD, emerges as a strategic ally for companies that need to grow or expand a new program but aren’t ready for a large lease commitment. This unique facility is a beacon for startups, small to medium-sized companies, and any company aiming to gain a foothold in the BioHealth Capital Region without the financial burden of long-term leases or the commitment to extensive lab spaces prematurely.

Members also benefit from an all-inclusive rental package that encompasses not just the essentials—like WiFi and utilities—but also comprehensive access to cutting-edge lab equipment, collaborative workspaces, and a suite of services critical to research and development endeavors. These include DI water, biohazard waste disposal, autoclave, and glass wash services. By providing a supportive infrastructure that caters to the immediate needs of life science and tech companies, I-270 Innovation Labs stands out as a resourceful means to judiciously manage financial resources while fostering innovation and growth in a demanding economic landscape.

Strategy 2: Hyper-Virtual Outsourcing

The hyper-virtual model is revolutionizing the biopharmaceutical industry, offering startups a pathway to enhanced efficiency and accelerated market entry that de-risks commercialization. Companies who use this model will realize the cost savings over the life of their commercialization journey by avoiding costly miss-steps and setbacks and achieving a faster time to market.

A leader of this innovative approach is Kymanox, a company that has honed a highly efficient, outsourced business model for their clients for over two decades. This model, distinguished by its minimalistic employee structure and reliance on external expertise, emphasizes the critical elements of vision, decision making, and accountability. It allows startups to remain agile and focused on their core strengths, with Kymanox leading the charge in demonstrating the model’s effectiveness. Stephen Perry, CEO and Founder of Kymanox, encapsulates the philosophy of the hyper-virtual model as a strategy of “doing more with less,” leveraging external talents and resources to achieve unprecedented operational efficiency and success in the competitive biopharma landscape.

The ascendancy of the hyper-virtual model within the biopharmaceutical sector signifies a transformative shift in startup methodologies for product development and market entry. Emphasizing speed, operational efficiency, and judicious outsourcing, this model equips startups to traverse the intricate terrain of biopharma with unprecedented agility and precision. As the hyper-virtual model solidifies its presence, it’s poised to actively shape the narrative of biopharmaceutical progress. Its growing adoption underscores a future where flexibility, efficiency, and strategic collaboration are the hallmarks of success, heralding a new era of innovation and commercial achievement in the life sciences.

Strategy 3: Budget-Friendly Lab Equipment 

The strategic utilization of equipment rentals and the procurement of second-hand lab equipment have emerged as invaluable tactics for cost containment. This approach enables companies to access the latest technological advancements and essential laboratory tools without the substantial capital outlay typically associated with purchasing new equipment.

Founded in 2008, BaneBio is a domestic and global provider of new and pre-owned laboratory equipment, supplies, and services to include PM Service plans, lab relocation, equipment acquisition, equipment consulting, lab equipment repair and testing, and manufacturer’s certification available along with appraisals and logistics management. 

By opting for rental agreements or investing in pre-owned, quality-certified apparatus, organizations can significantly reduce their operational expenses. This not only alleviates financial pressures but also enhances flexibility and adaptability in research and development activities. The ability to scale up or down based on project needs without committing to long-term investments allows these companies to remain agile and competitive, even in an era of tightened purse strings. Leveraging these cost-effective solutions empowers life science entities to continue pioneering innovations while navigating the economic challenges of 2024 with resilience and strategic foresight.

Strategy 4: Training & Up-Skilling Researchers

Life science organizations are increasingly turning to up-skilling and training as a strategic solution. Bio-Trac® workshops are a great example of this in action. Companies and research institutions across the globe have trusted Bio-Trac®  for 30 years to provide their bench and research scientists with focused training on the latest relevant techniques necessary for laboratory research, from RNASeq to Flow Cytometry, and CRISPR/CAS-9, NGS, Python, Mammalian Cell culture, and more.

Organizations that invest in enhancing the skills of existing research and technical staff, receive a dual advantage.

First, it fosters a culture of growth and learning within the organization, significantly boosting employee loyalty, satisfaction, and retention, and reducing turnover rates and the associated costs of recruiting and training new hires. This not only helps maintain a stable and experienced workforce but also strengthens the organizational knowledge base.

Second, up-skilling serves as a cost-effective alternative to expanding the workforce prematurely. By equipping current employees with new skills and competencies, companies can diversify their research programs and explore new avenues without the immediate need for additional hires. This approach enables organizations to remain agile and lean, adapting to market demands and opportunities with greater flexibility. The investment in professional development means that when the time comes to scale operations, the foundation is already laid with a team capable of tackling complex challenges and driving innovation.

Strategy 5: Flexible, On-Demand Hiring Solutions

BioBuzz’s new Talent Lab, a cutting-edge talent marketplace tailored for the life science sector, stands as a transformative resource for companies aiming to navigate the complexities of staffing and budget management more effectively. This innovative platform addresses a critical need within the industry for flexible, on-demand talent acquisition, enabling organizations to access a pool of skilled professionals ready to contribute to projects with their expertise – faster and saving 20-50% from traditional staffing companies or high-priced consulting firms.

The Talent Lab facilitates a direct connection between life science companies and a diverse array of talent, from research scientists to project managers and beyond, who can be engaged on a project-by-project basis, part-time, or even hired directly. This flexibility allows companies to scale their workforce up or down as needed and build pipelines of talent, ensuring that they can respond agilely to fluctuating workloads, project demands, and budgetary constraints. By leveraging the Talent Lab, companies can avoid the overheads associated with recruitment, training, and retaining full-time staff, instead opting for a cost-effective model that matches their immediate needs.

Moreover, the Talent Lab serves as a strategic tool for companies looking to innovate and stay ahead in the competitive life science landscape. Access to a broad spectrum of talent means that companies can quickly bring in specialized skills and fresh perspectives necessary for pioneering research, development projects, or entering new markets. This ability to tap into a ready-to-deploy workforce not only accelerates project timelines but also significantly reduces the risks and costs associated with talent acquisition and development.

Strategy 6: Integrated Facility Design-Build Construction

There is probably no greater expense for a new company than building a custom-new facility or retrofitting a facility to meet its complex research, development, and production needs. When we think of companies that help to reduce the burden on these endeavors, PROTECS stands at the forefront as a pioneer in an evolved project delivery method known as Leveraged Design-Build. This approach has emerged as a beacon of efficiency and cost-effectiveness in the construction of new facilities, responding adeptly to the rapidly changing business models and operational requirements that characterize the life science industry.

Traditional project delivery methods, such as Design-Bid-Build, have increasingly shown their limitations, often leading to budget overruns, delays, and a lack of transparency and collaboration. In contrast, PROTECS’ Integrated Design-Build model represents a significant leap forward. By fostering a more transparent, collaborative process, this method significantly reduces the risks and burdens typically shouldered by owners, brokers, tenants, and landlords. The streamlined approach integrates design and construction phases, enabling faster project completion, greater cost control, and enhanced communication among all stakeholders.

The success of the Integrated Design-Build method has been proven through consistent project successes and the repeat business of satisfied clients. This model’s ability to adapt to the unique needs of the life science sector, ensuring that facilities not only meet but exceed the performance requirements of today’s high-innovation companies, marks it as a crucial strategy for organizations aiming to optimize their operational efficiency while keeping a tight rein on budgets. As life science companies navigate the complexities of growth and innovation, the Integrated Design-Build approach by PROTECS offers a compelling blueprint for success.

From leveraging technology and forging strategic partnerships to embracing virtual clinical trials and more, we uncover the ingenuity at play in navigating these turbulent times.

Join us as we embark on a journey through the adaptive measures and forward-thinking practices that are defining the future of the life sciences sector. In doing so, we not only shed light on the resilience of these organizations but also offer valuable insights for others navigating similar challenges across industries. The lessons learned and the strategies adopted in the face of adversity are a testament to the indomitable spirit of innovation that drives the life sciences forward, even in the most challenging economic climates.

Strategy 7: Fractional Executives

In the often unpredictable landscape of startup growth, managing resources efficiently while strategically positioning the company for success is paramount. One innovative solution that has emerged as both a cost-saving measure and a strategic asset is the engagement of fractional executives. This approach allows startups to harness the expertise of seasoned professionals, such as CFOs, without the financial commitment required for full-time positions.

LedgerMark is one company that has proven this model time and time again and has become a strategic ally to many startups in the life science and technology sector. Founded in 2018, LedgerMark brings fractional CFO advisory, as well as a team of professionals who integrate with your company to become a member of your team to help support much of your administrative and financial needs.

The strategic value of a fractional CFO, for instance, cannot be overstated. During fundraising efforts, the presence of an experienced CFO can significantly enhance a startup’s credibility and appeal to investors. These executives bring a wealth of knowledge and a network of contacts, along with the ability to craft compelling financial narratives and strategies that resonate with potential backers.

Furthermore, by optimizing financial operations and providing guidance on budget management, a fractional CFO helps ensure that startups not only survive but thrive, laying a solid foundation for future growth. This model thus represents a judicious approach for startups aiming to maximize their resources while benefiting from executive-level expertise and guidance.