Slightly off topic but its interesting that Moderna's market cap is $38bn and Zoom's market cap is $113bn. Obviously Moderna's vaccination directly saves life's and has much more impact than Zoom. A sign of the times/market we live in.
$38bn ain't bad for a company without a single product released for the past 10 years.
Biotech startups are longer term things than software startups. Typically, your product doesn't get to the market until years 10/12 of the business. This is due to the regulatory issues like with the FDA or the EMA and other countries. Critically, that approval to be on the market or not is made near the end of those 10/12 years.
So, yes, you bust your butt to get the business going for a decade or more and then the regulatory agency decides if it can be sold[0]. Many other biotech people complain about this (and rightly so!), but I personally feel that this is the 'lesser evil'. We do not want pacemakers, knee joints, or pharmaceuticals to be developed like exercise equipment.
That said, the new product is likely to be a new market entirely, and one that you now have a near total monopoly on.
Like with any start-up, it's a risk/reward calculation. And biotech tends to be a high risk business, thus leading to high rewards that are economic, psychological, and spiritual.
[0] To be clear, this is a very complex process, and I have simplified it down. Each business and use case is very different.
I am always confused how an investor should approach investing in the biotech space without any medical knowledge. Any thoughts you can share?
Too much time and too many grey hairs from following the hope-and-disappointment cycle as you read the tea leaves from ambiguous trial results and FDA announcements.
https://en.wikipedia.org/wiki/Mesoblast
You're not kidding, they have been a roller-coaster!
Admittedly that will most likely be a slog. But realistically you need a deep understanding of the molecular/biological context when investing in this space to understand whether or not a drug will be successful.
I worked for a YC biotech (S18) this last year in a scientific role, but bridging the gap between investor to startup has been something I've been thinking about as a possible career in the future...
The science part isn't always hardcore mol-bio, as many devices can be a bit more like traditional engineering (even internal ones). But many of the problems that the various agencies will cite will be mol-bio related. Even as a hardcore investor, unless you have the many years of background, or can get people with background to put their own money in it, you are going to have a hard time. Paying just for consulting isn't likely to be appropriate due-diligence. Biology is monstrously complex and frustrating even in one individual, let alone a population. As such, it takes a lot of research to have a good clue of what is going on, more so that you can likely pay consultants for.
EDIT: Again, I want to stress that every situation is different and that I am only relating my personal experiences here.
It also says something about the in incentives that drug companies trying to maximize market cap have.
biotech needs to pay market salary for employees and then they'll rich good market cap.