Six challenges facing emerging biotechs and how to solve them
Handing over your molecule is a big step for emerging biotechs. The process of developing new drugs is complex and can be fraught with uncertainty. It involves substantial financial investment with a high risk of failure at various stages of development.
Clinical trials are also getting more complex and expensive as they target smaller, more specific patient populations and navigate stricter global regulations. This may be why 83% of pharmaceutical firms confirmed that they use contract research organisations (CROs)for clinical trials and research activities, according to a survey conducted for GlobalData’s State of the Biopharmaceutical Industry report, 2025 Edition, with just over two thirds of these using the services “extensively”. The same survey also found that 33% of respondents would be increasing their level of outsourcing to CROs.
Biotechs are utilising CROs to not only increase efficiencies and access advanced technologies but to also help with regulatory compliance and maintaining flexibility within their operations. Strategic alliances like this are essential for enhancing the overall success of clinical trials and the development of new therapies.
Samir Kagrana is Global Head, Strategic Deals, at Fortrea, a leading global life sciences company and CRO that provides clinical development solutions to emerging biotechs. Kagrana shares his top six challenges and solutions that biotechs are facing today, drawing on over 20 years of experience from within the industry. Kagrana says that solving these challenges requires agility, flexibility and a drug development mindset from CROs.
1. Biotech Outsourcing Strategies: Managing Multiple Vendors Effectively
When emerging biotechs use the common strategy of outsourcing because they have limited internal infrastructure, they often struggle with the complexities of managing multiple vendors. This challenge can lead to inefficiencies and project delays as they fail to successfully integrate data from various sources to help them make informed decisions. Collaborations with full-service CROs can streamline operations, serving as a single point of strategic coordination.
“Typically, the emerging biopharma/biotech don't have sufficient internal oversight structure. For them, a full-service model (FSO) would be ideal,” Kagrana says, adding that CROs can also offer hybrid outsourcing solutions embedding functional outsourcing with project or study level outsourcing for those more established biotechs looking to fill headcount gaps via a flexible, integrated approach.
2. Access to Capital: A Key Challenge for Emerging Biotechs
Historically, biotechs have relied on raising funds in equity markets to finance their research and development (R&D) activities. However, recent shifts in market conditions, including rising interest rates and economic uncertainty, have made fundraising increasingly difficult.
Access to capital remains a significant challenge for many biotech firms, particularly those at the early stages of development. CROs can assist these companies by providing insights into funding and licencing opportunities and facilitating connections with investors who are interested in supporting innovative therapies. Additionally, CROs can help biopharma companies optimise their trial designs to make them more appealing to potential investors.
“Recent geopolitical developments and the uncertain regulatory landscape have pressured several innovative biotech companies (especially those from the Asia-Pacific region) for global capital access,” Kagrana says. “This has led to several companies pursuing a NewCO strategy for cross-border investor participation and mitigation of regulatory and operational risks amidst evolving geopolitical and market dynamics.”
By establishing NewCos, domestic innovative drug companies can engage with overseas investors, expanding their market reach and enhancing operational capabilities. This approach allows companies to leverage the resources, expertise and networks of foreign partners, often essential for the overseas expansion of their product pipelines.
3. Scientific and Clinical Risk in Early-Stage Biotech Development
Scientific and clinical risks are inherent in drug development, with many trials facing potential failures due to inadequate design or execution. CROs bring expertise in trial design and patient recruitment, which can mitigate these risks. By leveraging their flexibility, deep experience and established processes, CROs can enhance the probability of trial success and ensure that companies are better prepared for potential setbacks, combining clinical, medical and commercial perspectives.
Kagrana explains that biotech companies often have a lot of anxiety as stakes are high on success of clinical trials: “They don't want a CRO partner to simply provide a service but to bring a drug development mindset. They want their CRO to think like they are themselves a drug developer, actively bringing the right expertise at the right time and have shared goals whereby CROs also get hit if we don't deliver the project on time and within budget."
4. Biotech Regulatory Challenges: Dealing with Complexity
Navigating the regulatory landscape can be a daunting task, and biopharma companies face a range of challenges in complying with evolving guidelines and successfully leveraging accelerated approval frameworks, particularly for advanced therapies.
With their in-house regulatory know-how, CROs can provide invaluable support in ensuring compliance with local and international regulations. This collaboration can streamline the submission process and reduce the likelihood of regulatory delays, critical for timely market entry. Additionally, CROs can deploy engage regulatory team members, support pre-IND meetings and conduct gap analysis. They can also develop comprehensive strategies and ensure data acceptability across different markets.
5. Biotech Trial Management Across Multiple Countries
Conducting clinical trials across multiple countries adds further layers of complexity with companies having to manage diverse patient population requirements and differing regulatory frameworks. CROs have the necessary infrastructure and local knowledge to manage these trials effectively. They can also help biotechs navigate the intricacies of international regulations and ensure that trials are conducted efficiently and ethically .
“For instance, Fortrea has regulatory experts who have a wealth of experience in US FDA, EMEA, China regulatory or PMDA in Japan,” says Kagrana. “We have a sound understanding about the changing regulatory landscape that sometimes biotechs don’t know, such as strategy, what kind of clinical trials are needed, which are the correct regulatory departments for new product approval, etc., and we can help them.”
Kagrana adds that Fortrea offers not only global regulatory experience but also flexible trial management, technology-driven solutions and a standardised yet customisable approach to managing multi-country trials.
6. Lack of Visibility: A Growth Barrier for Emerging Biotechs
For smaller biopharma companies, establishing visibility in a competitive market can be challenging. The lack of established reputation, relationships and even brand recognition is a significant issue when dealing with clinical trial sites, investigators, patients, caregivers, investors and regulators.
Partnering with a reputable CRO can enhance credibility and attract interest from investors and stakeholders. CROs can leverage existing networks and relationships, provide credible, evidence-based support, demonstrate a successful track record of partnerships and offer comprehensive, transparent services to help build trust through strategic, results-oriented engagement. Additionally, by associating with established CROs, smaller companies can also signal their commitment to quality and regulatory compliance, which can be a significant advantage in building trust within the sector.
In Safe Hands
The six challenges seen here are multifaceted and often interconnected. However, Fortrea's services , including full-service outsourcing and flexible outsourcing models, aim to address these challenges by providing agility and flexibility. They can also assist with regulatory strategy, market access and funding by leveraging their network of private equity and venture funds.
"We are not only a service provider,” says Kagrana. “We actively bring the right expertise at the right time and sharing appropriate risk with aligned milestones, so that biotechs feel their molecule – sometimes their only leading compound – is in safe hands and we have their best interest in mind."
To learn more about the challenges of today’s biotech market and the opportunities for strategic collaboration with CROs, please download the new report below: