In the competitive landscape of biotech entrepreneurship, intellectual property is not merely a legal formality—it is often the most valuable asset a young company can own. In a recent webinar hosted by Michalski Hüttermann & Partner, Senior Partner Dr. Ulrich Storz shared key insights from his work on two biotech startups that each secured Series A funding in excess of €50 million within the same year. The secret? Smart, strategic IP planning.
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This article summarizes the core lessons of the webinar and explains how startups—especially in the biotech sector—can leverage patents not just for protection, but as a driver of valuation, investment, and success.
Why Patents Matter in Biotech
While patents are essential across many industries, their strategic value in biotech is particularly high. As Dr. Storz pointed out, in the early years, a startup’s only tangible assets may well be its patents. This is not just a cliché—it reflects the reality of capital markets, where well-crafted patent portfolios often act as gatekeepers for investor interest.
Patents in biotech do more than secure exclusivity. They:
- Help attract seed and Series A-C investments.
- Serve as the basis for licensing deals or exits.
- Enable negotiations with big pharma.
- Extend the commercial life of a product, particularly in the critical last years of market exclusivity.
Defining Your Patent Strategy: Start with the End in Mind
According to Dr. Storz, every successful patent strategy starts by answering two fundamental questions:
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What is your starting point? (e.g., a novel molecule, a repurposed compound, or an innovative platform technology)
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What is your end goal? (e.g., licensing, IPO, acquisition, or becoming a long-term market player)
With these goals defined, startups can tailor their IP strategy. A staggered, multi-layered approach—protecting not only the core compound but also formulations, dosage regimens, and second medical uses—can extend exclusivity and multiply valuation.
The Country List Dilemma: Where Should You File?
Patent filings can become expensive fast, especially during the transition to the national phase around month 30 of the PCT timeline. One of the most critical—and hotly debated—questions is: In which countries should you seek patent protection?
Dr. Storz presented a data-driven model that compares national prosecution costs with market size based on World Bank and IMF data. The takeaway? More expensive markets like the U.S. often provide better value for money than smaller, high-cost jurisdictions (e.g., Costa Rica or Macau, despite anecdotal reasoning about medical tourism).
He emphasized reproducibility in decision-making—advising startups and in-house counsel to rely on metrics, not anecdotes, when building a filing strategy.
Common Pitfalls and Case Studies
Dr. Storz illustrated several real-life case studies—both successes and cautionary tales—that underscore the importance of strategic IP management:
- Case 1 & 2: Two biotech startups secured €55M and €65M Series A rounds, respectively, after developing staggered patent strategies and carefully timing national phase entries.
- Case 5-7: Spin-offs from universities faced significant challenges due to poorly negotiated licensing agreements, narrow country lists, or premature disclosures by university professors.
- Case 8: A startup nearly went bankrupt under the weight of excessive maintenance fees for second-generation patents that added little competitive value.
The key message: IP filings must be aligned with business objectives and financial realities. More is not always better.
File First, Publish Later—But Keep Filing
The webinar also highlighted the importance of filing provisional applications for even minor improvements during the priority year. Using the CRISPR-Cas9 litigation saga as an example, Dr. Storz illustrated how failing to include a key technical element (the PAM site) in the earliest filing cost one applicant their priority claim.
Inventors must be educated that IP protection is not a one-time act but an ongoing process—particularly in fast-moving scientific fields.
Conclusion: Strategic IP = Strategic Value
If you are launching or scaling a biotech startup, treat your patent portfolio not as an afterthought but as a cornerstone of your business model. As shown by the success stories discussed in the webinar, thoughtful and timely IP strategy can make the difference between a modest valuation and a blockbuster deal.
At Michalski Hüttermann & Partner, we have helped biotech clients secure deals worth between €500,000 and €1.2 billion. With over 80 patent oppositions handled in the biotech and pharma sectors and deep experience in prosecution across 30+ countries, we are uniquely positioned to support startups from lab bench to boardroom.
Need Support for Your Biotech IP Strategy?
Contact Dr. Ulrich Storz to learn more about how we can help you craft a patent strategy that attracts funding and protects your innovations.
