Cecropia and Business Growth

The other day I came across the most ornery looking creature I have ever seen. It was 4 inches long, green and covered in blue, yellow, and orange knobs with little black spikes sticking out of each one – absolutely bizarre like some sci-fi genetics experiment gone wrong. This cecropia caterpillar is, however, a well-known bug, and eventually will change into a very large and beautiful moth. The incredible metamorphosis of this guy is similar to how life science companies often evolve their growth strategies.

After struggling with a certain direction or having market conditions radically change, many companies come face to face with very unpleasant possibilities for growth. Some of these companies wilt away, but many re-invent/reposition their business or entire companies to get to where the action is. Here are some examples of metamorphosis in the life sciences.

• Helicos BioSciences is a pioneer in next generation DNA sequencing and moved from a purveyor of instruments to become a molecular diagnostics company, offering their own tests as well as services.

• Pfenex had initially offered its bacterial-based protein expression system for production of biotherapeutics, but now has repositioned it to express a large variety of proteins for early stage and preclinical work.

• Biocept was focused on providing technology for cell isolation but now is developing assays for personalized medicine in early detection, diagnosis and monitoring of cancer

• Similarly OncoMethylome Sciences moved from out-licensing cancer biomarkers to developing their own diagnostic tests for early cancer detection

• The most famous repositioning of all is probably the failed heart medicine turned lifestyle hero – Viagra. This drug repositioning concept is currently a popular approach in the pharmaceutical industry, even having its own dedicated conferences

And it is not just emerging and growth stage companies that change their tune. Companies such as IBM, PerkinElmer, and GE have all evolved their life science strategies, both through acquisitions as well as internal repositioning.

What are the benefits of changing direction and redefining their strategy? Surely one has to first admit that things are not going well (or could go much better). Since wholesale change is not easy there must be a big payback on this:

• Move up the food chain to higher value/margin products

• Get away from crowded segments with vicious competition

• Access larger segments that will continue to grow in size and breadth

• Reduce internal expenses and leverage current technology in new ways

• Make shareholders more optimistic about the future

What can you do next: acknowledge there must be a better way, find the greener grass, and get ready for a big change. Like the knobby, spiky cecropia that will soon become the biggest moth in North America, changing your business or company direction can be a very healthy metamorphosis leading to a much brighter future.