Summary of Key Points
This news article highlights a harsh reality through the failures of three biotech companies (Iterum, Karyopharm, and Theravance): even when innovative pharmaceutical companies reach the commercialization stage and are able to sell their products for profit, they can still face cash flow crises due to poor product sales or the failure of subsequent research and development (R&D) initiatives, leading to bankruptcy or acquisition. Commercialization is not the endgame; sustained and irreplaceable innovation is the foundation for a biotech company's survival.
1. Commercialization Is Not a Lifeline; It Can Accelerate Death
Many people assume that “launching a product means making money,” but in reality, the commercialization phase requires additional expenses (for building sales teams and conducting marketing campaigns). If the product does not sell well, the investment and returns become severely imbalanced, quickly dragging the company down. For example, Iterum’s antibiotic Orlynvah was approved in 2024, and it took nearly a year to prepare for market release. However, in August 2025, sales were only $400,000, while marketing costs amounted to $6.5 million—less than a fraction of the sales revenue. Within less than eight months, the company’s cash reserves were depleted, and it eventually filed for bankruptcy.
In simple terms: It’s like opening a restaurant: you spend $100,000 on renovation and hiring staff, but only make $10,000 in the first month, and you can’t sustain operations long.
2. Betting on a Single Product Is Like Gambling Your Life
Many biotech companies invest all their resources in one product. If that product fails, the company is doomed. Iterum placed all its hopes on Orlynvah, assuming there would be high demand and no competition, but sales fell far short of expectations, and no one was interested in purchasing the product rights. Karyopharm’s Xpovio was the world’s first XPO1 inhibitor, but its efficacy was inferior to later CAR-T therapies (which can cure 97% of patients, compared to Xpovio’s 25%), and it had significant side effects (19% of patients discontinued treatment). Sales have remained stagnant at just over $100 million per year for six years. Moreover, without developing new products, Karyopharm’s high sales expense ratio (72% of sales revenue went to marketing) led to increasing losses, and the company is now facing loan defaults.
In simple terms: It’s like a gambler betting on a single number; a win might bring instant wealth, but a loss means total ruin.
3. Failing to Keep Up with R&D Means Having to Sell Out
Some biotech companies with stable commercial revenue still face acquisition if their R&D efforts fail. Continuing to invest in R&D could deplete their cash reserves. Theravance, for example, had a successful drug (Yupelri) for COPD, generating annual sales of $267 million in the U.S. in 2025, with a 35% net profit, and it also received milestone payments from GSK. However, the failure of its core drug, ampreloxetine, in two Phase III trials left the company with no future prospects. To avoid burning out its cash, Theravance shut down its R&D department and laid off employees before being acquired by Zymeworks.
In simple terms: It’s like a small business that makes some money but fails to expand; rather than losing all its capital, it’s better to sell the business.
4. The Way Successful Biotechs Survive: Using Revenue from Successful Products to Fund New Innovations
A few biotech companies that survive and grow do so by using the profits from their successful products to fund new R&D initiatives, creating a virtuous cycle. For instance, Regeneron experienced multiple failures in the first 20 years but became a major pharmaceutical company when its drug Avastin (for eye diseases) became a blockbuster.吉利ard and Pfizer also grew by relying on one successful drug and then developing others.
In simple terms: It’s like starting a successful restaurant and using the profits to open more branches and develop new dishes, gradually becoming a chain.
5. Lessons for Domestic Biotechs in China
Given the current challenging financing environment, domestic biotechs should not blindly pursue independent commercialization. They need to understand that the purpose of commercialization is to fund R&D, not to prove their ability to sell products. They should diversify their product pipelines to reduce risks. If R&D hits a bottleneck or cash flow is tight, partnering to sell existing products or being acquired are rational options to ensure survival and the opportunity for continued innovation.
In simple terms: For startups, the priority is to avoid bankruptcy before considering how to expand and become stronger.
In Conclusion
The lifeline for biotech companies is not product launch; it’s the ability to sustain continuous innovation and maintain stable cash flow. Commercialization is just a means to develop innovative drugs that others cannot. Only by doing so can they truly establish themselves in the industry.