CATEGORY GUIDE

Biotech Manufacturing Strategy: Key Questions Investors Ask & Why They Matter

Manufacturing strategy has become a critical differentiator in biotech funding rounds, directly impacting company valuation and exit opportunities.

This guide helps biotech leaders prepare for investor scrutiny of their manufacturing approach, ensuring your strategy demonstrates both operational maturity and commercial vision.

Why Manufacturing Strategy Matters to Investors

Manufacturing capability has emerged as a key indicator of a biotech’s operational maturity and commercial readiness. While groundbreaking science remains essential, experience shows that even the most promising therapeutics can fail due to manufacturing challenges. Investors have witnessed valuable assets struggle due to process development issues, CDMO capacity constraints, or quality problems—issues that proper manufacturing planning could have anticipated.

Manufacturing typically represents the largest capital requirement in drug development, and problems in this area can quickly drain funding and delay time to market. Investors seek companies that not only understand their manufacturing risks but have concrete plans to address them. A well-thought-out manufacturing strategy demonstrates that a company can translate scientific promise into clinical and commercial reality.

When investors probe your manufacturing strategy, they’re looking beyond technical capabilities. Their questions reveal whether you have:

  • Operational maturity and risk management capabilities
  • Understanding of capital requirements and timeline management
  • Clear path from scientific innovation to commercial reality
  • Readiness for potential acquisition or IPO

To help you prepare for investor scrutiny, here’s a helpful Manufacturing Bingo card. Get expert answers to all these questions and more at CDMO Live 2025.

Key areas of investor focus

The following questions might be asked to probe whether a biotech company has the operational maturity to both deliver their scientific promise to patients and to build shareholder value.

1. Strategic CDMO Partnership

“Which CDMO will manufacture your product and why?” Selection of your manufacturing partner is a critical decision that can determine your program’s success. Investors need confirmation that your chosen CDMO has relevant experience with your modality, appropriate quality systems, and a track record of successful tech transfers.

“Have you secured manufacturing capacity?” In today’s constrained manufacturing environment, a CDMO selection means nothing without committed capacity. Investors need to know you have more than just a theoretical relationship – they want confirmation of reserved manufacturing slots that align with your clinical timeline.

“What’s your backup strategy?” While early-stage biotechs typically work with one CDMO, investors need to know you’ve thought through contingency plans. Your backup strategy demonstrates risk awareness and could include everything from identified alternative CDMOs to trigger points for initiating a switch.

2. Process Development & Scale-up

“What are your current yields?” Your process yields directly impact commercial viability. Investors use this to evaluate whether your therapy can be manufactured at a scale and cost that makes commercial sense, and whether your process is well-controlled.

“Is your process characterised and ready for tech transfer?” Process understanding is crucial for successful tech transfer and scale-up. Investors need confidence that you understand your critical process parameters and have a robust process that can reliably produce quality product.

“What’s your timeline to GMP manufacturing?” GMP manufacturing timeline drives your entire development program. Investors need to see a realistic timeline that accounts for process development, tech transfer, engineering runs, and GMP manufacturing.

3. Economic Viability

“What’s your projected cost of goods?” Manufacturing costs can determine whether a therapy is commercially viable. Investors use COGS projections to evaluate pricing strategy, market potential, and ultimately, return on investment.

“What’s your manufacturing budget through Phase 2?” Manufacturing typically represents the largest development cost. A detailed budget shows you understand the true costs of development and helps investors evaluate your runway and funding needs.

What are your key cost drivers and optimisation strategies?  Cost optimisation strategies demonstrate business acumen.

4. Quality Systems & Regulatory Strategy

“What’s your CMC regulatory strategy and timeline??” CMC issues frequently delay regulatory submissions. A clear strategy demonstrates you understand regulatory requirements and have a viable path to approval.

“How are you managing quality oversight?” Quality problems can derail programs instantly. Your approach to quality oversight shows how you’ll maintain control while working with external partners.

Key resource: Download our Quality Oversight Template

5. Risk Management

“How have you secured your supply chain?” Supply chain disruptions can halt production. Understanding and actively managing your supply chain demonstrates commercial thinking and risk awareness.

“What are your key process risks?” Manufacturing scale-up commonly fails due to unforeseen problems. Identifying risks early shows manufacturing maturity and helps investors evaluate program risks.

6. Commercial Vision

“What’s your commercial manufacturing strategy?” While seemingly early, commercial manufacturing strategy shows long-term thinking. Investors want to know you’ve considered how your therapy will be manufactured at commercial scale and volume.

“How will you scale production to meet market demand?” Scaling strategy demonstrates market readiness, while supply chain planning indicates operational sophistication

Best practices for developing your manufacturing strategy

1. Maintain Real-Time Data Readiness

Investors expect immediate access to current manufacturing data during due diligence. Establish a dashboard tracking key metrics including process yields, batch success rates, and cost trends. Update these metrics monthly and maintain a rolling 12-month history. This demonstrates both operational control and data-driven decision-making capability.

2. Document Strategic Decision-Making

Create and maintain a “manufacturing strategy playbook” that records the rationale behind key decisions. Include evaluations of alternative approaches considered, risk-benefit analyses, and alignment with corporate strategy. This documentation proves thoughtful leadership and helps defend strategic choices during investor scrutiny.

3. Implement Quarterly Strategy Reviews

Schedule formal quarterly reviews of your manufacturing strategy with your management team and key CDMO partners. Use these sessions to:

  • Assess progress against strategic goals
  • Update timelines and resource requirements
  • Evaluate emerging risks and opportunities
  • Adjust plans based on new market information Document these reviews to demonstrate active strategy management to investors.

4. Maintain Competitive Intelligence

Develop a systematic approach to monitoring industry manufacturing trends, including:

  • Regular attendance at industry conferences
  • Subscription to relevant market intelligence services
  • Analysis of competitor manufacturing approaches
  • Tracking of new manufacturing technologies Use this intelligence to ensure your strategy remains competitive and forward-looking.

5. Cultivate Strategic CDMO Relationships

Transform CDMO relationships from transactional to strategic by:

  • Establishing regular executive-level communications
  • Creating joint development initiatives
  • Building long-term capacity planning frameworks
  • Developing shared performance metrics Strong CDMO relationships can be a significant asset during due diligence.

Watch this video explaining drug development timelines and planning for biotechs:

Red Flags that concern investors

1. Inadequate Manufacturing Capacity Planning

The absence of committed manufacturing slots or reliance on verbal agreements raises serious concerns. Investors expect to see:

  • Signed capacity agreements aligned with clinical timelines
  • Documented contingency plans for additional capacity
  • Clear understanding of lead times and capacity constraints

2. Poorly Defined Process Development Pathway

A vague or overly optimistic process development timeline suggests operational naivety. Red flags include:

  • Missing technical milestones
  • Unrealistic timeline assumptions
  • Lack of clear success criteria
  • Insufficient resource allocation

3. Unrealistic Cost Projections

Cost projections that appear overly optimistic or lack proper substantiation undermine credibility. Watch out for:

  • COGS estimates significantly below industry norms
  • Missing cost elements in projections
  • Insufficient scaling factors
  • Lack of sensitivity analysis

4. Weak Quality Management System

A robust quality system is fundamental to manufacturing success. Concerning signs include:

  • Unclear quality oversight responsibilities
  • Insufficient quality staffing plans
  • Missing quality agreements with CDMOs
  • Lack of quality metrics and monitoring

5. Insufficient Risk Management

Inadequate risk planning suggests lack of operational maturity. Red flags include:

  • Missing risk assessment documentation
  • No formal risk mitigation strategies
  • Lack of supply chain risk analysis
  • Insufficient business continuity planning

6. Limited Commercial Vision

Lack of commercial manufacturing planning raises questions about long-term thinking. Watch for:

  • No clear scale-up strategy
  • Missing commercial site selection criteria
  • Undefined technology transfer approach
  • Lack of commercial capacity planning

Essential Documentation for Due Diligence

It is recommended that you prepare and maintain the following documentation, so it’s always available to answer questions:

  • CDMO selection criteria and evaluation matrix
  • Manufacturing capacity agreements and commitments
  • Process development roadmap and timeline
  • Quality oversight framework
  • CMC regulatory strategy document
  • Manufacturing budget and COGS analysis
  • Risk assessment and mitigation plans
  • Commercial manufacturing strategy

A well-articulated manufacturing strategy is essential for fundraising success. It demonstrates to investors that your company can translate scientific innovation into commercial reality while managing risks and capital efficiently. By preparing thoroughly for manufacturing-focused due diligence, you strengthen your position in funding discussions and build credibility with potential acquirers.

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