A third of small-to-mid-cap biotech firms are becoming profitable, with cash reserves projected to soar from $15B in 2025 to over $130B by 2030. This financial strength, combined with large-cap patent expirations, positions them not just as acquisition targets but as potential players in the M&A landscape themselves.

The pharmaceutical industry is often misunderstood because it communicates through faceless corporate entities. It could learn from tech's "go direct" strategy, where leaders tell compelling stories. Highlighting the scientists and patient journeys behind breakthroughs could dramatically improve public perception and appreciation.

The biotech sector lacks mid-cap companies because successful small firms are typically acquired by large pharma before reaching that stage. This creates a barbell structure of many small R&D shops and a few commercial giants. The assets, not the companies, transition from small to large.

Small firms can outmaneuver large corporations in the AI era by embracing rapid, low-cost experimentation. While enterprises spend millions on specialized PhDs for single use cases, agile companies constantly test new models, learn from failures, and deploy what works to dominate their market.

Well-funded startups are pressured by investors to target large markets. This strategic constraint allows bootstrapped founders to outmaneuver them by focusing on and dominating a specific niche that is too small for the venture-backed competitor to justify.

Denmark's leadership in biosolutions is not accidental. It's built on a unique ecosystem combining a cultural heritage in fermentation, patient capital from large foundations like Novo Nordisk, and a dense collaborative network connecting universities and companies of all sizes.

When starting out, don't try to out-expert established players. Instead, compete on access and personal attention. Acknowledge your small size and frame it as a benefit: clients get direct access to you, the founder, which is something large competitors cannot offer.

To avoid the pitfalls of scale in R&D, Eli Lilly operates small, focused labs of 300-400 people. These 'internal biotechs' have mission focus and autonomy, while leveraging the parent company's scale for clinical trials and distribution.

Top compounders intentionally target and dominate small, slow-growing niche markets. These markets are unattractive to large private equity firms, allowing the compounder to build a durable competitive advantage and pricing power with little interference from deep-pocketed rivals.