Biorepositories: The Buy vs. Build Decision

About the author: Alex Gelman is the Managing Partner of Poplar Partners, an investment firm looking to acquire a company in the biorepository space. Before founding Poplar Partners, he worked at KKR Capstone, the operating arm of private equity firm Kohlberg Kravis and Roberts, and at McKinsey &Co. He has an MBA from the Stanford Graduate School of Business and a BA from Dartmouth College.

The Buy vs. Build Decision

I’m not sure if the conference organizers planned it in such a way, but my big takeaway from Thursday afternoon was “Do I buy or build my biorepository?”.  Stephanie Johnson from Genentech told us about the unique challenges of building an in-house biorepository at Genentech. This largely involved creating expertise around the areas of procurement and keeping the collection stocked. Kathi Shea, from Precision for Medicine, surprisingly, told us about when we should build an in-house biorepository. And a panel consisting of Lori Ball, from Biostorage Technologies, John Coolidge, from Masy Systems, and Garth McGrath, from Celgene, made the case to outsource. Each speaker had a different take on the buy versus build decision, but I really liked Lori Ball’s framework for coming to an answer. Lori proposed three fundamental questions to decide when to outsource a biorepository:

• ¬ What is your primary goal?
• - Is it better control of samples, improved profitability, or resource reallocation?
• ¬ What is your core competency?
• - Is my core competency in R&D, laboratory testing, or sample management?
• ¬ What is driving your decision?
• - Is it a need to decrease time to market, a need to mitigate risk, or a need to reduce my operating budget?

Perhaps the answers to these questions are not mutually exclusive. But these are the type of questions that need serious contemplation before focusing on the logistical design/engineering of the laboratories or storage areas associated with one’s biorepository. For many, outsourcing biostorage needs offer incredible benefits to managers by allowing more time to focus on researching new molecules and developing safer medications. For others, outsourcing is an inconvenience that makes researchers uneasy about where there samples are. In short, understanding the needs and limitations of one’s biorepository is essential to maximizing your organization’s goals.

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