The biotechnology industry is depending increasingly on outsourcing services from R&D and production to staffing and legal. A business that outsources everything has no need for office and laboratory space of it's own, and is referred to as a virtual company.
A virtual company is a company founded on an idea and owing the IP, but not having any other functional activities, no headquarters or office, and, often, one employee – the founder and owner. All R&D, clinical studies, toxicology and production have been outsourced to CSOs and the primary role of the virtual company is to monitor and manage the outsourced activities.
Many new biotech startups are virtual or almost-virtual companies, as they operate on a skeleton staff of entrepreneurs and don’t have the money to hire an entire staff of scientists and other professionals with the expertise to run all aspects of the company. Startups often subcontract out much of their research and development, legal, accounting and other needs. Virtual companies can take this one step further, and licence, or take new products to market entirely, without performing any in-house activities.
