Biotech companies today face a delicate balancing act: communicating innovation early enough to build credibility and momentum, while avoiding regulatory and commercial risks that can undermine long-term value. This tension is most evident in how companies talk about emerging science, real-world evidence (RWE) and intellectual property (IP), particularly where off-label use and substitution risk may arise. Data shared without sufficient context can unintentionally encourage clinical behaviours that outpace regulatory approval, while poorly aligned IP and communication strategies can weaken differentiation before a product reaches the market. As a result, responsible communication has become a strategic discipline in its own right, sitting at the intersection of scientific ambition, regulatory expectation and commercial reality.
A question has increasingly been raised in the life sciences sector about innovation alongside regulatory and commercial risks and the interplay between several connected issues that sit at the heart of modern biotech development and communication:
- How biotech companies can educate the market about innovation without creating off-label risk or losing narrative control
- Why IP strategy is becoming a signal of scientific credibility rather than simply a legal safeguard
- What determines whether “first-in-class” biology successfully survives clinical and commercial translation
- And how the role of RWE in drug development is evolving and why it should no longer be seen as a shortcut
Taken together, these issues highlight that today, innovation is not only judged by novelty, but by whether it is communicated, protected and translated in a way that supports long-term clinical and commercial viability.
Innovation, overlap and the modern patent environment
One of the core issues underpinning these challenges is the sheer scale of global innovation. In the United States alone, over 300,000 patents are granted each year[i], with a further 200,000+ in Europe[ii].
In pharmaceuticals and biotechnology, where academic laboratories and research institutions operate in parallel with commercial organisations, cross-fertilisation of ideas is common, especially through scientific publications and medical conferences. While the rewards for being first to patent remain significant, the practical reality is that few inventions now sit in complete isolation.
As a result, IP strategy has taken on a broader role; it must credibly support a development pathway and a differentiated product position. In that sense, IP increasingly functions as a marker of scientific and strategic discipline, not just legal protection.
RWE and the origins of off-label risk
These issues become particularly acute when RWE is introduced into the equation as it will often be derived from the use of a prior-art product, frequently one that is off-patent or off-label. The data generated by such products is generally free to use, just as the products themselves may be freely prescribed.
If RWE is used to expand the regulatory scope of an approved product, off-label risk may be relatively contained. However, where third-party products are involved in generating that evidence, the likelihood of off-label use increases significantly.
In those circumstances, RWE can unintentionally enable substitution. A product that is not approved for a given indication may nonetheless be perceived as clinically interchangeable, particularly if the narrative around the data is not carefully controlled.
To avoid that outcome, the innovator must be able to bring to market a product that can benefit from the insights generated by RWE without inheriting the same regulatory footprint as the product that generated the data. If that distinction is not clear, the risk of off-label substitution can become severe.
Differentiation as the primary defence
Managing that risk requires more than reliance on formal IP rights. The innovator must be able to articulate, clearly and credibly, why the approved product cannot simply be substituted by an off-label alternative.
This may include differences in formulation or strength, differences in molecular structure, genuine safety concerns, or other clinically meaningful distinctions that prevent direct substitution. The burden is not simply legal, but educational.
The principal defence is therefore not litigation, but differentiation. The real risk posed by substitution is patient harm, whether through reduced efficacy, safety concerns or inappropriate dosing. While threats of patent infringement or data protection claims may deter large institutional actors, they have limited impact on the hundreds or thousands of individual prescribers and dispensers who collectively drive off-label use.
IP strategy as a credibility signal
A credible IP strategy today involves more than securing patent protection where possible and data protection where available.
Increasingly, stakeholders view IP portfolios as a proxy for scientific seriousness. A well-constructed strategy signals that the innovator understands not only the invention itself, but the broader ecosystem in which it must operate.
RWE versus controlled clinical trials
There is also a tension between the expanding use of RWE and traditional clinical trial design. Historically, RWE has been used to support second medical uses for older drugs or to justify range extensions into closely related disease areas. What is now emerging is a more ambitious use of RWE as a potential alternative, or complement, to Phase III clinical trials. In some cases, RWE reviews may draw on datasets containing 100,000 patient records or more. By comparison, a Phase III trial might enrol 5,000 patients.
However, the apparent scale of RWE can be misleading. RWE is inherently retrospective. The data exists in whatever form it was collected, often without the controls built into prospective trials. Confounding factors must be identified and resolved before conclusions can be drawn. In practice, this may mean excluding significant portions of the dataset or treating results as indicative rather than definitive.
As a result, a carefully controlled trial involving a smaller cohort may produce more powerful and reliable evidence than a much larger RWE analysis.
Is RWE really a shortcut?
One perceived advantage of RWE is that endpoints can be specified after the data has been collected, reducing the risk associated with committing to endpoints before outcomes are known. By contrast, traditional trials require endpoints to be fixed in advance, creating a degree of uncertainty.
However, the need to address confounding variables and potential bias in RWE datasets increasingly offsets it. The analytical complexity involved can be substantial, and the regulatory scrutiny applied to such analyses continues to increase.
As a result, RWE should no longer be viewed as an easy or guaranteed shortcut. It can be a powerful tool when used appropriately, but it demands rigour, transparency and restraint.
First-in-class does not guarantee success
Whether a first-in-class drug ultimately reaches the market is largely determined by economics.
All commercial drug development is driven by: the durability of the protected market, pricing and reimbursement dynamics and the availability of substitutable products, including off-label alternatives. Being first-in-class may secure early attention, but it is rarely sufficient on its own.
First-in-class biology earns a place on the starting grid. From there, traditional factors take over. Market opportunity must justify the cost and time required for development, and regulatory success depends on demonstrating superior safety, efficacy or both.
Novel biology may be the entry point, but it is not a guarantee of success. Many better products follow earlier innovations, but without the first step there would be nothing to improve upon.
Conclusion
The responsible communication of innovation has become a central strategic issue for biotech companies. Poorly judged disclosure can create regulatory exposure, undermine IP value and enable off-label substitution long before a product reaches its intended market.
RWE, IP strategy and clinical development are no longer separate considerations. They form an integrated system in which credibility, discipline and differentiation determine whether innovation translates into durable value.
In this environment, the challenge is not simply to innovate, but to communicate innovation in a way that supports patients, regulators and long-term commercial success.
Author Profile
Laurence Cohen is Director and General Counsel at Celex Oncology. Cohen is a former IP litigator who has been mentoring biotech start-ups for over 10 years. A graduate in Natural Sciences and Law from the University of Cambridge, he spent his early career dealing with the patent problems arising from successful pharma and biotechnology developments as they came to market. Cohen rose to be a global co-chair of Latham & Watkins IP group. He has also provided support for merger & acquisitions and licensing transactions. He co-founded Celex Oncology, having met the original founder in 2013 and immediately realising the exceptional potential of the science. Since then, he has been working with the Celex Oncology team to build the company, leading to the undertaking of clinical trials and successful progress from drawing board to market.
