Biotech Due Diligence: How to De-risk Drug Assets
- 24th April 2026
- Posted by: Breige McBride
- Category: Uncategorised
Approximately 70% of new drugs fail to advance beyond Phase II (Zhou et al.,Nature Communications, 2025) where proof-of-concept is established. This statistic represents billions in losses, highlighting how critical it is to make the correct investment decisions. For investors, a key challenge in biotech due diligence is identifying and discontinuing flawed targets quickly, as evidenced by a 2022 analysis which found that lack of efficacy accounts for up to 50% of clinical drug development failures, with inadequate target validation identified as a key underlying cause (Sun et al., Acta Pharmaceutica Sinica B, 2022).
The challenge is clear: How do you identify and discontinue flawed targets quickly and cheaply, while de-risking promising ones before significant capital is committed?
Why target validation matters for investment decisions
Target validation assesses whether a biological target is genuinely implicated in a disease and whether modulating it will produce a therapeutic effect. It happens at the preclinical stage, before the large expenditures of clinical trials, begin. A Phase II trial can cost upwards of £20 million and take 2-3 years. When half of these failures stem from poor target selection, the case for rigorous upfront validation becomes compelling. While target validation doesn’t eliminate all downstream risk, it removes one of the most common and costly sources of failure before significant capital is invested.
Companies presenting assets for investment naturally frame their science in the most favourable light. Pitch decks can emphasise promising preclinical data while ignoring critical questions about target biology. Effective biotech due diligence therefore depends on independent analysis. By leveraging publicly available databases and applying rigorous biological expertise, investors can validate claims and uncover risks that may not appear in company presentations.
Introducing Target Triage: Data-driven target assessment
Fios Genomics’ Target Triage service delivers exactly this: a consolidated, evidence-based assessment of drug targets across key areas that standard investment due diligence often overlooks.
What Target Triage evaluates
Disease association
What is the strength of evidence linking this target to the disease? We analyse genome-wide association study (GWAS) data to establish genetic links in human populations, the gold standard for target validation. Pathway-level functional annotation through Gene Ontology and Reactome contextualises the target’s role in relevant biological processes and disease mechanisms.
Tissue and protein expression
Where in the body is the target expressed, at both RNA and protein levels? Expression profiles across normal human tissues can flag potential on-target, off-tissue effects that may become safety liabilities in the clinic. We also examine expression data across model organisms (e.g. mouse, rat, dog) to inform the translational relevance of preclinical studies.
Compounds and clinical precedent
What molecules target this protein and how far have they progressed? Data on known compounds and their clinical development phases provides direct evidence of whether the mechanism has been tested in humans and reveals how crowded the competitive landscape is.
Genetic variation
What variants exist in the gene, how prevalent are they in human populations, and what is their predicted functional impact? Clinically relevant variants across major human populations can strengthen the case for the target’s role in disease and inform patient stratification strategies.
The Target Triage advantage
Fast: Reports delivered in as little as one week.
Accessible: Interactive, secure reports that communicate complex biology clearly.
Cost-effective: A fraction of the cost of a failed clinical trial.
Target Triage reports are particularly useful for investors evaluating a portfolio of assets or comparing competing programmes within the same therapeutic indication.
See Target Triage in action
Wondering What a Target Triage Report Looks Like? You can quickly request our free sample Target Triage report using the form below:
Ready to de-risk your next investment?
If you would like to get a quote for Target Triage and more information about how we can support your investment due diligence process, just get in touch and let us know how many targets you would like to evaluate.
Making the right investment decisions in biotech has never been more critical. Target Triage gives you the independent, data-driven evidence you need to back the right assets and avoid the costly mistakes.
Author: Andrés de la Filia, Principal Bioinformatician, Fios Genomics
See also:
Bioinformatics and the Pharmaceutical Industry
