Financial planning and analysis (FP&A) at a biotech company looks nothing like FP&A at a software company. There is usually no revenue to forecast, the largest costs sit with outside partners, and the most important number in the company isn't margin. It's how many months of cash remain at the next data readout.
This guide covers what biotech FP&A is, the models every clinical-stage finance team needs, how the budget and board cycle works, and when it makes sense to move off spreadsheets.
What is biotech FP&A?
Biotech FP&A is the planning, forecasting and reporting work that tells a life sciences company how much it will spend, on what, and how long its cash will last. In practice it answers four questions:
- How long is our runway? Months of cash at current and planned burn, and how that changes with each financing or delay.
- What will each program cost? Spend by program and study, including CRO, CMO and site costs.
- Are we on plan? Budget vs. actuals by department, program and vendor, with explanations.
- What should we tell the board? A clear, defensible view of burn, runway and milestones.
How biotech FP&A differs from SaaS FP&A
Most FP&A playbooks and software were built for companies that sell something. A clinical-stage biotech plans around a different set of drivers.
| SaaS / commercial company | Clinical-stage biotech | |
|---|---|---|
| Primary metric | Revenue, ARR, margin | Cash runway to the next milestone |
| Plan organized by | Product, region, sales team | Program, study, function |
| Largest cost drivers | Headcount, sales and marketing | CROs, CMOs, clinical sites, R&D headcount |
| Timing risk | Pipeline conversion | Enrollment, manufacturing, regulatory delays |
| Funding | Operating cash flow, debt | Equity rounds, partnerships, grants |
| Accounting complexity | Revenue recognition | Clinical trial accruals, prepaid R&D |
The practical consequence is that one change, such as a three-month enrollment delay, ripples through clinical costs, headcount timing, accruals and the cash-out date at once. A biotech plan has to connect those pieces, or every scenario turns into a day of spreadsheet work.
The core biotech FP&A models
1. Operating expense (OpEx) forecast
The OpEx forecast is the backbone of the plan: monthly spend by GL account, department and program. Good biotech OpEx forecasts:
- Separate R&D from G&A, and within R&D, separate spend by program so you can report cost per asset.
- Tag every line with a vendor, so CRO and CMO spend can be tracked against contracts and purchase orders.
- Lock closed months to actuals, so the forecast only covers the open periods.
2. Cash runway and scenario planning
Runway is the number the board, investors and leadership watch most closely. A runway model takes the OpEx forecast, adds capital spend, working-capital timing and financing events, and produces a cash balance by month.
The value comes from scenarios. A useful runway model can answer, in minutes:
- What if the Phase 2 readout slips by a quarter?
- What if we close the Series B in June instead of March?
- What if we pause a program, or add one?
Most teams maintain a base case plus at least one downside and one upside case, and show runway to each major milestone rather than a single cash-out date.
3. Clinical trial budgeting and accruals
Clinical trials are usually the largest and least predictable line in a biotech budget. Two related jobs live here:
- Clinical budgeting: forecasting study costs from sites, patients, visits and milestones, usually built on the CRO contract and the schedule of assessments.
- Clinical accruals: recognizing the expense for work performed before the CRO invoices it. Because invoices lag the work, accruals often drive the gap between "what we spent" and "what we were billed".
Accruals are typically driven by enrollment and site activity, split into unit-based items (per patient, per visit) and milestone-based items (site activation, database lock), plus pass-through costs. Getting them right matters for both the monthly close and the audit.
4. Headcount and workforce planning
People are usually the second-largest cost. A biotech headcount plan should show:
- Fully loaded cost per role: salary, benefits, payroll taxes, bonus and equity.
- Hire timing tied to milestones, so a delayed readout can push dependent hires automatically.
- Allocation by program, so R&D headcount cost shows up in program spend.
5. Budget vs. actuals (BvA) and variance analysis
Each month the finance team compares actual spend to plan. In biotech, the most useful variance analysis separates:
- Timing variances: work happened later (or earlier) than planned.
- Volume variances: more or fewer patients, sites or batches.
- Rate variances: the price per unit changed.
Then it explains the variance in program terms ("enrollment at EU sites started six weeks late") rather than accounting terms.
6. CapEx, prepaids and the three statements
Lab build-outs, equipment and manufacturing capacity flow through CapEx and depreciation. Prepaid CRO and CMO deposits flow through the balance sheet. Mature teams tie all of it into an integrated income statement, balance sheet and cash flow statement, so runway is calculated from the same numbers the auditors see.
The biotech budget and board cycle
A typical annual rhythm for a clinical-stage company:
- Q3–Q4: annual budget. Department and program owners submit budgets. Finance consolidates them, tests runway and iterates with leadership.
- Board approval. The board approves the budget, usually with a base case and a downside case.
- Monthly close and BvA. Actuals come in, accruals are booked, and variances are explained.
- Quarterly reforecast. The plan is updated for what has changed: enrollment, timelines, financing.
- Board meetings. Typically quarterly, with runway, burn, milestones and hiring at the center of the deck.
Two things make this cycle painful: the reforecast is usually a manual rebuild, and the board deck is assembled by copying numbers out of spreadsheets.
The biotech FP&A tech stack
Most companies move through roughly three stages.
Spreadsheets. At the seed and Series A stage, Excel or Google Sheets is fine: one program, one budget owner, and a runway tab updated before board meetings.
General-purpose FP&A software. Tools like Cube, Abacum, Adaptive or Planful add consolidation, version control and integrations with the ERP. They are built for revenue-driven businesses, so biotech teams often rebuild clinical, accrual and runway logic on top of them.
Biotech-native FP&A software. Platforms built specifically for life sciences model programs, studies, CROs, accruals and milestone-gated hiring directly. Exigyn is one example: it ships 17 prebuilt biotech planning modules and connects AI assistants such as Claude, ChatGPT and Gemini to the live plan.
When to move biotech FP&A off spreadsheets
Spreadsheets stop scaling when:
- Several programs, CROs and CMOs feed the plan.
- The board asks what a delay or financing does to runway, and the answer takes days.
- Accruals, headcount and runway live in separate files that no longer tie out.
- More than one or two people need to edit the plan at once.
- You want AI tools working on the real plan, not on numbers pasted into a chat.
If three or more of those sound familiar, it's usually time to evaluate a dedicated platform. See how Exigyn compares with general-purpose FP&A tools, or browse the demos.
Biotech FP&A checklist
- OpEx forecast by account, department, program and vendor
- Closed months locked to actuals
- Runway model with base, downside and upside scenarios
- Runway shown to each major milestone
- Clinical budget built from CRO contracts and enrollment
- Monthly accruals by CRO, study and vendor
- Headcount plan with fully loaded costs and milestone-gated hires
- Monthly BvA with timing, volume and rate explanations
- Quarterly reforecast process
- Board deck that pulls from the live plan