The virtual biotech business model has been around for at least 25 years and is a very attractive one. By keeping your fixed costs to a minimum, and by outsourcing, you can access expertise rapidly, control your costs, and respond quickly to the ups and downs of drug development. This month#8217;s Business Commentary looks at the emergence of contract outsource service providers, and discusses the issues raised from the viewpoints of both the virtual biotech and the service provider: the protection of biotech IP and know-how, the possibility of provider switching, risk and reward sharing between the two parties in drug discovery and development process, and alternative financing models.