CapEx vs OpEx: Choosing the Best Lab Strategy for Procurement

Buying lab equipment used to be a simple matter: make the purchase, list it as a capital expenditure (CapEx), and depreciate the cost over time. But today’s life science companies aren’t built for predictability—they’re built for speed, adaptability, and constant change. That shift is forcing teams to rethink how they fund everything from automation tools to real estate improvements.

More biotech labs are asking: does this purchase belong in CapEx, or can we run it through OpEx (operating expenses)? The answer can affect your cash flow, runway, financial planning, and even how investors view your operational efficiency.

This post is for biotech founders, lab managers, procurement leads, and finance professionals trying to balance scientific momentum with smart financial strategy. We'll break down the key differences between CapEx and OpEx, unpack how those definitions are evolving, and explore how to use each approach to support growth, sustainability, and better forecasting.

Whether you're upgrading equipment, evaluating cloud-based software, or planning your next facility buildout, knowing when to capitalize a purchase—or treat it as an operating expense—can make all the difference in your budget, flexibility, and long-term scalability.

Understand What Qualifies as CapEx or OpEx

Before you decide how to allocate spending, it’s important to get grounded in what makes an expense CapEx or OpEx. The accounting definitions matter—especially for financial statements—but the real impact is often felt in how spending affects your day-to-day operations, budget approvals, and overall flexibility.

What counts as CapEx

Capital expenditures (CapEx) are investments in long-term assets that are expected to deliver value beyond the current fiscal year. These purchases show up on the balance sheet as property, plant, and equipment (PP&E), and their cost is spread out over time through depreciation or amortization. In a biotech lab, CapEx typically includes:

• High-cost, long-life scientific instruments (e.g., mass spectrometers, sequencers, automated liquid handlers)
• Facility buildouts, renovations, or tenant improvements
• Major software licenses or hardware systems with multi-year lifespans
• Infrastructure investments like HVAC, environmental controls, or data center upgrades

CapEx decisions usually involve upfront costs, slower approval cycles, and require careful financial planning. But they also come with certain tax benefits, and they allow companies to build physical assets that support their core infrastructure over time.

What counts as OpEx

Operating expenses (OpEx) are the recurring, short-term costs that keep your business running. They’re logged directly on the income statement and deducted in the year they occur. These operating expenditures offer more flexibility and are easier to adjust as business conditions change. For labs, OpEx might include:

• Leased equipment or instruments bundled with maintenance
• Reagents, consumables, and ongoing supplies
• SaaS subscriptions (e.g., LIMS, ELNs, data analytics platforms)
• Outsourced services like CRO partnerships or lab cleaning contracts
• Cloud service costs or software tools tied to specific R&D workflows

Because these costs fall under operational outlays, they’re often approved at the departmental level and can be scaled up or down more quickly than large capital investments.

Bottom line: CapEx is about ownership and long-term use. OpEx is about flexibility and speed. And while accounting rules like GAAP and ASC 842 draw clear lines, most biotech teams make these decisions based on cash flow, resource allocation, and how fast they need to move.

Choose CapEx When Stability Is the Priority

Some infrastructure is too foundational—or too specific—to lease or outsource. That’s where CapEx shines.

When you make a capital expense, you're not just buying a tool—you're making a long-term investment in the way your lab operates. The equipment becomes a capital asset on your balance sheet, its cost amortized over time. That may mean higher upfront costs, but it also provides stability, control, and potential tax advantages.

When CapEx makes sense

CapEx is usually the better fit when:

• You're investing in long-life instruments with stable, ongoing use
• You have clear forecasting around multi-year R&D or manufacturing needs
• You’re equipping a dedicated facility or building out core infrastructure
• Your finance team wants to manage depreciation and capitalize the spend directly

For example, installing a GMP-grade cleanroom or validated QC lab often calls for CapEx. These kinds of investments are tied to long-term infrastructure, require strict compliance, and deliver operational value over many years. Leasing them might limit control or complicate regulatory continuity.

The benefits of ownership

Owning your equipment means fewer surprises. You’re not subject to lease terms, vendor turnover, or renewal negotiations. And when the asset has a long useful life and steady utilization, ownership can be the most cost-effective option in the long run.

CapEx investments also give you more direct control over upgrades, maintenance planning, and lifecycle management. For mission-critical systems—especially those supporting commercial production or validated workflows—that control is often non-negotiable.

But: less flexibility, more commitment

The flip side of CapEx is reduced agility. Capital purchases usually require longer approval cycles, tie up more capital upfront, and are harder to reverse if plans shift. If your scientific roadmap is evolving or timelines are tight, locking into a large CapEx investment can slow things down.

That’s where OpEx can offer an advantage—especially when you need to stay nimble, test new products, or scale programs quickly.

Use OpEx to Stay Agile and Responsive

If CapEx is about locking things in, OpEx is about staying light on your feet.

Operating expenses give you access without ownership—ideal when your science is moving fast and your priorities are still evolving. Whether it’s leasing new technology, outsourcing a key workflow, or subscribing to cloud-based software, shifting spend to OpEx can help preserve cash flow, speed up procurement, and streamline decision-making.

When OpEx is a better fit

OpEx models are especially valuable when:

• Timelines are short or uncertain (e.g., pilot studies, IND-enabling work)
• You’re supporting exploratory programs or R&D that might pivot
• Capital is tight and you need to manage runway carefully
• Your lab is in shared or temporary space and scalability matters
• You want to deploy new equipment or tools without long-term commitment

Examples of OpEx in the lab include leasing centrifuges or PCR systems, using SaaS platforms like LIMS or ELNs, or outsourcing assay development to a CRO. These operating expenditures show up directly on the income statement, making them easier to track, budget, and adjust as needed.

Benefits of an OpEx strategy

• Speed: Leases and service contracts often bypass CapEx approval queues
• Flexibility: You can upgrade, downsize, or switch vendors more easily
• Cash preservation: Spreading out operational costs protects working capital
• Alignment with science: Many scientific workflows are short-term by design; OpEx matches that tempo

By keeping spending flexible and responsive, OpEx allows labs to focus on outcomes—generating data, hitting milestones, de-risking programs—without tying up capital in long-term assets that may not align with future needs.

And if you’re working in a space like an incubator, where physical constraints limit what you can install, an OpEx-heavy approach can simplify setup while maintaining momentum.

Blend CapEx and OpEx Strategically

In real life, it's rarely all-or-nothing. The smartest labs use a mix of CapEx and OpEx to balance stability with agility—investing in what needs to last, and renting or outsourcing what doesn’t.

Think of it as financial planning tailored to your scientific lifecycle. Some investments are core infrastructure—long-term assets that justify being capitalized. Others are short-term tools or services that support rapid iteration, new products, or proof-of-concept work.

How labs typically divide the two

CapEx for durability and core infrastructure:

• High-value instruments with a long useful life and steady use
• Environmental systems or cleanrooms tied to regulatory requirements
• Equipment supporting validated workflows or commercial readiness
• Large-scale capital investments in real estate or automation infrastructure

OpEx for speed and adaptability:

• Tools supporting early-stage R&D or shifting workflows
• Equipment used for short-term testing, evaluation, or bridging needs
• SaaS tools or software licenses that support collaboration or data analysis
• Outsourced operational costs tied to services, not ownership

This blended approach helps streamline business operations and avoid overcommitment. You don’t need to fully own something just to get value from it—especially if you’re still testing feasibility or optimizing workflows.

Try before you buy

One powerful strategy is using OpEx to validate the need before committing to CapEx. For example:

• Lease a system during IND-enabling studies
• Outsource a process while evaluating internal capabilities
• Subscribe to software to see how well it integrates with your team’s workflow

If the tool proves essential—and your needs stabilize—you can transition to a capital purchase. This approach reduces risk, supports better forecasting, and ensures capital outlays align with real-world utility.

Build Your Budget Around Real-World Needs

Budgeting in biotech isn’t about following a rigid formula—it’s about adapting to uncertainty while keeping science on track.

Timelines shift. Funding comes in waves. Programs pivot. Yet through it all, your lab needs the right tools, at the right time, without compromising cash flow or operational efficiency. That’s why choosing between CapEx and OpEx isn’t just an accounting decision—it’s a strategic one rooted in financial health and scientific execution.

Ask the right questions

Instead of defaulting to what’s been done before, consider:

• How long will we need this tool—and how soon?
  If you need it now, and only temporarily, OpEx might get you moving faster.
• Is this tied to a long-term asset or a short-term workflow?
  That distinction alone can inform whether a capital investment is worth it.
• Does this support a milestone or stretch our cash too thin?
  Flexible spending can help you hit goals without compromising runway.
• How does this choice show up on our financial statements?
  Capitalized assets affect the balance sheet. OpEx flows through the income statement. That can influence both internal planning and external optics—especially with investors.

Strategy over habit

A CapEx-only mindset can delay access to critical tools, strain near-term liquidity, and lock you into systems too early. But a purely OpEx approach can get expensive over time and leave you underinvested in infrastructure. The goal isn’t to choose one over the other—it’s to combine them in ways that match your lifecycle, budget, and scientific goals. Whether you’re outfitting a new space, testing new technology, or planning your next major capital expense, make sure your budget reflects how your team actually works—not just how assets are traditionally categorized.

Need a more flexible way to equip your lab? Leasing scientific instruments through Excedr can help you get the tools you need—without the upfront costs of a capital purchase.

Whether you're launching new programs, scaling fast, or building out infrastructure, our equipment financing options let you preserve cash flow and adapt as your needs evolve. Let's make your next upgrade easier.