Lifescience / Healthcare Start-up Evolution?

Lean Start-up, Accelerators and Business Model Canvas in Lifescience/Healthcare?

Can the Lifesciences / Healthcare sector’s business start-ups learn from the experience and techniques of the Tech / Digital sectors? I’m thinking particularly of speed to market, and success rates.  If so it this could well boost investment into this sectors start-ups!

As a starting point to investigating this further I’m reviewing/benchmarking the use of three “techniques” within Lifescience/healthcare sector, and would like to ask or your help with this, via three queries.  The aforementioned “techniques” are listed below along with links to brief Linked-In polls.  Many thanks in anticipation of your help - I will of course freely publish the results on my Blog!

1.      The rise of the Tech Accelerators such as the original Y-Combinator and TechStars, and a number of followers in USA & Europe, are a testament to the success of the Accelerator approach (reviewed by NESTA report Start Up Factories, and utilising community based approach elaborated by Brad Feld www.startuprev.com).  Until the recent Health Wildcatters launch in Dallas and Harvard announcement for funding of a new healthcare accelerator, there appeared to be none active in our sector. Are you aware of any others existing or planned?

Poll: http://linkd.in/12wJRSl

Related are the “Lean Start-up” , movement developed by Eric Ries (theleanstartup.com), and the Business Model Generation techniques of Alexander Osterwalder and Yves Pigneur (www.businessmodelgeneration.com.  In particular techniques such as Minimum Viable Product and Business Model Canvascanvas.  These are reviewed in brief article by Steve Blank, Why the Lean Start-Up Changes Everything (hbr.org/2013/05/why-the-lean-start-up-changes-everything/ar/1).

 Are you aware of these techniques being used in Lifesciences / Healthcare sub-sectors?

2.      Lean Start-up                              Poll: http://linkd.in/17oPuHR

3.      Business Model Canvas             Poll: http://linkd.in/17oPl7b

I look forward to receiving your input.

Many thanks

Nick
nickpope@biospring.co.uk

NHS Open for Business ?

East Midlands AHSN

There will soon be a new "kid on the Block", with the aim of opening the NHS for business!

I thought readers may well be interested to hear of these new organisation that will make the NHS much more user friendly for business - be it research, trials, or marketing!

So here’s a “heads up” on the forthcoming launch of one - the East Midlands AHSN.

EMAHSN’s vision is “The transformation of patient access, experience and outcomes...through innovation and enterprise working” (www.emahsn.ac.uk provides a general overview). Working with Industry, and facilitating such, is central to their approach.  They aim to be a one stop shop for industry interaction with the NHS in EM, for all purposes: be that adoption of new products, user testing / product development, clinical trials, or clinical research; or indeed assisting NHS derived innovations to be commercialised and the promotion of clinical needs  to industry to expedite the development of new interventions.  The organisation will become ‘live’ April 2013.

A specialist industry support unit will facilitate the one-stop-shop for industry, assisted by a web-portal, and a small seed funding activity will help new innovative ideas get started.  A series of events to highlight the NHS’ clinical “Priority Needs” and enabling networking between industry and clinicians is being planned, and regular Networking events will follow, as will attendance at Biotech/Pharma/MedTech sector events.

personally, I'm proud to be involvement as the Commercial Adviser for this industry facing component, and as such I would be delighted to provide more information on request ? 

Nick

nickpope@biospring.co.uk

Open Innovation (in Biotech/Pharma)

BIA breakfast meeting 28/11/12, BioCity, Nottingham

One of a series of  BIA Breakfast events around the UK; Chaired by BIA CEO Steve Bates, with panel members Clare O’Neil, Original Ventures and Nick Pope, BioSpring Ltd.

Supporting material for Nick’s contribution:

Definitions

Innovation is “using a novel approach to satisfy a real market need”, and so inherently requires commercialisation. OI tends to be thought of as the ideation and research end only, whereas the later stages are also important.

Open can mean one, or both, of:

1. Collaborative v’s competitive, trusting, operating with a “Win Win” ethos, or

2. Open to outside ideas (Big Pharma)

Open Innovation is generally more open, trusting, with networking at its core, and with True “win-win” working (not just pretending so!). Hence it needs personal and organisational alignment to succeed (see Success Factors).

On the surface, it’s fairly similar to what small co.’s often have done anyway, but to a much greater extent, enabled by the speed, ease and global reach of communications the digital age makes possible. Ownership of resources is no longer key, rather it’s the networks to be able to access the resources that is! (e.g. drug molecule screening in silico, now run in the cloud. Computers are not important, its algorithms & molecules that are).

• Ideas, IP, Knowledge and knowhow can easily flow!

Open Innovation brings a New Paradigm and New ways of managing innovation:

• fail quick and learn fast
• innovation ecosystems rather than Assets,
• “connectors” (access points) as well as the research itself.
• An easy way to tap into other skill-sets when you need them.

Examples

There is a Spectrum of OI,

a.   Open access journals (e.g. nature’s web journal), Structural  Genomics Consortium making structure data freely available & GSK giving access to its trials data,

b.   Easy Access IP initiative, where Bristol, UCL & Glasgow Universities have opened their “difficult to commercialised” IP to everyone,

c.   Specific company initiatives using portals or agreements to

1. access new molecules (Lilly’s OIDD portal, or Unilever) or
2. new applications for (old / failed) molecules (AZ/MRC deal, & NCATS initiative),

d.   Sponsored challenges with funds and a problem, often posted on third party portals such as www.innoget.com, www.innocentive.com, www.kaggle.com

e.   True crowdsourced e.g. www.Zooniverse.org & mechanical turk (https://www.mturk.com/mturk/welcome).

Then there is Crowdfunding e.g.

1. Seedrs (UKFSA regulated) www.seedrs.com
2. Wiseed (F) www.wiseed.fr/; 

“First biotech seed crowdfunding” – Anabio (www.antabio.com/en)

3. BIA Citizens Innovation Fund (citizens-innovation-funds-report/)

And where Big Pharma are opening up to early stage science through a variety of approaches, including incubatorse.g. GSK & Stevenage BioScience Catalyst, and Merck & not-for-profit Calibr.

IP

Same requirements as usual, but more pragmatic – they are only applied once a project gets to commercial/competitive phase. Not just for the sake of it. But, put clear agreements in place from the start, to deal with IP when it becomes relevant.

Avoid joint IP (it will be if no agreement is in place from start), as in the UK (not USA) jointly owned IP requires All owners to agree to the exploitation by any of the owners! (unless explicitly agreed otherwise).  This can cause big problems if not dealt with in advance.

Success factors

Clear understanding, alignment and agreement by all parties from the start.

·    Personal & organisational alignment – the “soft aspects” that often derail collaborations! - lessons can be learned from other industries, and techniques borrowed (networkedpharma).

·    A well-structured agreement Formal agreement embodying all of this, and incl.

·        Clear Mutual understanding of what each party wants out of it – objectives

·        Clear IP ownership and commercial exploitation rights agreement

·        Agreement project management structure and process aimed at Effective monitoring and management of projects

e.g. Lilly’s web based OI portal for sourcing new molecules establishes a master agreement with each new University/institution as a faculty member wants to submit ideas.  This is then in place for all subsequent members from same institution.

·    High level champion in each organisation

·    Clear open communications (co-location helps)

·    Focused approach

·    Willingness and system to “fail fast, learn quick”

·    Network with multiple connections

Sources:

1. NetworkedPharma Funds & Fundability workshop June 2012 (report available Mid December).
2. Above hyperlinks.

BioSpring Ltd is a member of Networked Pharma Partnership, a not for profit organisation dedicated to assisting development of a new paradigm for drug discover & development

Networked Pharma Partnership; Building Innovative Networks in Drug Discovery & Development

A series of workshops are being run to bringing together all stake-holders (Corporate Pharmas, SMEs, CROs, Universities, VCs, CVCs, Research Councils, Charities, Regulators & Government bodies etc.) to help formulate the new business model(s) for the future success of the industry.

Follow us:

Twitter @NWkPharma,      #NWkRx

Funding for Innovative Drug Discovery: UK 2012

Networked Pharma – Finance (NWkRx F8)

 Networked Pharma’s Workshop

Funds and Fundability, 28^th June 2012

Executive Summary

Networked Pharma’s “Funds and Fundability” workshop examined the evolving funding ecosystem (equity, collaboration & grant) and the future role of open innovation (OI) for early stage drug discovery.

Key opinion leaders were joined by 60 participants from diverse stakeholder backgrounds, for presentations and facilitated discussions (report available on request).  Workshop website.

Key Findings

A.  Investor consensus surprisingly positive for biotech/pharma sector.

o There are hidden / ‘below the radar’ fundraisings occurring,

o Although the old investment model is dead in UK, and the public markets closed, there is now a new model of a single large investment sufficient to go all the way to achieve an exit by trade sale.

o Funds are emerging with “Patient” Capital (i.e. they are prepared to wait long enough for value creation to occur).  However, more are needed.

B.   UK is good at producing lean companies with 1 or 2 products that are sold-off too soon for early exit and financial return:

“You Brits are very good a creating ‘Veal’ ready for slaughter”

Participant quoting a USA colleague                           

Rather than being prepared to wait and build a self-sufficient multi-product company and so realise the full potential value. 

“We need the fodder to build ‘Beef’”     Serial biotech entrepreneur

More Patient capital is needed for this and probably the public markets.

“Are we prepared to be patient?”   VC

Sector needs

1.      A new / “better” way to capture information on fundraisings.  Many current investments are “under the radar” as different types of investor are now involved, and there is no need for publicity. This will enable us all to know what is actually happening and to recognise successes.

2.      A better way to recognise our UK pharma/biotech company successes, and new measures to assist with this (not just financial).

3.      Support for entrepreneurs to decide which of the funding sources to approach: i.e. Fill the information gap between funders (of all types including government/research bodies) and those looking for funding

1. Which of the three “silos” of equity investor’s to approach, and who to contact therein? The three silos rarely interact: 1. VC/CVC, 2. Angels/regional funds, & 3. Public-listed funds.
2. Which grant funding and other non-equity sources are applicable to given types/stages of projects/companies, and who to contact?

4.      More equity funds that straddle the three silos.

5.      The creation of some biotech/pharma Sector Champions (“Beef”) in UK, and more investors prepared to be “patient” (prepared to wait 10+ years to develop full value and achieve such champions).

6.      Engagement of the public markets with biotech.

7.      More specific information and better information sources on OI & Crowdsourcing within Drug discovery, and where entrepreneurs can go for advice.

8.      Support for entrepreneurs to establish effective collaborative relationships, utilising open innovation /crowdsourcing, collaborative projects and (open) networks.

Action

NetworkedPharma is now establishing collaborative networks to address the above, and welcomes approaches from those interested in the possibility of working together for the good of the sector.  As a not-for-profit organisation we are also interested in discussions with potential patrons / sponsors / supporters.                       

Our next workshop on Open Innovation& Crowd Sourcing will be in April 2013.

BioSpring Ltd is a member of Networked Pharma Partnership, a not for profit organisation dedicated to assisting development of a new paradigm for drug discover & development

Networked Pharma Partnership; Building Innovative Networks in Drug Discovery & Development

A series of workshops are being run during 2012, leading to an international congress in mid 2013, which will bring together all stake-holders (Corporate Pharmas, SMEs, CROs, Universities, VCs, CVCs, Research Councils, Charities, Regulators & Government bodies etc.) to formulate the new business model(s) for the future success of the industry.

Follow us:

Twitter @NWkPharma,      #NWkRx

BioSpring Website being redesigned, so temp redirect to here.

Should be completed in couple of weeks.  Blog will remain here.

The Changing Nature of investing in early Pharma / Biotech: Poll Result

Networked Pharma – Finance (NWkRx F7)

I ran the Linked In Poll below as a prelude to Thursday's Funds & Fundability workshop in London http://www.networkedpharma.com/funding,:

According to those that responded Open Innovation and Crowd-funding will have greatest impact on drug discovery,more than even Corporate VC investment, and perhaps most interesting VCs where seen as the least significant!

I await with anticipation the outcomes form the workshop itself! 

NB there will be some register on the day places available http://www.networkedpharma.com/funding

BioSpring Ltd is a member of Networked Pharma Partnership, a not for profit organisation dedicated to assisting development of a new paradigm for drug discover & development

Networked Pharma Partnership; Building Innovative Networks in Drug Discovery & Development

A series of workshops are being run during 2012, leading to an international congress in early 2013, which will bring together all stake-holders (Corporate Pharmas, SMEs, CROs, Universities, VCs, CVCs, Research Councils, Charities, Regulators & Government bodies etc.) to formulate the new business model(s) for the future success of the industry.

Follow us:

Twitter @NWkPharma,      #NWkRx

Future View of VC investing in early Pharma / Biotech: The CVC Perspective

Networked Pharma – Finance (NWkRx F6)

 I recently spoke with one of the more active Corporate VCs (CVC) regarding the existence 

of the funding gap in early pharma discovery, the reasons for it, and what the future holds.

There is a funding gap in early drug discovery - but not an insurmountable one!

Previously the investment model in Europe for general VCs assumed funding to a proof of principle and then floatation on a public market or trade sale to Pharma company.  However as the public markets do not understand biotech (nor do generalist VCs) share prices are highly volatile and single poor trial results are catastrophic for share prices.  Hence appetite for biotechs became poor in early 2000’s, and so VCs could see no exit that way.  Also Big Pharma have stringent requirements for in licensing and often VCs were not able (insufficient funds) or unwilling (required cost of capital by their investors necessitates shorter timescales) to continue funding sufficiently to achieve the proof needed by Pharma.

Part of the problem was “naive money” ie from general VC’s inexperienced in the sector.  There is now a gap in early funding as the general VCs have pulled out of the sector, although some still have portfolio company legacies.

Being a “Biotech VC is completely different from other VCs, including Tech.”

So what of the specialist funds?  There are (in the interviewees view) a small group of “tier one” specialist biotech VCs that are, or will be, active:

·       VC:

Abbingworth, Imperial Innovations, Index, MVM, Phase4ventures (ex.Nomura), Sofinova, SVLS (Shroders).

·      Corporate VC (CVC) – those that are wholly or largely independent from Pharma HQ influence:

Lundbeck, Novartis, Novo, Pfizer, SR One.

These generally have longer timescales and larger pots of money for investment.  However at present most of the Biotech VC have either run out of money, or are at 5yr+ stage of 10 year fund and so have to keep funds for follow-on investment.  So few are investing (e.g. Sofinova & SVLS who both have ~7 years left on their funds, and Imperial with its longer term approach).  The rest are actively fundraising early stage funds.  Hence the gap is [at least in part] temporary, awaiting fundraisings. The CVCs are actively investing and moving to earlier stage opportunities.

Another issue has been that companies spin-out too soon, with small investment from small funds, Angels etc and then have to find more money to develop further.  The incumbent investors have insufficient funds and as the technology is still not sufficiently demonstrated, so

1.      Larger VCs are not interested or only so with terms which dilute the existing shareholders so much that they will not agree,

2.      Pharma is not yet interested in licensing, or a very poor set of terms is achieved, and/or

3.      Company has to switch to a much lower-value service model to survive.

None of which is a desirable situation for anyone.

The CVC would prefer companies to be incubated longer in universities “until they are really ready”, perhaps with a £50-100k “investment” from a CVC to enable some critical proof of concept work (with a gentlemen’s agreement for first chance to discuss next steps assuming success), and then spin out with major investment by party(ies) with deep enough pockets to see it through to exit (trade sale).

So what are they looking to invest in?   Something really new, which may be a service business, but more likely a game changing innovation that has potential to satisfy unmet medical need, is likely a new mode of action, and most certainly is not only approvable but also reimbursable!  The latter needs a step change in clinical outcomes.  So no longer improvements on existing drugs e.g. new delivery methods or me-toos, as Big Pharma will do this themselves.  Regarding reprofiling: there is still a short window of opportunity, but eventually Big Pharma will be doing this. 

What Big Pharma ultimately want to acquire is the game changing new drug, and so that is what the VCs want to invest in.  This will be high value, with a high hurdle rate, necessitating large investment.  The VC has to consider all risk, not just the technological (R&D) risk that is mainly considered- including ability to exit, and shareholder dynamics risk (sufficient funds, dilution etc).  Hence there will be fewer investments, of great amounts, with funds being more focussed. 

Imperial, MVM and SR One are all speaking at Networked Pharma’s Funds & Fundability workshop on June 28^th in London http://www.networkedpharma.com/funding, and will share the panel discussion with serial entrepreneurs Andy Richards and Julian Gilbert.

BioSpring Ltd is a member of Networked Pharma Partnership, a not for profit organisation dedicated to assisting development of a new paradigm for drug discover & development

Networked Pharma Partnership; Building Innovative Networks in Drug Discovery & Development

A series of workshops are being run during 2012, leading to an international congress in early 2013, which will bring together all stake-holders (Corporate Pharmas, SMEs, CROs, Universities, VCs, CVCs, Research Councils, Charities, Regulators & Government bodies etc.) to formulate the new business model(s) for the future success of the industry.

Follow us:

Twitter @NWkPharma,      #NWkRx