Tuesday, 2 October 2012

Funding for Innovative Drug Discovery: UK 2012

Networked Pharma – Finance (NWkRx F8)

 Networked Pharma’s Workshop
Funds and Fundability, 28th 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.

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 PartnershipBuilding 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.

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