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This is a guest post from Halina Zakowicz, Marketing Specialist at Biovest International, Inc. Do you have a response to Halina’s post? Respond in the comments section below.

Scaling up cell culture production can be a tricky proposition.halina

Generating large amounts of cell-secreted proteins is labor-intensive when utilizing traditional cell culture methods. Quality and yields can be inconsistent; these methods are also prone to contamination due to multiple aseptic manipulations. Making the jump to large-scale systems isn’t easy either, often requiring capital expenditures that are not feasible.

Have you been using petri dishes, plates, flasks or spinner bottles for small-scale production of cell-secreted proteins? Are you looking to scale up your protein manufacturing using alternatives to traditional mammalian and insect cell culture?

If so, you should consider hollow fiber bioreactors.

Scaling up poses many challenges

Small-scale cell culture typically requires little more than individual bottles of media, a tabletop incubator and 30-60 minutes a day from a lab technician. However, generating cell numbers that are 100-10,000 fold higher catches many labs short-handed. Lab technicians are usually not hired to perform cell culture as their full-time job; furthermore, lab space is always at a premium.

There are a number of challenges involved in scaling up cell culture, including the following:

Different cell dynamics

What is frequently taken for granted is how the dynamics of nutrient delivery and waste removal change as a function of scale. When expanding and supporting large-scale cell culture volumes, the maintenance of proper pH and temperature becomes challenging, as does the delivery of adequate oxygen, nutrients and growth factors.

Increased labor requirements

Not only do increased numbers of cells require additional passaging, but once the cell-derived products are ready to harvest, they must be purified and concentrated from large volumes of supernatant. Both the additional cells and their derived products require additional labor.

Increased lab space requirements

Many laboratories scale up their production capacity by investing in entire rooms filled with spinner flasks or roller bottles; other labs purchase large stirred-tank bioreactors. Both of these options take up valuable laboratory space.

Higher costs

When expanding cell culture operations, expense and capital budgets are used to purchase extra media, sera and specialized equipment. Additional technician hours must be allotted and budgeted for.

Hollow fiber bioreactors offer one solution

To address the challenges posed by large-scale cell culture, researchers and commercial manufacturing operations are increasingly turning to an established, yet not well known, technology called the hollow fiber bioreactor. This technology addresses the problems outlined above by reducing the following:

Media

The hollow fiber bioreactor system consists of thousands of semi-permeable capillary membranes arranged in parallel and bundled into small cylindrical polycarbonate shells that typically take up the volume of a 12-ounce beverage can.

As a result, two distinct and separate compartments are generated: an intracapillary (IC) space enclosed within the hollow fibers, and an extracapillary (EC) space surrounding the hollow fibers.

hollow-fiber-bioreactorFigure 1. A standard hollow fiber bioreactor shown with its enclosed intracapillary (IC) and extracapillary (EC) spaces.

The small size of the hollow fiber bioreactor system means that significantly less media is required compared with stirred-tank bioreactors. Also, growth factors and other high molecular weight nutrients are unnecessary in the IC space, resulting in a reduced need for serum.

Oversight

Hollow fiber bioreactor systems can be automated for media flow, pH, temperature and oxygen control, and EC cycling. The automation of these cell culture parameters means that less oversight is required to grow large numbers of healthy cells (>109 cells/ml) and to generate large quantities of cell-secreted proteins.

Space

Stirred-tank bioreactors require additional laboratory space for housing and maintenance. Animals used for ascites production must be housed in specialized rooms. In contrast, hollow fiber bioreactor systems have a very small footprint and in many cases can be stored on a lab bench or inside an incubator.

Downstream processing

Because cell-secreted proteins such as monoclonal antibodies or vaccines remain with the cells in the EC space of the hollow fiber bioreactor, they automatically concentrate and do not need to undergo time-consuming downstream processing, a required step for most protein manufacturing processes.

Enabling efficient, cost-effective protein production

Due to their technological advantages over traditional cell culture methods, hollow fiber bioreactors are being increasingly used by academic and research laboratories and biotech manufacturing plants for mammalian and insect culture-based protein production. They also have been — for decades — the workhorse of companies that manufacture human and veterinary IVD products worldwide.

In light of the recent influenza outbreaks, for example, there has been particular interest in using hollow fiber technology to rapidly produce viral vaccines not tainted by allergy-inducing animal proteins. Likewise, both price and ethical concerns over using mouse ascites have situated the hollow fiber bioreactor as a more humane method for large-scale in vitro generation of monoclonal antibodies and other cell-secreted proteins.

Because the hollow fiber bioreactor offers a compact, efficient, economical and long-lived method for protein generation, this technology is becoming increasingly employed across laboratories, and especially laboratories that wish to find an easy and cost-effective method for scaling up their production capacities.

About the author:
As marketing specialist at Biovest International, Inc., Halina helps customers understand how hollow fiber bioreactors can be used to scale up traditional cell culture and facilitate novel in vitro applications like vaccine production. Biovest also uses hollow fiber technology in its upstream protein manufacturing and downstream processing services when working with academic, research and pharmaceutical customers.

Global Biotechnology InventorsI was just notified of a fascinating paper citing my research from DrugPatentWatch.com.

Briefly, I found two surprising results: Firstly, pharmaceutical innovation has been essentially immobile — it remains almost completely rooted in the United States and Western Europe. Secondly, there is virtually no innovation coming out of so-called emerging economies such as India and China (i.e. <1% as many patent inventors as the US).

Going further, Hu et al published a social network analysis of pharmaceutical innovation. They found that the network of international collaboration developed from a star-like US-centric network in the late 1990s to a more distributed network with a diminished centrality of the US in the late 2000s. Importantly the decrease is US centrality is due to increase collaboration between European neighbors, rather than due to a rise among emerging economies.

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

Susan Kling FinstonFor the next chapter in this continuing series, let’s turn back to India and the draft National IPR Policy currently under debate in New Delhi. A great deal of digital ink has been spilled on the constitution of the IPR Think Tank that produced the draft Policy, with less attention given to the importance of the detailed recommendations to improve the environment for creation, commercialization and management of IP in India, with particular attention to the IP challenges of Micro-Small & Medium Enterprises or MSMEs.

With regard to the appointments to the IP Think Tank, IPR academics,  NGOs and assorted IP-skeptics are aggrieved by the appointment of actual IP practitioners with experience in corporate affairs, industrial R&D, patent litigation, WIPO and the Courts, preferring that the Centre Government leave IP policy to the PhDs to avoid ‘potential conflict of interest.’ These criticisms are available online here and here.

In the event, the Modi Government chose a broader, gender-diverse range of experts for the IP Think Tank, appointing a venerable former Judge of the Madras high court, Justice Prabha Sridevan as Chairperson, and including two of India’s leading female litigators, Senior Advocate Ms. Pratibha Singh and Advocate Ms Punita Bhargaval. Rounding out the group are Dr. Unnat Pandit of Cadila Pharmaceuticals Ltd., Shri Rajeev Srinivasan, Director, Asian School of Business, Thiruvananthapuram, and Shri Narendra K. Sabharwal, Retired Deputy DG, World Intellectual Property Organization (WIPO) and now Chair of the FICCI-IPR Committee as the final member and Convenor. The Modi Government also provided opportunities for public comment by stakeholders including both before and after the IPR Think Tank’s submission of the draft document, and posted the draft National IPR Policy online.

Apart from persistent ad hominem attacks on IPR Think Tank Members – because only professors can be ‘IP experts’ –  the primary substantive complaint relating the draft IPR Policy is the threadbare assertion that there is no link between IP, innovation and assimilation of novel technologies for creation of economic and social value. This is an issue that also figured prominently in an earlier ill-fated IP Policy Baseline Draft submitted to the Modi Government by Professors Shamnad Basheer and Yogesh Pai.

Before circling back to the linkages between IP protection and enterprise development, it may be helpful to review the origins on the Basheer/Pai Document, where the Modi Government had earlier tasked three Ministry of Human Resource Development (MHRD) IP chairs – Professors Prabuddha Ganguli, Shamnad Basheer and Yogesh Pai – with submitting a draft IP policy. At some point Prabuddha Ganguly, the senior member of the team with perhaps the greatest expertise on the strategic importance of IP for enterprises, left the group. The remaining two like-minded academes Shamnad Basheer and Yogesh Pai apparently did not seek advice from the Government on how to – or even whether to – proceed, and subsequently submitted a beautifully drafted if highly impractical document.
(In full disclosure: I have known Prabuddha Ganguly and Shamnad Basheer for many years. I respect and admire them both. While I do not know Shri Yogesh Pai personally, as he is Shamnad’s close colleague I am sure he is also brilliant.)

The Basheer/Pai draft is a lyrical document, coming close to poetry in parts, with majestic, soaring language, like the following:

“While India will continue to draw on foreign precedent from jurisdictions that have had a longer and more sophisticated history with intellectual property, it will not blindly adopt their norms. Rather it will seek to adapt them to the local conditions in a bid to promote and protect national interest. Much in line with words of wisdom from the father of the nation, Mahatma Gandhi who once said: “I do not want my house to be walled in on all sides and my windows to be stuffed. I want the cultures of all lands to be blown about my house as freely as possible. But I refuse to be blown off my feet by any.’“ (p. 2)

However earnestly felt, the Basheer/Pai document reads like an IP manifesto rather than a national IP policy, lacking specific, detailed policy recommendations needed by Indian Industry for IP administration, adjudication, or training.  Basheer and Pai dispose of IP enforcement issues in the closing paragraph in 4 sentences (and one fragment)(p. 11). While touching on traditional knowledge, the paper makes no recommendations for improving access to IP rights for R&D-intensive MSMEs, despite growing recognition that innovative MSMEs face the greatest challenges in gaining needed IP protection in India.

In the final analysis,  the challenges facing India’s innovative MSMEs may provide the best response to IP-skeptics on the important connection between IP protection and innovation.

Unlike many larger firms, R&D Intensive MSMEs rely to a much greater degree on their innovative capacities and the ability to protect their creations – whether these are copyrighted works, trademarked products or patentable inventions. MSMEs in OECD-member states like Israel and the United States that have a greater ability to protect and commercialize their technologies, have a track record of creating substantial economic and social benefit in the process.

In fact the original third HRD IP Expert, Prabuddha Ganguly, has undertaken critical research in this area in his role as a WIPO consultant.  He has presented compelling data on the importance of IP protection for MSME enterprises at WIPO events around the globe, as in this paper for a 2004 regional WIPO event in Oman.

Beyond any research, my ongoing work as co-founder of emerging Indian biotech Amrita Therapeutics and consulting (transactional) work for innovative MSMEs provides daily reminders of the causal relationship between the ability of MSMEs to protect their creative works, process and/or products through IP protection, and the effective diffusion and assimilation of new technologies for creation of social and economic value.

Comparing the Basheer/Pai manifesto side by side with the Draft National IPR Policy underscores the wisdom of the Modi Government’s reboot, and calls to mind the old saw:  those who can do, those who can’t teach.  However much we may benefit from IP-Skeptics who keep challenging our IP assumptions, it may better for the rest of us if they are not charged with actual policy making in the meantime!

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.

This is a guest post from Robert E. Wanerman, a member of Epstein Becker Green’s Health Care and Life Sciences practice. Do you have a response to Robert’s post? Respond in the comments section below.

Wanerman_Robert_4x5For many biotech manufacturers, obtaining Medicare coverage is a significant milestone in commercializing an item or service. Although Medicare coverage for specific items or services that use biotechnology methods for their production, design or delivery can vary in different parts of the United States, a small number of them are guaranteed nationwide coverage if the Centers for Medicare and Medicaid Services (“CMS”) has issued a National Coverage Determination (“NCD”).  Obtaining a NCD is a difficult process for companies in the biotech industry, and depends on factors such as the quantity and quality of clinical data, including outcomes data, and a consensus of professional opinions or practice guidelines.

Since 2006, CMS has carved out a middle ground for covering items and services when it believes that the clinical data is insufficient to justify issuing a NCD, but believes that the item or service shows promise for improving outcomes among Medicare beneficiaries.  In these situations, CMS has the discretion to cover an item or service with conditions under its Coverage with Evidence Development (“CED”) authority.  If CMS agrees that CED coverage is appropriate, the sponsor then has to design a study that CMS will approve.  How CMS makes that second decision whether or not to approve a study design is often poorly understood.  On November 20, 2014, CMS released its latest guidance on CED coverage, which adds some additional clarification for interested biotech parties.

The new CMS guidance builds on its past CED approvals and typically contains several requirements for an approvable CED study:

  • Medicare beneficiaries must be enrolled in a clinical trial approved by CMS;
  • The study design must answer the questions framed by CMS in its approval;
  • The study must comply with all human subject protection regulations;
  • The study must be registered on clinicatrials.gov before any enrollment can occur (registry studies must also be listed in the Agency for Healthcare Research & Quality’s (AHRQ) Registry of Patient Registries (RoPR));
  • The study protocol must specify the method and timing of public release in either a peer-reviewed journal or in a publicly-available registry of all identified outcomes to be measured, including release of outcomes if outcomes are negative or the study is terminated early, which must be made within 12 months of the study’s primary completion date (even if the trial does not achieve its primary aim);
  • The study protocol must explicitly discuss beneficiary subpopulations affected by the item or service under investigation, particularly traditionally underrepresented groups in clinical studies, how the inclusion and exclusion criteria affect enrollment of these populations, and a plan for the retention and reporting of the subpopulations; and
  • The study protocol must explicitly discuss how the results are or are not expected to be generalizable to affected beneficiary subpopulations.

What is new about this guidance is CMS’s focus on outcome measurements.  Two new elements stand out: first, it strongly suggests that in order to approve a CED study, there must be a comparator in a control group in order to minimize potential biases and to give CMS a better grounding to evaluate the effectiveness of the new item or service at the end of the study period.  The comparator in the control arm of the study may be a placebo or standard of care treatment.  Although CMS does refer to blinding as a technique to minimize the placebo effect, the Guidance does not address evaluating (1) the risks to Medicare beneficiaries of sham procedures, such as a spine procedure to relieve back pain as discussed in the Guidance, or (2) how to offset the disincentives for a Medicare beneficiary to enroll in a clinical trial if they know that there is a chance of receiving a sham procedure instead of treatment.

The second new element in the Guidance is CMS’s suggestion that the CED study design include interim analyses that would be shared with CMS.  Although this could potentially expedite a final NCD decision if the results are strongly positive, it may increase the burdens on the trial sponsor and could become problematic for the sponsor if the interim data is not promising and CMS in response changes its demands for data in order to make a final determination.

Although the Guidance is something less than a roadmap for biotech manufacturers and other stakeholders seeking Medicare coverage, it does provide a clearer idea of CMS’s expectations when reviewing a request for CED protocol. As in the past, interested parties are encouraged to meet with CMS’s Coverage and Analysis Group and to maintain a dialogue with the agency throughout the process, to exchange ideas and to fine-tune the proposed clinical trial in order to reach a consensus with CMS.

About the author:

Robert E. Wanerman is a member of Epstein Becker Green’s Health Care and Life Sciences practice. His practice concentrates on regulatory, reimbursement, and compliance matters affecting biotech and health care manufacturers, service providers, and investors in biotech and health care organizations. Robert has extensive experience counseling clients in matters arising under the Medicare and Medicaid programs. He can be reached at rwanerman@ebglaw.com.

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

Susan Kling Finston

At the start of a bright and shiny new year in 2015, I am thinking about my own New Years resolutions as well as one that I would wish for the BRICS and Emerging Markets specifically: to strive for an enabling and nurturing environment for R&D-intensive Micro-Small and Medium Enterprises (MSMEs).  In 2014 I was privileged to work with the Wadhwani Foundation, a non-governmental organization active in South Asia and East Asia to promote MSME entrepreneurship and innovation.  The following is adapted from an upcoming Wadhwani Foundation study:  The Innovation Blueprint:  Identifying, Adapting and Assimilating Best Practice for R&D Intensive MSMEs:

R&D-Intensive MSMEs drive innovation across sectors including information and communications technologies, social media and applications, life sciences, and many others. In India there has long been recognition of the importance of MSMEs for livelihood creation, where the MSME sector employs an estimated 80 million people, and accounts for nearly half of all industrial output. The challenges facing India’s innovative MSMEs are also common to small-scale companies in Brazil and China. In fact in some areas India leads its BRICS peers. Brazil has lagged India in developing both a Venture Capital (VC) and start-up culture. While outpacing India in the WIPO Global Innovation Index, China has been unable thus far to translate innovative capacities into successful start-up companies for creation of economic and social value. For example while China has a stronger VC sector, it continues to struggle with issues of financing for innovative SMEs. China figures prominently in the Wall Street Journal’s Billion Dollar Startup Club  though, with 10 Chinese startups now valued at over a billion dollars (USD) as compared to 2 Indian companies out of a total of 71 companies (as of January 2015).  Looking at the BRICS as a whole, we also see continuing challenges to provide adequate capital resources needed for R&D-intensive life sciences start-ups.

In OECD-level countries, by contrast, innovative MSMEs play a leading role in generation of innovative products and services through direct commercialization, co-development and/or out-licensing to larger companies.

The World Intellectual Property Organization (WIPO), has described Micro-Small-Medium Enterprises (MSMEs) as a “deep, broad, fertile forest floor that nourishes, sustains and regenerates the global economic ecosystem,” 

InnovationBlueprintSlides-FINALWithin the OECD, Israel and the United States excel at innovation and job creation through MSMEs, with a strong ‘start-up culture’ that values risk and tolerates failure. The mantra of one well-recognized US technology cluster, Silicon Valley, California, is “Fail fast, fail often.” Israel also places a high premium on individual initiative and a willingness to challenge conventional wisdom, recognizing that the only true failure is not to try something new. In this context, the Weizman institute estimates that up to 24% of leading new biopharmaceuticals include Israeli-developed technologies (see table).  Acceptability of risk increase effective mobilization of capital for MSMEs through angel investors, seed funders and venture capitalists, as well as local and  centralized sources of funding for start-up ventures.

MSMEs are empirically the most productive engines of innovative technologies, products and services, and yet in the BRICS and most emerging markets, government support and funding favors larger, established and less innovative companies. Perhaps the hardest and most important adjustment of all is attitudinal.

For 2015 then, let’s hope that policy-makers will extend MSME support across sectors and regions for inclusive growth and to truly see the innovative potential of vibrant R&D-intensive MSMEs to become the next Facebook, Google, Amgen or Celgene.

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.

Patents require regular ‘maintenance’ payments to keep them in force. Because the cost of maintaining large patent portfolios can be substantial, many companies elect to abandon patents that they feel are not worth pursuing. Sometimes these patents are abandoned because they are outside a company’s focus, and in other cases they may represent markets too small for larger companies to justify targeting.

The upside of abandoned patents is that the inventions they describe enter the public domain prematurely, on abandonment rather than 20-years from filing, and they can allow outside parties to leverage the cutting-edge research from leading labs. Accordingly, some of the patents abandoned by large companies may nonetheless be very valuable for smaller enterprises.

Leveraging data I collect for DrugPatentWatch and PatentStat, I have launched a new site at PatentDrop.com that provides regular updates of patents which expired prematurely due to lack of maintenance payments, in 33 different industry sectors.

These abandoned inventions are in the public domain, and may provide opportunities for open-source projects or small and medium-sized companies to leverage the inventions which larger companies abandoned.

Biotechnology patents can be found in the biotechnology category, or by tracking individual companies, such as Agilent, DuPont, or Wyeth.

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

Susan Kling FinstonIn the “Mystery of Capital,” Peruvian economist Hernando de Soto famously writes about the need to convert assets into capital for creation of social and economic value in developing countries and economies in transition, noting:  “Any asset whose economic and social aspects are not fixed in a formal property system is extremely hard to move in the market.”  While de Soto is describing the need to legalize informal property systems, this is equally true with respect to BRICS and other countries seeking to unlock capital resources for R&D intensive start-ups, also known as Micro, Small and Medium Enterprises (MSMEs).

The importance of creating incentives for Angel investors has been recognized as a critical factor for development of biotechnology.  As articulated by Life Sciences policy expert Michael Tremblay, PhD in describing the needs of smaller (or less developed) biotech markets:  “you’ll need to consider the economic developments that come with building a life sciences sector as you’ll need to energise high net worth individuals as angel investors to help start and run the small businesses ….”

The United States provides investment tax credits at the state and federal level that create an immediate benefit to High Net Worth Individuals (HNWIs), also known as Angel Investors, from the moment of investment in a biotechnology start-up or other high-risk technology company.  These Angels have made a huge difference for biotech entrepreneurs in recent years, pitching in where VCs increasingly fear to tread.

In contrast, the challenge of private financing for innovation remains a continuing challenge for the BRICS, in part due to the absence of similar tax credit programs to provide immediate investment incentives for HNWIs:

Angel investors are virtually absent and there remain concerns relating to tax and exchange control regulations that may impact on the risk management strategies of local fund managers.

To take the case of India, for example, the government seeks to provide incentives for R&D investment both through grant / soft loan programs (with matching requirements) and by allowing deduction of R&D expenses against revenues.  Both of these policies provide significant benefits for larger companies with established product lines, however these are not the companies that generally create market disturbing bio-pharma innovation.

Conversely, these policies do not provide as much benefit for R&D intensive MSMES, both due to the challenge of meeting stringent matching requirements, and the absence of incentives for HNWIs to invest in high-risk / high-reward start-up companies. This may be one important reason why India’s life sciences sector has been described as “Biotech without Startups,” something that sounds paradoxical to Western ears, accustomed to how biotechnology evolved from start-ups to global operations, as in recent years with Celgene and Alexion, and in the early days of the biotechnology revolution with Biogen-Idec, Genentech and Amgen.

Amgen began as a biotech start-up more than 30 years ago, with a focus on commercialization of  innovative cancer therapies that save and improve people’s lives.  including oncology therapies are effective against blood cancers, solid tumors, supportive care and more in the pipeline. In financial terms, Amgen ’s valuation exceeds $100 billion –  more than India’s pharmaceutical and biotechnology sectors combined.

With the right incentives for High Net Worth Individuals, imagine the how much social and economic value could be created in any of the BRICS by just one home-grown Amgen!

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.

Gerry Langeler, author of The Success Matrix and Managing Director with OVP Venture Partners recently spoke at a breakfast event and was kind enough to record the video.

Gerry’s thoughts on ‘Why scientists fail as entrepreneurs‘ was previously featured on the BiotechBlog, and his video is posted below. For more, you can also visit Gerry’s website at www.thesuccessmatrix.com.

 

This is a guest post from Steve McLaughlin, Managing Partner and Founder of US BioSearch. Do you have a response to Steve’s post? Respond in the comments section below.

Stephen McLaughlin a (4)Effective succession plans involve a combination of many choices and decisions that are distinctive to each, specific company. Bioscience companies also present their own, unique challenges, as I have learned with my 28 years of leadership experience as a U.S. Marine Officer, Foreign Service Officer, founder of a medium sized European consultancy company, and bioscience recruiter.

The first crucial point is that a solid plan does not center solely on the president and founder of the company. A strong succession plan will focus on the entire company. A succession plan for the president and founder undoubtedly needs to be addressed, but not at the expense of the larger organization.  The following points address this issue.

I strongly believe a good succession plans begins with a company’s target market and not on the structure of the organization, i.e. the good plan focuses on the products or services that the market demands, and this will tailor the other needs of the company accordingly.

A successful company exists to service the market. While this fact is well known it can easily be forgotten as a company reaches a certain size. As organizations grow, the focus often tends to become more “internal” — on structure, internal policy, personnel issues, and the like. At this stage, businesses often forget and focus less on the reason the company exists in the first place, which is to service an outside need, and to do this as best they can.

Some organizations are able to handle change better than others. This was evident to me with the Marine Corps when I served as an Officer in the 1980’s. The Marines never lost sight of their ultimate goal—an effective combat organization in a changing world–and utilized the best skill sets and technology available to achieve it. However, when I was employed with the State Department, I saw that the organization did not understand how to adapt in a changing world. I found this institution struggled with many issues, one being the rapid growth and importance of the Internet, and was not able to define a core function.

How does focusing on the target market relate to good succession planning? A company which does not understand the reason it exists – what service it provides to its market – cannot possibly comprehend which staff positions are essential. For example, a drug company subsists to provide drugs to the marketplace. It’s therefore critical to understand the key skill sets involved in creating these new drugs, which brings us back to the company’s succession plan. Will the business lose some of its key members to retirement? Does it have the right scientific skills and technology to develop these new products? These are some of the key questions to ask.

A good succession plan also involves having a solid understanding of the intricate needs of the current and future structure of the company. Businesses require different types of organization depending on their revenue model. A company that grows past a certain threshold of revenue, for instance, will require different skill sets from its employees and need more experienced leaders. A good succession plan will include this important concept.

A related example is a succession plan that includes a strategy for when the business needs to have certain Human Resource functions internal to the company. If the company anticipates growing to this point, and has a general idea of when that point might be, it can create a plan for internally grooming the right individual to take on that position at the appropriate time.

A solid succession plan will also take into account the various skill sets available to and required for the business to be successful. Employee talent and technical skill sets are required to produce quality products or services and determine the overall success of the company. The plan should estimate the training, experience, and skill sets required for each function. It should be dictate where or how these skill sets can be acquired, and it should include a logical career progression in the market for each position. The plan needs to additionally include the market value of each skill set and any potential shortages that may exist. For example, good bioscience companies know that bioinformatics individuals are in high demand by companies outside bioscience, and therefore, they must plan for this accordingly.

In addition, a strategic succession plan will include several levels of staff promotion opportunities, and in particular, prepare for the next two or three levels of promotion for each key skill set within the company. This would include plans for employee training to gain the skills needed for individual advancement. The plan should also project potential deficits in staff numbers caused by retirements, attrition, or other events typically beyond the control of the business.

I have seen this balancing act successfully applied in the corporate world and in the bioscience sector. Well led companies understand this balance. It is the reason such businesses can exist and thrive long-term, supporting the needs of individuals who will rise in the organization.  I also believe the right external expert, who has years of experience dealing with leadership and talent challenges, can aide companies with the issue. He or she can correctly guide an organization and company to create a strong succession plan, without endangering revenue.

About the author:

Prior to starting US BioSearch, Steve was a Managing Partner at Beckett McLaughlin International, LLC. He was responsible for the firm’s Global Life Sciences practice as well as international business development in Latin America and Europe. In this role he was responsible for developing Executive Recruiting and Market Research business in the Energy, Life Sciences, Information Technology, Banking and Finance Industries.  Steve was also a senior executive for a risk analysis firm which advised a major financial house on private equity, venture capital, and hedge fund investments. Previously, he started and ran a successful European consultancy advising U.S. clients on penetrating emerging European markets.  Earlier in his career Steve worked as a U.S. Foreign Service Officer, conducting risk analysis and geopolitical reporting in Chile, Peru, and Mexico.  Steve served as a U.S. Marine Corps Officer with four years service. Steve was born in the Middle East and lived in Israel, Italy, Nigeria, Somalia, Mexico, Barbados, and the Dominican Republic. He is a graduate of Rice University with a B.A. in History, where he was student body president. He also completed graduate studies in International Trade Theory at the Universidad Mayor in Santiago, Chile. Steve speaks native Spanish and English, and fluent French.