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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 FinstonBack when I wrote ISO A Scientific Revolution in Cancer Research in April of 2013, I truly did not expect to be able to greet the revolution by year’s end. By December 2013, though, Science magazine anointed cancer immunotherapy as the “breakthrough of the year”, and pharmaceutical R&D for oncology immunotherapy has been surging ever since. This is really good news for cancer patients and their families.

But first, the backstory: Cancer remains the leading cause of death in OECD countries and second leading cause of death in the developing world. Despite the investment of over $100 billion dollars and increased understanding of the genetics of cancer tumors, the vast majority of patients still receive highly toxic chemotherapy – either on its own or combined with radiation and/or surgery. As before, cancers may routinely develop resistance to chemotherapies, and radiation may new cancers, placing additional burdens on patients, families and the healthcare system. So the  availability of funding for cancer immunotherapy represents an important hope for commercialization of safer, more sustainable cancer therapies.

Cancer immunotherapy seeks to stimulate the patient’s immune system to attack malignant tumors, recognizing that the central challenge of the disease is the inability of the body to recognize and confront uncontrolled growth of cancer cells. Bacterial immunotherapy in particular has a long history of nearly 150 years with observation that acute bacterial infections could shrink tumors, often contributing to complete remission of cancer. In the late 19th century, physicians in Germany and the United States observed that cancer patients with coincident bacterial infections experienced tumor regression. German physicians W. Busch and F. Fehleisen separately reported tumor regression in cancer patients with erysipelas infection.

Contemporaneous reports from Dr. William B. Coley, a New York surgeon, noted regression of malignant sarcomas in patients suffering from bacterial infections. Dr. Coley then systematically treated bone and soft tissue cancer with a bacterial vaccine that became known as “Coley’s toxin,” consisting of heat-killed streptococcal organisms combined with heat-killed Serratia marcescens (formerly known as Bacillus prodigiosus). Coley treated over 1000 cancer patients and achieved a high success rate in treatment of sarcomas, carcinomas (e.g. breast and renal cancer), lymphomas and melanomas. Coley’s toxin became the foundation for early cancer immunotherapy, only to be overshadowed by the emergence of radiation and chemotherapies.

Now cancer immunotherapy has come back to the fore, both due to the success of new immunotherapies and recognition of the limits of radiation and chemotherapies, with or without genomics. Science magazine in 2013 cited the first fruits of modern cancer immunotherapy with promising T-cell Receptor therapies, as mentioned. Fast forward two years, and cancer immunotherapy has become perhaps the most important area for experimental cancer therapies and cures.

The current impact and importance of immunotherapy for cancer R&D is perhaps best symbolized by the today’s launch of the Loncar Investments Cancer Immunotherapy Index. The Loncar Immunotherapy fund includes a companies ranging from diversified Fortune-100s to smaller companies focused exclusively on immunotherapy.

At least for now it does not include Amrita Therapeutics Ltd. – an Indian biotech-startup that I co-founded with Ananda Chakrabarty that builds on our increased understanding of the important therapeutic role of bacteria and related peptides in cancer therapy. Ananda has been saying for some time to anyone who will listen that the evolutionary wisdom of bacteria may lead to a new golden age for cancer therapies and broader drug development. For my part, I have learned that the future is a mystery.

Only hindsight is 20/20.

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 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.

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 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.

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.

This is a guest post from Isabela Oliva. Do you have a response to Isabela’s post? Respond in the comments section below.

How to survive the expected and unexpected challenges of the start-up lifecycle in the biotechnology business

IMG_2215 linkedin3A major difference between biotechnology and information technology ventures is the time it takes to bring a product to market. Unlike Facebook and Google, innovation in the medical sciences world generally starts from the results of a long, government-funded basic research investigation.

If a scientific discovery is deemed promising and potentially lucrative, a patent is filed to protect the idea until it matures to a final commercial product. Initially, a patent value is very low due to the high risks and uncertainties associated with the early stage discovery, and it can be hard to attract interest and money from big corporations that have their focus on late stage product development. That is why biotech start-ups emerge. They cover the ground of developing the proof of concept of a new technology.

The early stage of the biotech start-up lifecycle is often called “the translational gap” or “the valley of death”, because of the technical challenges and scarcity of funds available for this early stage of product development. When the proof of concept is successfully established and clinical trials begin, patent value starts to increase, attracting big players in the Biotech/Pharma industry. At this more mature stage of the company, new demands arise, and the start-up company structure and priorities will be required to change in order to survive.

Great technology alone is not sufficient to bring a product from research to market, and leaders should be aware, from the beginning, that a start-up structure and focus will most likely need to change to successfully adapt to the different stages of the product development lifecycle.

This article correlates the different phases of a biotech start-up with the leadership skills necessary to address the most relevant challenges of each stage in an attempt to improve the success rate in surviving “the valley of death”.

Early Stage: The visionary and how to move the idea forward

The spark that ignites the creation of a new biotech start-up is the identification of an opportunity or breakthrough solution for problem in a given market. A passion for the cause, a strong belief in the idea and a clear vision of its application are essential to leadership during the first step of the start-up development.

At this stage, most leaders are the inventors or licensees of an intellectual property. In the early stage the leader must have a strong scientific background and be credible when presenting their idea to the scientific community and the general public. A can-do mentality is crucial, since the number of employees is limited and the leader will need to wear many hats to achieve the company’s goals at this stage, such as defining the technical concepts of the business plan and choosing valuable teammates and partnerships. Understanding the market, protecting intellectual property and securing early funding require a business mind-set, and it can be a challenge for scientists without prior experience outside of the academic world. Nevertheless, being passionate about the technology can help the leader motivate people to believe in the idea, and could also provide the stamina required to overcome the obstacles of the early stage.

Commercialization Stage: The fundraiser and science-to-product

The main goal of this stage is the development of concrete routes for commercialization – assuring sufficient funding to bring a product to the market. The day-to-day operations become more complex, resulting in a need for structured management, and a possibility of changing roles and responsibilities for early stage employees, including co-founders.

Commercial interest will likely replace the early-stage scientific focus as requirements for funding increase. The leader becomes the person with the power to realize the commercial vision for the company. Convincing founders that the priority is commercialization might require canceling projects that seem unprofitable, even if it means shifting the priority to a secondary project that had just entered the pipeline.

It is crucial for the leader at this stage to be strong in their decisions, yet sensitive to the company environment, in order to implement necessary changes without affecting employee relations in a negative way.  Communicating and managing change effectively is a key challenge at this stage. A growing biotech start-up cannot afford losing talented employees, many of whom are subject matter experts of the technology being developed. The implementation of professional processes, operations and organizational structures that might make some senior employees uncomfortable will most likely be necessary.

 Operational Stage: The strategist and how to deliver

At this stage the company needs to demonstrate its marketability by strengthening alliances, deals, and strategic partnerships. A shift in focus from project to transaction might take place, and the management team might be under pressure from its responsibility to investors and an imminent IPO or M&A. The main company goals are to maximize investor return while maintaining workforce retention, morale and culture. In general, it is a stage when keeping promises to business partners, investors, and the general public is extremely demanding. The leader now needs to lead a result-oriented, precise, and efficient management team, task comparable to those of managers in the large industry. Investors such as Venture Capital might want to bring their own CEO as a leader and take part in the company board of directors.

The Board and Exit Strategy

The board of directors plays a key role in advising the leader at all biotech start-up stages. Although t the leader chooses the board members during the early and commercialization stages, they may lose this control at the operational stage when investors’ pressure on ROI is high. The board generally plays an important role in deciding the exit timing and strategies, and it is the leader’s responsibility to clearly articulate the company’s strategy internally and externally. The ability to successfully react to change and to deal well with pressure is equally important when planning for the exit.

Conclusion

The growth of a biotechnology start-up company presents unique challenges that should be properly addressed to achieve the business goals at each stage. Common leadership skills such as clear communication and the ability to implement change are necessary throughout the biotech start-up lifecycle; however, a transition from a science-oriented to a business-oriented culture seems to be essential to survive “the valley of death”, and must begin within the company’s leadership. The ability to accept change, to adapt and to build and maintain relationships are the key points in the progression from science to business and finally the success of a biotech start-up company.

References

Leadership management needs in evolving biotech companies. Andreas Foller. Nature Biotechnology  20,  BE64-BE66 (June 2002).

 Managing change in biotech: startup and growth. Mary Ann Rafferty. Nature Biotechnology 25, 479 – 480 (2007).

Early-Stage Biotech Companies: Strategies for Survival and Growth. Wendy Tsai and Stanford Erickson. Biotechnol Healthc. Jun 2006; 3(3): 49-50,52-53.

About the author

This article was written by Isabela Oliva is a biological scientist currently studying technology transfer.  She can be reached at oliva.isabela@gmail.com.

Susan Kling FinstonThis 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.

India’s new Prime Minister  Narendra Modi has asked Ministers to set ambitious targets for the first 100 days of government,. While the BJP Party Manifesto calls for implementation of incentives for R&D Intensive Enterprises, BioPharma wallahs eagerly await clear signals on IP policy directions, where latest reports indicate that the Modi Government’s first act may be to expand pharma price controls by raising the number of drugs on the essential medicines list.

My earlier posting on the BJP victory addressed urgently needed regulatory reforms to restore luster to Indian drugs, devices and clinical research and ensure patient safety domestically and in highly regulated markets alike. For insights into potential patent law priorities – and leaving the important issues of data protection and patent linkage for another day –  let’s look back ten years, and revisit the policies of the prior BJP Government.

As full disclosure, I represented the international innovative pharmaceutical industry in a number of developing countries including India in the run-up to the WTO 2005 deadline for adoption of product patent protection. I remember vividly the excitement in the room at the World Economic Forum (WEF) in New Delhi on December 6, 2004 as we awaited remarks of then-Minister of Industry and Commerce Kamal Nath.  Speaking to the WEF plenary late in the afternoon, Nath electrified the crowd with his pronouncement that India would not be wishy-washy in meeting its WTO trade obligation to adopt product patents for pharmaceuticals, and that it would be good for India. Three weeks later, Nath ushered in the new era of product patent protection on December 27, 2004 with a detailed policy Statement outlining the rationale behind the BJP’s Ordinance relating to the Patents (Third) Amendment.

Let’s review the pharma / biotech highlights in the Ministry of Commerce and Industry Statement–keeping in mind that the Ordinance was watered-down by leftist amendments before passage in March of 2005 (after the BJP Government was voted out of power).

  • The pharma and IT industry are described as sunrise sectors for India, increasingly following R&D-based strategies for innovative growth, and dependent on patent protection:

“Thus, while Indian companies spent not even a fraction of a percent on R & D ten years ago, today the larger Indian companies are spending in the region of 6 to 8 percent of their turnover on R & D. (The norm for major MNCs is 12%). The transformed Indian pharma industry is itself looking for patent protection – particularly the bio-tech sector, in which India has aggressive prospects.”

  •   Continued growth of Indian Indian pharma exports to the lucrative US market depended then, as now, on maintaining a patent system consistent with WTO norms:

“When we joined the WTO ten years ago Indian pharma exports were less than 4000 crore rupees. A decade later our pharma exports are 14,000 crore rupees, and account for more than a third of the industry’s turnover. This is the result of the confidence built up in our industry due to our progressive adherence to our IP commitments. Now we are poised to achieve an annual compounded growth rate of 30% in order to double our pharma exports in three years. Some 60 billion dollars worth of drugs are going off patent in the next few years. Indian industry can grab a lion’s share of this – provided we are a bona fide member of the international trading community[.]”

  • India also stood to gain from adoption of effective patent protection with growth in contract research organizations (CRO) services:

“Apart from manufacture of drugs, the pharma industry offers huge scope for outsourcing of clinical research. We have a vast pool of scientific and technical personnel, and recognized expertise in medical treatment and health care. India can take advantage of our strength in this provided we have the right legal framework in place, which provides IP protection to the results of that research.”

  • The vast majority of drugs would remain ‘off-patent,’ including essential medicines, preventing steep price rises:

“The fear that prices of medicines will spiral is unfounded. In the first place we must realize the fact that 97% of all drugs manufactured in India are off-patent, and so will remain unaffected. These cover all the life-saving drugs, as well as medicines of daily use for common aliments. In the patented drugs also, in most cases there are always alternatives available.”

  • The Act sought to balance access, affordability, and conformity with international IP protection norms:

“The Act ensures that the reasonable requirements of the public with respect to availability and affordability are taken care of. Public interest particularly public health and nutrition is protected. The law effectively balances and calibrates Intellectual Property protection with public health concerns and national security. By participating in the international system of intellectual property protection, India unlocks for herself vast opportunities in both exports as well as her potential to become a global hub in the area of R&D based clinical research outsourcing, particularly in the area of bio-technology.”

While hindsight is 20/20, in retrospect the Ministry of Commerce and Industry Statement appears prescient in identifying key stakeholders and the broader social and economic benefits of a product patent protection. Undoubtedly, the BJP Ordinance itself suffered from lacunae – and received significant criticism from the international innovative BioPharma industry.  At the same time, the Ordinance was recognized as a critical watershed and a substantial, positive step to move India closer to the patent mainstream.  The identified deficits in the BJP Ordinance subsequently were compounded and multiplied by subsequent Leftist amendments, effectively undermining patent protection needed by India’s innovative BioPharma companies and MNCs alike.

Let’s hope that ten years on the Modi Government may see the broader picture beyond price controls for essential medicines and may introduce patent reforms needed to reset the balance between access, affordability and effective patent protection.  This would go a long way to meet the BJP Manifesto to support R&D Intensive Small and Medium Sized Enterprises (SMEs) needed for creation and assimilation of new technologies, e.g., novel diagnostics, devices, therapies and cures for patients in India and globally.

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

My maiden guest post for the Biotechblog last focused on the global impact of reduced funding for innovative bio-pharma development on clinical research and the threat to the global clinical research enterprise.   At that point the clinical research sector in India looked like an outlier with year-on-year increases in clinical trials and revenues projected to grow from $450 million in 2011 to $1b by 2016.  Now as we approach the end of 2013, that rosy scenario appears increasingly unrealistic.  India’s clinical research sector faces an uncertain future, with allegations including lack of informed consent and poor treatment of illiterate Indian patients.

Responding to civil society allegations of corruption and fraud, the Indian Supreme Court has intervened directly in the conduct of clinical research in India, suspending or freezing hundreds of clinical trials.  While it is tempting to put the blame for lax enforcement of standards on the recent influx to India of MNC clinical trials, India’s Parliamentary Standing Committee on Health and Family Welfare identified similar shortcomings in oversight of both domestic Indian companies and MNCs alike, going back several years in time.

Well ahead of the Indian Supreme Court decisions in 2013, the Parliamentary Standing Committee reported in May of 2012 that  the Central Drugs Standards Control Organization (CDSC) – the primary watchdog responsible for drug safety and related clinical research – had long since been captured by the industry it was charged with regulating:

The Committee is of the firm opinion that most of the ills besetting the system of drugs regulation in India are mainly due to the skewed priorities and perceptions of CDSCO. For decades together it has been according primacy to the propagation and facilitation of the drugs industry, due to which, unfortunately, the interest of the biggest stakeholder i.e. the consumer has never been ensured. p. 9  

The Parliamentary Standing Committee cited systematic fraud, for example, in the case of Cipla’s application for approval of cancer drug Pirfenidone.  The Committee concludes that Cipla never undertook the required Phase III clinical trial in India, and yet the company received marketing approval nonetheless.

Not only the regulators, but Indian academics and specialist hospital physicians are also compromised in the process.  The Committee’s report to the both chambers of Parliament continues, documenting that the company coordinated or otherwise controlled simultaneous submission 4 separate letters of recommendation of approval from institutions located in Delhi, Mumbai, Chandighargh and Secunderabad – all received exactly on the same day 2-7 2010 and diarized by DCGI office under consecutive references 4877, 4878, 4879 and 4880.” (p. 34)

(In October of 2010, Cipla issued a glowing press release announcing the launch of the “World’s First Generic Pirfenidone in India, Giving Hope to Suffers of IPF (Idiopathic Pulmonary Fibrosis)”  Despite the strong documentation presented to both Houses of Parliament supporting the contention that the Cipla did not conduct any clinical trials at all prior to approval of this first generic copy of a serious cancer drug, it remains on the market in India and internationally via Canadian online pharmacies – caveat emptor.)

Now the India Supreme Court process has taken matters to the other extreme, creating onerous and unrealistic new clinical research requirements and freezing clinical research in India, far exceeding requirements under the  International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human use, known as ICH. These include mandatory compensation requirements for patients, and use of audio and visual recordings of informed consent, among others.  Paradoxically, by imposing more stringent obligations than exceed ICH standards, the Indian Supreme Court rulings further reduces the likelihood that India can build needed capacities for ethical clinical research in compliance with international compliance.

In this context,  a clinical research advocacy group known as: People for the Advancement of Clinical Research – India, has lodged an online petition at Change.org and petitioning Supreme Court of India: “Allow the Review and Approval Process for Clinical Trial Applications to Resume.” The Change.org petition provides compelling reasons for the continuation of clinical trials in India – identifying the existing standards and the extraordinary new measures now required under the recent Indian Supreme Court decisions.  Everything in the petition is both true and  yet sadly irrelevant given what we know to be the unfortunate ground realities documented by the 2012 Parliamentary Standing Committee report.

The Change.org petition seeks to reinstate the status quo ante without any serious reflection on how things have gone wrong, or suggestions on how to change a drugs development culture that tolerates cutting of corners and even outright fraud.  All good intentions aside, Indian academics, industry and government agencies together have shown remarkable effectiveness at evading and undermining India’s compliance with ICH standards.

The Indian Supreme Court may have got it wrong, but the Change.org petition does not get it right.

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 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
Perhaps like me you are working and not on vacation this early August.  If so, I hope that you will join me in a mental vacation to the Emerald Isle.  So close your eyes and think of biotech in Ireland.

One data point that may come to mind is the country’s famously low corporate tax rate, particularly following recent reports of M&A activity driven in part by the opportunity to “buy into” Ireland’s 12.5% corporate tax bracket.

The buyer, Perrigo, may be the largest pharma company you never heard of:  a Michigan-based company with strengths in over-the-counter (OTC), generic prescription, and active pharmaceutical ingredients (APIs), nutritional products (formula, supplements), and related consumer products.

In a deal announced July 29th, Perrigo is buying Irish biotech Elan for $8.6 billion and moving to Ireland, reportedly to save $150 million annually in corporate taxes. This latest news involving a major U.S. company pulling up stakes and moving to Ireland to save on taxes likely may relaunch debate by American states over the plusses and minuses of “Ireland’s model for growth using state money and incentives to lure private biotechnology companies.”

So just how likely is it that tax rates are a key driver for M&A decisions and broader biotech growth?  Not very.

It may be unsettling to hear about a major U.S company jumping ship and giving up its nationality for reported tax gains, given our complicated feelings about homeland and nationality.  Corporations, however, are not people – sorry, Mr. Romney – and when they get to be as big as Perrigo, may not retain a clear national identity.

Perrigo’s strengths in generics and OTC products are driven, for example, through international acquisitions over the last decade, including Agis Industries (Israel), Galpharm Healthcare (UK), Laboratorios Diba (Mexico), and Orion Laboratories (Australia, New Zealand), among others.   Given ongoing operations of affiliated business units in Australia/New Zealand, Europe, Latin America, and the Middle East, how American is Perrigo – even before the Elan takeover?

More broadly,  as noted back in Biotechnology in Countries Starting with “I”  (Part 3  –  back in March 2013), Italy, and not Ireland, places third in the EU for biotech after the UK and Germany, as measured by the number of pure biotech companies. Italy’s corporate tax rate is nearly triple that of Ireland.

How does Ireland stack up in the EU looking –  beyond straight numbers of pure biotech companies?  According to the EU’s Innovation Scoreboard (2013), Ireland is the tenth (10th) most innovative market for biotechnology in Europe, falling short of the most successful biotech markets in the EU.

Using its own composite index including human resources, firm investment, strength of research systems, entrepreneurship intellectual assets and related economic impact, the EU’s top-4 picks are Denmark, Finland, Germany and Sweden.  Corporate tax rates play a limited role at best, in the biotechnology ecosystem.

Will we likely see similar transactions this year, where companies outside of Ireland acquire Irish assets and relocate to the Emerald Isle?  Possibly, given that M&A is again on the upswing and at least two Irish healthcare companies are rumored as attractive take-over targets.  There has to be more on the table than a more favorable tax rate to justify a term sheet, as one analyst has noted:

“A deal that is solely driven by tax purposes could be a slippery slope.” 

 

Susan K. Finston is President of Finston Consulting LLC, and, together with biotechnology pioneer Ananda Chakrabarty, is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivoresearch. She is currently preparing to launch her first Crowd Funding campaign for Amrita Therapeutics first-ever therapeutic oncology medical device. For more information see AmritaTherapeutics.com or FinstonConsulting.com.

 

This guest post is from the BiotechBlog Intern,  Fintan Burke. Fintan is a student at the School of Biotechnology at Dublin City University. Do you have a response to Fintan’s post? Respond in the comments section below.

One of the more enduring financing trends in recent years has been to turn to public interest to help fund for research. As Susan Finston has noted on this blog before, the successes seen in other areas has more recently been translated into the biotech world, with such sites as Petridish.org and scifundchallenge.org forging ahead in public financing in the sciences.

For emerging technologies a new website promises to add an extra aspect to the crowdfunding framework; innovation in the technology itself. Marblar.com was recently established in order to facilitate crowd-orientated uses for new technologies developed by the patent holder.

Marblar cofounder Gabriel Mecklenburg explains new technologies have limited potential under the old system. “You typically have a physics technology and a professor comes down from tech transfer office, talks to their physics guy and those two people – [who] may be opposed to being thrown into the mix – will then have to come up with the best way of applying this technology. We figured ‘well that’s maybe not the best way of doing it.’ Science has become such a vast field now these days that maybe actually the physicist isn’t the best person to find that killer application for this piece of physics technology.”

“So we figured to really open up the sectoral process to a much much wider crowd and break down the technologies in a way that a non-expert could understand them and open it up to anyone around the world, be they neurologist, chemists, engineers, business people- get all these different perspectives together and create this kind of crowdsourcing platform where [what] we do is put each technology out as a competition and say ‘Okay, come up with the best new market application, the best new way of using this technology.’”

Marblar works by having the patent holder post their technology up on the website and having the community suggest potential applications. Those viewed as particularly innovative get voted on and discussed before entering a final shortlist. The community then continues to vote for what is deemed the best use of the new technology, which is finally selected by the technology holder and is rewarded with a cash prize and points towards their Marblar profile. “Ultimately it’s not a life changing amount of money. More importantly than that there is this community that we’ve built all working towards the same goal that I mentioned earlier; realising the promise of science and actually being in this community of really really bright, motivated people and working with them and collaborating in coming up with these ideas is actually hugely rewarding for a lot of these people, much more so than the money. It’s what drives actually self creativity, pretty senior people in some cases, very very qualified people spend a lot of time on the site and developing these ideas.”

In order to open up the doors for innovation as wide as possible, Gabriel and his team have put considerable effort to elucidate the technology. “We actually spend quite a lot of time digesting down the key features of the technology and presenting them in a way that makes them easily understandable to someone who’s coming cold to the technology. And one key feature of the platform itself is its open nature; that the inventors can interact in real time with the crowd. So the inventor can actually mould each idea with their feedback pack and that way – even if the original application wasn’t quite technically feasible – through this real time tech feedback between the crowd and the inventor the ideas are actually shaped into much more feasible incarnations. You do want the outsider’s perspective.”

As crowdfunding in science grows, the benefit of the outsider’s perspective is increasingly being recognised. As Jeanne Garbarino notes in her post at Nature.com, the growth in science-based crowdfunding has helped lead the way in a new era in connecting science to the general public. By opening their project funding (or even part thereof) to the public, there is an extra imperative to scientists to explain and engage with the public about their research, their methods and eventually their end goal. This potential for outreach-through-crowdfunding is being recognised by websites such as scifundchallenge.org which aim to not only raise funds for research, but also help researchers with outreach activities and help the public connect with the work being carried out. In one of the first papers to fully explore the psychology of crowdfunding from the individual’s perspective, Crowdfunding: Why People Are Motivated to Post and Fund Projects on Crowdfunding Platforms, Elizabeth Gerber et al found that as crowdfunding grows and becomes more common, people will tend to be more discerning about who they choose to fund, increasing the imperative for researchers who choose to crowdfund their research to illustrate its benefits. In the same paper, however, they noted that people who chose to undergo the crowdfunding route found added validation to their work, establish long-lasting professional connections and expand the awareness of their work to both the public and other like-minded professional bodies, thereby helping to increase their chances of getting funding through crowdsourcing in the future.

For Gabriel and the rest of the team at Marblar, having a simplified, accessible explanation for emerging technologies has already shown itself to be beneficial in reaching a wider-than-predicted range of people looking to be a part of the next big thing. “Where our last count it’s people from a hundred and thirteen countries and that’s really running the gamut all the way from a gang of high school students that are sneaking past the age limit all the way to emeritus professors kind of spicing up their retirement by having a go at some of the new science coming through some cutting edge discoveries.”

In a 2001 paper Belinda Clarke suggested that the best way to tackle the worsening lack of interaction between researchers and the public would be to create a forum where the two could interact in non-technical dialogue, away from issues of the media and interest groups acting as middle men and obscuring the message. With the financial appeal that crowdfunding offers and the relative ease in collaborating and explaining to the public about emerging technologies, researchers may yet realise the benefits to putting their mouth where the money is.

About the author:

Fintan Burke is a student at the School of Biotechnology at Dublin City University. His main fields of interest include biomedical therapies and recombinant organisms.  Fintan may be contacted at fintan.burke2@mail.dcu.ie .