Download - From Invention to Innovation In Biotechnology:Strategic and Tactical Approaches to Taking Risks In A High-Stakes Sector

16 Nov 2010 ZephyrBiotech LLCElise Brownell, PhD.

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Elise Brownell, PhDFounding Partner, ZephyrBiotech, LLC

[email protected]

925-639-0444

From Invention to Innovation In Biotechnology:Strategic and Tactical Approaches to Taking Risks In A High-Stakes Sector

http://www.zephyrbiotech.com/


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Why Is the Life Science Sector Different?Factoids

Life Cycle from Discovery to Market?


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Life Cycle from Discovery to Market?10-12 Years


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Cost?


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Cost?$1 billion (Adams and Branter, 2010)


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Best Odds of Seeing a Clinical Project go to Market?


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Best Odds of Seeing a Clinical Project go to Market?1 in 10


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Sunk (Operational) Cost to get to the Clinic?


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Sunk (Operational) Cost to get to the Clinic?$3-5 M


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Entrepreneurship = Invention + Innovation

Invent:

To think up; devise

Innovate:

To make changes in the way things are done; to introduce new methods, processes, devices.


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Invent:

To think up; devise

Innovate:

To make changes in the way things are done; to introduce new methods, processes, devices.

BRINGING IDEAS TO LIFE

Entrepreneurship = Invention + Innovation


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Allocation of VC Investment $ By Sector2009

Software18%

Clean Tech11%

Internet17%

Med Dev15%

Biotech21%

Healthcare Services

1%

Other17%

Percent Venture Investment Dollars, 2009


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Regional Allocation of VC Life Science Investment $, 2009

Bay Area29%

Boston16%

San Diego10%

NY7%

All Others38%

ZephyrBiotech LLCElise Brownell, PhD.

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Regional Distribution of Deal Volume2010, YTD

16 Nov 2010

NE21%

NW4%

CAL34%

Mid Atl21%

Other20%


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Life Science Subsector Distribution of Angel/VC Investment YTD through 11/5/2010

16 Nov 2010


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Regional Distribution of Deal Volume2010, YTD

16 Nov 2010

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Tx Dev/Del Dx/PM Tech Plat

Other

Mid Atl

CAL

NW

NE


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Regional Allocation of 2009-10 Qualifying Therapeutic Discovery Grant Funds

California29%

NE15%

Mid Atlantic21%

NW4%

All Others31%

Regional Allocation of 2010 Qualifying Therapeutic Discovery Grant Funding


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Current Trends in Investment Climate

• Re-emergence of R and D Limited Partnerships

• Shift to major pharma for financing and development support


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% Financing $ from Specific Sources (redrawn from Burrill 2Q 2010 Report)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 1Q 09 1Q 10 2Q 09 2Q 10

Pe

rce

nta

ge o

f B

iote

ch F

ina

nci

ng

$ f

rom

Sp

eci

fic

Sou

rce

Quarter

Partnerng

Other

VC

Debt

PIPES

Follow On

IPO

16 Nov 2010


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• Corporate and strategic partnering at earlier stages

• Re-defining “product” to include IP and Clinical Proof of Concept Validation– Re-sets the value inflection point


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Average Investment (M USD) By Stage (Through 10/8/10)

0.00

5.00

10.00

15.00

20.00

25.00

Disc/Res PC Tox Clin Sub/Launch

Ave

rage

Inve

stm

en

t, M

USD

Stage of Development


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Average Investment (M USD) By Stage (Through 10/8/10)

0.00

5.00

10.00

15.00

20.00

25.00

Disc/Res PC Tox Clin Sub/Launch

Ave

rage

Inve

stm

en

t, M

USD

Stage of Development

Invention Innovation


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• Corporate and strategic partnering at earlier stages

• Re-defining “product” to include IP and Clinical Proof of Concept Validation

Need for taking risks, building value, and creating organizational coherence at ever earlier stages


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Attributes of Agile, Entrepreneurial Life Science Companies

Traditional, Legacy-based

Entrepreneurial

Decision Making Reductive Holistic and Matrixed

OperationalFocus

Work breakdown structure

Flow, value-creation

Regulation Focus Metrics-regulated Self-regulated

Planning Style Anticipatory, prescriptive,directive

Hypothesis creation

Process Style Optimizing; efficiency oriented

Adaptive; series of fitness tests


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Creating Value: The Differentiated PTP

• Living statement of unique value proposition– Invites cross-functional conversation– Oriented to Doing the Right Thing– Holistic– Contextual: Competitive environment and effective

knowledge management practices

• Sets minimum requirements– The null hypothesis– Alignment re: stop criteria (early elimination)

• Builds resilience and coherence– Stable reference point for problem solving , recovering

from organizational arrhythmia– Promotes smoother stage transitions


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Creating Value: Building a Decision-Based Organization

• Decisions as value-building products: risk reduction

• Engages entire organization

• Embeds CONTEXT and MEANING to actions

• Shifts organization to self-regulating rather than only metrics-regulating

• Creates transparency and accountability

• Ensures resource-relevant triggers are pulled at right time, to fit stage of project


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Decision-Based Timeline:Asking the Right Question at the Right Time

Who are

partner(s)

for

production?

PRODUCTION

How much

material will

we need?

TOXICOLOGY

Which CROs

do we

interview?

CLINIC

Which

CROs do

we hire?


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Allocation of Costs Across Functional Areas Through Phase 2 Clinical Development

53%

23%

24%

CMC/Mfg

Preclinical

Clinical


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Creating Value: Knowledge ManagementXIgnorance

• Imperative to introduce time and venue for distilling information into knowledge and wisdom

– Reduces unnecessary duplication

– Allows trends, new insights to emerge

– Essential in driving decision making

– Supports organizational memory in a climate of turnover

Creating Value: Eliminate Fear-Based Behaviors and Practices

• Assume success

– Reduces redundancy and distraction

– Requires anticipatory spending prior to results

– Requires best-practices problem solving

– Requires a change of language from “We won’t be able to do that” to “What’s keeping us from doing that?”

• Make communications transparent

– Both internally and externally

– Builds credibility


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Summary

• Meeting timelines Growing value

• Early integration of invention and innovation as a business model imperative

• Key tools:

– Differentiated PTP

– Creation of a Decision-based culture

– Incorporating Effective Knowledge Management Practices

– Eliminate Fear-based Cultures

• Tapping alternative sources of funding


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Download - From Invention to Innovation In Biotechnology:Strategic and Tactical Approaches to Taking Risks In A High-Stakes Sector

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