Bruce Booth, an early-stage biotech venture capitalist, writes about drug development, biotech funding, and company building.
HN commenters recommend it as one of few blogs by top-tier early-stage biotech VCs, and cite its data on time from investment to IPO.
The less FDA the better to my eyes. The incentives are broken, and the FDA is greatly slowing progress at a time when the potential to create new medicine is greater than ever before. Regulation is reason why we don't have the first fruits of the biotechnology revolution in the clinic today.
The much-touted ballpark estimate of a billion dollars to produce a modern pharmaceutical from start to finish is about a decade old now - that figure is adjusted for today's diminished dollar value, eroded by inflation. You can replace "pharmaceutical" with any medical technology that is going to require a fair amount of original research and further tinkering in the laboratory to obtain the first working prototypes and the result is much the same. This large round number is the kitchen sink cost across a decade of work, including failed attempts and the opportunity cost of investment. The lion's share of the direct expenditures are imposed by regulatory requirements: trials, data, and more trials.
It has long been my position that almost all of the work carried out in the US at the behest of the FDA to prove safety is unnecessary. In fact it is counter-productive, as the immense imposed costs on development shut out a great deal of the experimentation and small-scale initiatives needed for rapid progress. Much of what the FDA demands is not demanded by similar regulatory bodies in other parts of the world, and even their requirements are very onerous in comparison to the standards in…
Hi Nextos,
First you'll need to identify VCs that would consider funding you. There are some VCs that exclusively focus on reformulations, others that focus on devices, others that do HealthIT, and some that do new drug discovery.
If you're going to a VC and they don't have a track record of investing in similar technology you're likely outside of their comfort zone and/or investment thesis and they will likely pass.
Second, once you've identified your target firms, find some of their portfolio companies and offer to meet exec at the company. I would explain what you're working on, try to share your vision for why the project you're working on is 'frightenly ambitious' and why you can actually pull it off. If you've done a good job at convincing this exec, I'd followup with a request for an introduction to their VC investor.
Alternatively, (or perhaps in parallel), I would look into getting an intro from a professor at Cambridge! Many professors in biological research have some ties to investors (as consultants) or companies via former students or projects that have gone through their lab. As a current grad student, I imagine such a meeting would be trivial to setup but be prepared to rigorously defend your proposition before they expend their reputation by introducing you.
Whatever you do, don't cold email these VC firms. They get thousands of emails every year and they simply don't have the bandwidth to review them all. Which is why an introduction from a…
> I'll add that my own experience of licensing (my own) IP from a top-25 university TTO has been interesting
In my experience, there's a lot of variance between universities, and even between tech transfer officers within a given university. Another complication: at Harvard/MIT, where professors may have cross-institutional appointments, you need to nail down exactly who you'll be dealing with (for example, the Broad has their own TTO: https://www.broadinstitute.org/osap). There are also other issues, such as IIAs & CRADAs.
> What were your thoughts on the whole "cult of the molecule" thing from the interview?
As you said, it fails to take into account existing attempts to form partnerships by biotech VCs:
- http://lifescivc.com/2014/04/pushing-forward-with-collaborative-rd-models-in-biotech-roche-spero-and-biogen-ataxion/
- http://www.bizjournals.com/seattle/blog/techflash/2014/01/a-new-approach-to-biotech-investing.html
This is one of those situations where presumption of stupidity (http://www.aaronkharris.com/presumption-of-stupitidy) can be very tempting, given the magnitude of the problems that remain unsolved in the biosciences. It can also take quite a bit of digging to find this info - it's not splashed all over the front page of TechCrunch, like the latest batch of YC startups are.
(Since no one is pointing out Elephant in the room, I will do that).
YC has been around for 10 years. Average age of a company from First Investment to IPO in 2014 is less than 10 years (http://lifescivc.com/wp-content/uploads/2015/02/Time-From-VC-Investment-to-IPO_Feb2015.jpg Source 1.)
Personally, I believe startups excel when odds were stacks against us (forced to innovate and make founders strong and tested). I think YC or any incubator has a structure that shields companies from facing challenges initially.
I don't think Incubators are proven to be a great Idea yet ( if you are someone with industry experience rather than a fresh graduate).
1. http://www.forbes.com/sites/brucebooth/2015/02/24/tortoise-hare-revisited-time-to-ipo-for-vc-backed-startups/
The cost to develop a new drug is, on average, $2.6 billion (see, e.g., <http://lifescivc.com/2014/11/a-billion-here-a-billion-there-the-cost-of-making-a-drug-revisited/>), including the amortized costs of failed candidates.
Or, put another way, it looks like a new aircraft supercarrier would be cheaper than a cure for Alzheimer's. Whatever the true cost of drugs are, it's clearly not pennies.
The current system for evaluating a scientists reputation and integrity is hardly perfect - it is estimated that fewer than 50% of data in published papers can be reproduced (http://lifescivc.com/2011/03/academic-bias-biotech-failures/). By creating a marketplace that has feedback and reputation it might be possible to actually improve basic "integrity" in scientific research