So, you want to build a biotech company? I. Elaine Allen, PhD Visiting Professor of Epidemiology & Biostatistics, UCSF [email protected] When is science ready to become a business? Is Translational Science: From Bench to Bedside or From Bench to Boardroom? “There are too many science projects masquerading as companies…” Karen Bernstein, BioCentury 2010 You can spend a considerable amount learning PoC PoC http://www.healthtech.com/Proof-Of-Concept/ Overview Let me hear a little bit about your start-up ideas, plans… A little more background on my companies A short Proof of Concept (PoC) story to get started Some Caveats & Basics for Start-ups Different types of PoC & when you might use each Let’s start with a short proof of concept story SciFluor L i f e S c i e n c e s Enhancing Drug Properties… …through Late-Stage Fluorination an allied minds company Founded in 2011 by Tobias Ritter, PhD, MBA & Assoc. Prof @ Harvard in Chemistry, Takeru Furuya, PhD, & Don Ciappenelli, PhD The Proof of Concept (for the next round of funding & for Big Pharma partners) was to show the improved profile of 20 marketed pharmaceutical compounds chosen from a database that shows compounds: we can fluorinate with high probability; we can own (i.e. the fluorinated version is a NCE we can patent); and once fluorinated, have the potential to improve drug properties increased half-life / reduced dosing frequency blood-brain-barrier / cell membrane penetration increased bioavailability How would you do this? Create an integrated database of compounds Takeru’s initial matrix FDA approved drugs FDA designated orphan drugs Drugs in Phase 3 Drugs that failed in Phase 1 or 2 Include the chemical structure in the database The final (proprietary) database was an integration of all of the above and linked to papers & FDA & company documents and was (ultimately) a great marketing tool as well as scientific index of compounds. Caveats for successful startups... Select science with commercial potential – solve a problem rather than just a brilliant idea Secure intellectual property Bet on the jockey, not on the horse Establish frequent and candid dialogue among investigators and stakeholders What about a business plan? What is your ideal (and not so ideal) exit strategy? What NOT to do: Involve people who are problematic (ever) Share too much with VCs/Angels without NDA Screw up the IP Limit the possible upside Set a price for a small, early financing round Start believing your own BS 8 A Mantra of Sorts: $ DATA Dollars & Data: One leads to the other How to Think About Proof of Concept PoC is not just one experiment at one time PoC is harder in biotech start-ups than established biotech/pharma companies Think of PoC as part of the exploratory science and have a checklist of what you need to show Realize that therapeutic/diagnostic studies may be valuable even if they have low power Don’t undertake POC studies unless you understand how you might use it to cancel projects Typical value inflection points in biotech development Early: Clearly articulated strategy (or maybe a business plan) Team (needs to show previous accomplishments & potential) License the key IP (may not be necessary in software based company) Initial proof-of-concept (in vitro, small animal, device prototype, validity & reproducibility) Later: IND-enabling studies (biodistribution, GLP tox) Clinical safety (animal models, human in Phase 1) Clinical proof-of-concept (small study) Phase 3 (large study with efficacy & effectiveness) Market validation (sales ramp-up) 11 Proof of Concept Objectives in Healthcare Validation of the relevance of your therapeutic or diagnostic in pre-clinical & early clinical Defining your potential market Show early evidence of clinical efficacy Eliminate blind alleys/failures early on (ARIAD example with the thromboerythrocyte) Provide an assessment of commercial potential Potential GO/NO GO Decision Criteria Safety & tolerability Bioavailability/Pharmacokinetics (PK) Pharmacodynamics (PD) Duration of action Relationship of PD to dose Early efficacy (what about effectiveness?) Commercial viability Proof of Concept should include an Evidence Evaluation of Competitors Systematic review of all the papers/reports/data that exist on Same outcome/disease Same therapeutic/diagnostic/type Search of all patents existing or filed for Example 1 – An evidence-based analysis for a proposed new asthma drug Question: Will a planned multicenter trial succeed in proving that drug P is better than drug Z? Step 1: Evidence synthesis (meta-analysis) of all sponsor’s trials of drug P vs. SBA drug Z. ! Drug P or Z vs. Placebo: All Outcomes Odds Ratio and 95% C.I. #Study/ Outcome Treatment Arms #Pts FEV 1 Z1 3 1042 FEV 1 P1 4 805 AM PEFR AM PEFR Z P1 3 4 1042 805 PM PEFR Z1 3 1042 PM PEFR P1 4 2805 Z P1 3 4 1042 805 agonist agonist -6 -4 -2 Favors Placebo 0 2 4 Favors Treatment DerSimonian & Laird Random Effects Model 6 Drug P or Z vs. Placebo: All Outcomes, adults Odds Ratio and 95% CI Outcome #Study/Arms FEV1 - All 5 REV1 - Adults only 3 A.M. PEFR - All A.M. PEFR - Adults only 5 3 P.M. PEFR - All 4 P.M. PEFR - Adults only 2 agonist - All 4 agonist - Adults only 2 -6 -4 -2 Favors Placebo 0 2 4 Favors Treatment DerSimonian & Laird Random Effects Model 6 Overlapping Treatments for new Asthma Drug Step 2: To show a difference between treatments, we can use the summary statistics from the metaanalyses to calculate the sample size needed Sample size needed = 27,000 patients per treatment group! The development of this compound was scratched Examples 2 & 3: Software/algorithm based start-up StatSystems – algorithm for titrating the Protamine dose in bypass surgery Algorithm developed in my MBA stat class by MD/MBA student Initial validation by randomized open study – safety outcomes Prototype built for handheld device and single-blind study at MedCollPA & HospUnivPA Plans for handheld bedside device for titrating asthma drugs but company sold Examples 2 & 3: Software/algorithm based start-up MetaWorks, Inc – Evidence-based synthesis company Meta-analyses are time consuming & require special skills Build up client-base running as a consulting company Receive AHRQ grant Develop proprietary database – create Breast CA product Raise $2 million but difficult – not patentable product Merge company with United Biosource (non-compete for 1 year) Finally, what if data are your product or generated by your product? Example 4: Data are the product SmartSports develops the SmartKage Partners with Sportvision for on the field data How to leverage the remaining data? Financing - Critical Path $ Generate $$ thru side application (Centocor diagnostics, Vertex technologies) 3 F’s (friends, family, fools) Grants (SBIR, DARPA) Angel investors Venture capital Partnering $ Public offering (institutions) Merger/acquisitions What companies are getting financed? Experienced management (remember the Jockey) Companies with products - clinical stage or later (should you license in something? Stromedix example) Companies already owned by investors Companies with clear milestone-driven events Companies with revenue that provide services leading to products What is the future of Biotech? Questions?
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