Category Archives: – Brady Huggett

– Brady Huggett

New Bioentrepreneur article

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We’ve posted a new article, Shape Shifting, to the Bioentrepreneur site. The piece examines how to mold a company’s pipeline and opportunities, making it most attractive for partnering or buyout. It was written Bob Baltera, CEO of Amira (at the time), and the title refers to the necessity of changing the shape of a company as it progresses.

But shape shifting could also refer to the article itself. The process began early this year, after a meeting with Bob at the JP Morgan healthcare conference. The article went through several drafts and took months to put together — long enough for Amira to be snapped up by Bristol-Myers Squibb for $325 million, with another $150 million hooked to milestones.

Which meant we had to go back and reshape the article before publication to reflect this new outcome for Amira. Even without milestone payments, the buyout is a big win for Amira investors, who had put $28 million into the firm. It is outcomes like this that keep VCs interested in biotech.

You can read the HTML version of the article here, and the PDF version here.

Brady Huggett

Bioentrepreneur article online

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Our next article is live on the Bioentrepreneur website. Titled In vogue with venture, it was written by Gary Patou, managing director at MPM Capital. (You can find his bio page here.)

His piece details what MPM finds attractive today, and explains why. He also provides some insight into companies MPM has invested in recently, and discusses the reasoning for turning down an opportunity with a type 2 diabetes drug. You can read it here; for the PDF, go here.

We’ve also highlighted an article from the Bioentrepreneur archives. It investigates non-dilutive funding from foundations. Click on the link to read it.

Brady Huggett

Bioentrepreneur article online

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We’ve posted a new article on the Bioentrepreneur website, Headwinds into Opportunity, by Prabhavathi Fernandes. The author is CEO, president and founder of Cempra Pharmaceuticals, and she previously helmed DarPharma, Ricerca Biosciences and Small Molecule Therapeutics. She’s also worked at BMS and Abbott. For more on her background, go here.

Her article details the obstacles in Cempra’s path at founding and as it attempted to derisk itself for investors by taking on an additional compound. These hurdles included an uncertain environment at the FDA, as Cempra’s main program was related to telithromycin, which had shown serious side effects on the market.

You can read the piece here online, or you can view the PDF. There is also a featured article pulled from our archives dealing with valuation for investors – read that here.

Brady Huggett

Your questions, answered (or at least discussed)

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A Trade Secrets reader recently emailed me to ask if we might supply a post on this question: “How would an entrepreneur or small biotech raise funding, after having biological proof of concept?”

I put that to our authors. I received a handful of answers (pasted below), and also a few promises to tackle that question in coming posts. As always, feel free to direct remarks or further questions to the authors in the comments section.

David Wilson, whose experience is from China and the US, said: On the surface I have witnessed all types of financing vehicles, from traditional banking to self-financing through personal credit cards. The short answer is that financing is available, and you have to pursue all avenues if you are passionate about your business.

Fahd Al-Mulla said he’d take up the topic in a future post, but also said: In Kuwait we have a governmental agency that funds small businesses and entrepreneurs. If you work in Kuwait University, there are business incubators, etc., available.

He pointed to this post as useful information.

Chris Hillier said: It is a straight-forward question but perhaps not as simple to answer. From my experience in Scotland, proof of concept is a direct step out from the laboratory science. The science has been developed, usually by an academic, and has been tested at the PoC stage with the market potential already in mind.

At this stage, often the entrepreneur/start-up is still not investor-ready and probably has an embryonic business plan and an incomplete view of the market. Often this is accompanied by an over-confidence in the potential of the product and an over-valuation of its worth. So, there needs to be a period of commercial due diligence that should be honest, highly critical and realistic. Assumptions must be justified and any supporting case histories or comparators used must be truly analogous. It is vital that the entrepreneur himself/herself challenges his/her own assumptions at this stage prior to approaching the angel or VC investor. If affordable, independent diligence would be a good investment.

In Scotland there are a number of government-sponsored initiatives that would support these activities. These are incredibly helpful and provide young start-ups with a great support at this stage.

Then it is a matter of using all and any means to get onto the radar of funding opportunities. Depending on a number of factors (cash requirement, time to market, management experience, market need, level of disruptiveness) this can take a long time and a lot of work. Though if you are in the right space, at the right time, with the right technology, this might be rapid.

The process of interacting with the VC is a whole story on its own, though I personally have presented 52 times over the last 15 years with different ventures, and yes, I was counting!

Viren Conde: From the Indian perspective, see Financing Know-Hows for Biotech Start-ups in India.

Prashanth Bagali: My experience is as an entrepreneur in Malaysia since 2005, and I’ve successfully incorporated two biotech/bioinformatics companies, raised Phase 1 and 2 fundings, as well as public grants.

He’s also launched products in the local and ASEAN markets, so he’s able to offer advice to fellow scientists, technologists and researchers.

Luiz Antonio Barreto de Castro: He’s blogged on this topic for us already.

John McCulloch offered his thoughts from the MaRS Centre in Toronto, Canada:

A. If the innovator is an Ontario start-up company they would likely qualify for the full range of services provided by MaRS Discovery District, i.e. access to advisory services from a panel of >20 life sciences industry veterans (pharma, biotech, VC, legal, regulatory), eligibility for a program to bring in an experienced executive to assist in fundraising, access to incubator space, eligibility to apply to the MaRS Investment Accelerator Fund ($500-1000K seed funding), investment pitch training, business plan assistance and inclusion in angel investor, VC and strategic partner events hosted by MaRS.

B. If the innovator is a Greater Toronto Area academic, the process would be a bit different. The technology would first be disclosed to the appropriate technology transfer office, who would then pass it on to MaRS Innovation – a federally funded group that has first-look rights to all academic IP in this region. If MaRS Innovation decides the data is compelling and the market need is sufficiently strong, it will fund additional de-risking studies (up to early clinical studies) and the development of a robust IP estate. The goal is either to use the technology to create a spin-out company (usually a portfolio of related technologies in each company) or license to a strategic partner. MaRS Innovation is also staffed by industry experts and they are responsible for the development of each sponsored technology.

Simply put, both MaRS initiatives are intended to increase the odds of successful development of strong innovations whether academic or private in origin. Go here for more.

Others should be weighing in on this coming up. Stay tuned.

Brady Huggett

New Bioentrepreneur article

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We’ve put a new article on the Bioentrepreneur site, written by Simcha Jong. His piece, Commercializing a disruptive technology, offers perspective and advice to bioentrepreneurs developing new technologies. It is broken loosely into two parts, covering product and platform strategies.

Being at a technological forefront means there’s a lot to consider, even before you start. For example, most biotechs turn to partners for help with the later stages of development. But for those in a brand new field, who would those partners be? Also, how do you best consider approval if your product is the first in a new class of drug? The piece discusses this and more.

This is Jong’s second article in Bioentrepreneur: early in 1990, we published When times get tough. That article doled out advice for biotechs on surviving a financial downturn. Although the world is climbing out of the official recession that crushed all of 2008 and part of 2009, it’s still an informative read today.

Comments about either piece are welcome on this blog, and if anyone is inclined to contact the author directly, Jong can be reached via his email listed on the article.

Brady Huggett

Boiling Things Down

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I haven’t had a chance to mention this yet, but Monday night’s reception at the Newseum was packed, pretty loud and interesting. The most memorable thing for me was the exhibit on Pulitzer Prize winning photographs.

The images are haunting. You don’t receive the Pulitzer for pictures of kittens dozing among tulips. Winners included images of an execution in Saigon, Kosovo refugees passing a baby over barbed wire, and the reaction of students amid the Columbine massacre here in the US. Each picture seemed to show either an attempt to end a life, or efforts to protect/save one, so they stick with you. The picture at the top of this post won the Pulitzer in 1958, and was one of the sweeter photos in the exhibit.

Back to biotech. I had a meeting scheduled this morning with Francesco De Rubertis, to catch up and talk about the industry. He’s a partner at Index Ventures and was lead author on a Bioentrepreneur article a few years ago that focused on how to build a sustainable biotech company. (You can read that article here.)

Even before he was a venture capitalist, Francesco was concerned with turning research into products, and he thinks it’s important for scientists to adopt that business mindset. He himself moved right from academia to the VC side, because he felt building healthcare companies is one of the most direct ways to impact humanity. There’s a chance we’ll do a podcast later for the Meet the Author section of Bioentrepreneur.

I also spent some time milling around the country pavilions in the exhibit hall, talking with emerging biotech communities. I walked away from the Czech Republic booth with a CD database of the country’s biotechs. Overall, it shows 39 biotechs, and 308 ‘research entities.’

The survey breaks biotech down into categories: nanobiotechnology, bioinformatics, gene and RNA vectors, cell and tissue culture engineering, proteins and other molecules, process biotechnology techniques, DNA/RNA and ‘other.’ And the biotechnology itself is broken down into applications, such as human health (large molecule), human health (other), industrial processing, GM agricultural biotechnology, and the like. I won’t bother listing them all here, in the hopes of keeping this readable.

The CD lets you slice and dice all you want, and you can get some interesting looks. There are 15 companies focused on large-molecule human health, but only one focused on GM agriculture. (Given the attitude on GM crops in Europe, this makes sense, no?) There are eight companies that include ‘animal biotechnology’ in their description. There are two bioinformatics firms, and 13 focused on cell and tissue engineering.

Filtering will also give you an idea of the largest area of focus for Czech researchers, and where they are. There are 16 companies focused on DNA/RNA, and there are 160 research entities also investigating that category – both the largest percentage. And not surprisingly, most of the work is being done in Prague, Czech Republic’s largest and most populated city. Which means that a typical Czech biotech scientist, whether publicly funded or private, is in the DNA/RNA field and living in Prague.

There. I’ve neatly boiled down the entire CD to one sentence.

Brady Huggett

That Elusive Factor

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Day 1 of the BIO convention. The Walter E Washington Convention Center is a huge thing, split into two sections. Panel sessions run on both sides, and the exhibition hall (opening Tuesday) is below ground, spanning some great distance underneath it all. There are hundreds of rooms and people scurrying all over, yet I spent my first hour huddled in a quiet spot along a deserted corridor on the ground floor, talking to an Argentine. He’s working at the interface of science and research, helping Argentina recognize it can not only do routine biotech research, but also produce vaccines, antibodies and diagnostic kits right at home. He admitted that the science itself might not be new or groundbreaking, but translating that science into homegrown Argentine products is, and it’s been an important step. He’s put together a company (IncuINTA) to help facilitate the process. We talked about his background and the plans for IncuINTA, and in general, he’s just the type of person global biotechnology needs – gregarious, focused and passionate. You can find out more here.

Also spoke with Maxwell, a biotech venture fund focused on Russia. They have five portfolio companies now, though they also help non-Russian firms establish clinical trials in Russia. As a BRIC country, Russia is already considered an economy to watch, and it’s growing its biotech sector, too. Russia launched a program to help foster cooperation between the private sector and the government, and they’ve done that in the usual way – establishing economic zones for biotech, developing technology parks and by setting up venture funds like the Russian Venture Company. This has resulted in a few biotech clusters popping up.

We’ll have to wait and see what becomes of that concerted effort, because as much as every state in the US wants a biotech cluster, and nearly every country in the world wants to grow the industry in its backyard, it’s becoming less clear that this can be forced.

I sat in on an afternoon session titled “Taiwan: Post ECFA Era-Opportunities for Global Biomedical Market.” It turned out to be quite informative. Taiwan has 66 drug candidates in clinical trials, and it was the first country in Asia-Pacific region to introduce a venture capital industry. Taiwan’s Minister without Portfolio, Chin-Yi Chu, said Taiwan ranks third in the world in entrepreneurism, behind the US and Israel, and he said Taiwan ranks No. 1 in the world in patents per capita. (A good journalist would have spent the afternoon fact checking those statements; I did not.)

A strong VC presence is key for fueling a burgeoning biotech sector – that we know. And patents help protect research and investments. But Taiwan serves as a good example of how difficult growing biotech can be. First off, all those patents filed in Taiwan tend to be incremental, rather than pure innovation. And Chin-Yi Chu pointed out that in Taiwan, a professor is a desired, respectable position; a business person much less so. In fact, the pursuit of money is considered a rather vapid calling in Taiwan. (This is not a problem in the US, for better or worse.)

But perhaps the biggest strike against Taiwan is a lack of translational research. There is no collective mindset that envisions products from research. And if biotech is to drive the future economies of countries around the globe, there has to be nationwide efforts to turn academic research and publicly-funded lab work into something that can benefit patients and be sold. We’ve talked about it before on this blog – getting that mindset into the universities and researchers is hard to do. I’m not quite sure how to do it, but it’s proving a lot harder than convincing the government to throw a few millions at a biotech park.

Brady Huggett

BIO Convention 2011

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I’ll be attending the annual Biotechnology Industry Organization (BIO) Convention next week in Washington, DC. For those readers not familiar, it’s biotech’s largest gathering of execs, insiders and supporters – in peak years, the convention drew more than 20,000 attendees. The total has dipped since then, but it’s expected that more than 15,000 will descend on the capital this year. That throng includes the media – there will be hundreds of members of the press there.

Although academics and researchers certainly attend, it’s more a business meeting than a research one, and it’s a great event for biotechs in search of business partners. Countless eventual deals spring from meetings at BIO, and at the BIO Business Forum – set up to help broker meetings – more than 190 company presentations will be given this year, and more than 20,000 meetings have already been scheduled.

Along those lines, if you’re headed to BIO and are not sure how to ready yourself, take a look at “Prepare to Meet your Partner,” a Bioentrepreneur article written by Cori Gorman, Cammie Edwards, and Robert Meister.

The supplementary information for that article offers a checklist of activities for before, during and after the conference, and also suggests a press release format if you’d like to alert the biotech community that your firm will be at the show. We published the article in advance of the BIO Convention in 2009, but it’s as useful now as ever.

Though the BIO convention is usually held in the US (the exceptions being Toronto in 1994 and 2002), it draws from all over the world. More than 5,000 attendees will be from outside the US this year, and there are representatives from 65 countries registered to attend. That provides a perfect opportunity for exploring the themes of this blog – entrepreneurism and biotech building, with a slant toward emerging economies. The days are very long at BIO – sessions start before 9 am and the evening receptions can run until…well, they can run late. But I’ll be passing along relevant material I uncover while there.

Brady Huggett

Royal Society report

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For those interested in seeing how science is becoming internationally intertwined, let me gently suggest a new report by The Royal Society, titled Knowledge, networks and nations: global scientific collaborations in the 21st century.

It’s a 114-page PDF, and I’ll admit I’m but 20 pages in. Still, the executive summary alone has interesting information. For example: more than 35% of articles published in international journals today are internationally collaborative, the report says; 15 years ago it was 25%.

The paper also offers recommendations, including the one many researches want to hear – that even when recessions hit, national governments should continue to invest in science.

You can read the report here.

Brady Huggett

Protecting the Fortress

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We’ve just published a new article on the Bioentrepreneur website, this one actually a reported piece.  We’d been considering an article on the security measures needed for biotechs, in particular startups, for a while now, and after meeting Hamilton Mixon at BIO last year I thought we had a good base for the article.

He was integral in putting the piece together, with the contributions of a couple other security types from drug development rounding it out. It’s a topic we’ve never covered before, and you can read it here. It will stay as the featured article on the Bioentrepreneur portal until next month, when it will slide into the site’s archives.  It will also appear in the May issue of Nature Biotechnology.

Brady Huggett