26th October 2018
Getting Science into the Clinic
A study carried out by the Association of the British Pharmaceutical Industry (ABPI) shows that the amount of capital invested alongside Corporate Venture Capitalists into UK companies increased six-fold between 2010 and 2015, marking a fundamental shift in how Start-Up British biotech is funded.
Have you thought about the life cycle of these innovative Start-Ups and the process involved when developing an interesting candidate and eventual pipeline? This blog outlines a brief overview of how Biotech gets science into the clinic, understanding this helps us advise our clients and candidates as the Life Science industry continues to shift away from the traditional large pharma.
Once a compound has shown promising results in a university or R&D lab, the next stage is to accumulate further data to support the hypothesis. This naturally requires laboratory space, time and funding. Imperial Innovations Group plc, a spin out from Imperial College London was one of the first Academic investing bodies supporting this early translational research in London and Cambridge. These institutions however are rare. The more common form of support, to quote Thomas de Vlaam, comes from “the three F’s: Friends, Family and Fools”. Fools in this case being Crowd Funding, Angel investors, Seed investment, Charities etc. The initial typical investment lies between £300,000 and £2 million. The downside of some of some of these investment types is loss of equity at an early stage of the company’s growth.
Recently great efforts have been put into supporting the discovery and growth of start-ups through the emergence of Incubators, Accelerators, Grant programmes, specialised Venture Capitalists (VCs) and Corporate Venture Capitalists (CVCs). These organisations have shifted into an active role in the development process, providing access to laboratories, legal advice, leaders in the therapeutic area, entrepreneurs and funding. GSK’s corporate venture arm – SR One was founded in 2005 and is one the perfect example. SR One has been one of the leading investors in European biotech and in 2015 alone invested over £1bn across 170 start-ups including; Ablynx, Atopix therapeutics, Addex Therapeutics and Asceneuron.
Once positive results have come from accumulative data, the next stage will be IND, MAA or relative applications to progress into human clinical trials. Biotech’s now look to secure more substantial funding that is typically provided by VCs. In an interview with Labiotech, Martin Muenchbach, Partner at BB Biotech Ventures (one of Switzerland’s largest Biotech VC firms) highlighted some interesting points for Biotech’s to consider when searching for funding:
- Ensure you are looking for investment at the right time, when enough data has been drawn to support the premise and company objective.
- Understand the importance of intellectual property as several companies end up in court over patents rather than clinical trials.
- Avoid having too many investors and an overcrowded boardroom.
- Speak to everyone you can. (1)
This last point is interesting as it became a common theme in my own conversations with key industry leaders. Thomas de Vlaam- CEO of Amylon, last year’s winners of Start-up Slam, noted that securing investment is one of the most difficult things to do even when everything else falls into place, especially as it is extremely competitive. One the best drivers of a Start-up is recognition, which is essentially the responsibility of the CEO. An efficient way of doing this is by entering competitions. Similarly, Steve Brannan – CMO of Karuna Pharmaceuticals mentioned the importance of having experienced and reputable member/s associated with the company as this can attract repeat investments from VCs.
In contrast to Martin’s point, to avoid an over-crowed boardroom with conflicting ideas and intentions for the company, Steve Brannan made the important point that the opposite can also be true. “Smart Investors”, those that not only bring financial support but specific experience in the therapy area or trial phase are an important asset during development. Choosing only one deep pocketed investor may be detrimental to success.
Outlining a clear Exit Strategy is also vital when connecting with investors as some will invest in the hope of a profitable return over a short period of time, others will be comfortable playing the long game and investing in several rounds of funding. Patrick Hillan, Scientific Business Strategist at Sixsense Strategy Group also supported the value of Smart Investors and Accelerators noting that something can be learned from the failures of the Wavefront Innovation Society in Canada. Accelerators and Investors are further developing and specialising in early development stages and therapy areas. For example, TVM, a group of independent investment advisories and fund managers for Venture Capital funds shifted its focus from investing in all stages of development to financing single-asset companies to get drugs up to proof-of-concept in humans. These specialist companies make it more important for start-ups to understand their target market when searching for support.
There are endless variables Biotech’s need to consider throughout their development, however one common theme is the importance of networking and boardroom balance. When I asked Steve Bannon what he thought was the perfect balance would look like he laughed and asked for me to tell him if I ever found out!
Do you have any insight or thoughts about Getting Science into the Clinic? Would understanding these challenges earlier, help you fund your business? Can an appreciation of the Start-Up landscape help you as a candidate tailor your personal L&D and career plan?
I would like to thank Thomas De Vlaam, Patrick Hillan and Steve Brannan for their invaluable insight and time.
By Annelie Murray
Annelie joined Skills Alliance after completing her BSc in Human Biology. Sitting within the Medical Affairs Team Annelie networks with UK and European based Medical Affairs and Clinical Development professionals from Medical Adviser level to Chief Medical Officer. Having taking a particular interest in the Start-Up and Biotech environment she actively connects with people in this exciting and budding realm of pharmaceuticals.
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