After more than a decade in the doldrums, life science startups are back in vogue. What’s new and what has stayed the same in the path to commercialization for these early stage companies? Yesterday, I attended an event at MaRS, a panel discussion on the Road to Commercialization in the life sciences.
I cut my business teeth in the biotech boom of the mid ’90s – there’s plenty that’s changed, but certain concepts have prevailed. Based entirely on my recollections of the sector twenty years ago, which may be a little hazy or lop-sided, because that’s the way human recollections are, here is what I see as evolved and entrenched between the life science commercialization of 2015 compared to 1998.
What’s different – the ‘hot’ topics¹. Currently epigenetics, obesity, big data approaches to solving problems. In the past, we’ve been through therapeutic antibodies, vaccines, gene therapy, pharmacogenomics, nanotechnology.
What’s the same – discussion about scarce resources, with generalizations that there is insufficient capital for investment in early stage companies. This may be especially true of the valley of death, the gap in interested investors to support companies between startup and IPO or between in vitro proof of concept/target and first clinical evidence of efficacy.
Different – the level of sophistication of investors in the life sciences. Although only a fraction of the total investor pool have the risk tolerance for investment in the sector, those that do are guided by due diligence from people with advanced biomedical degrees and strong connections into the healthcare industry. This wasn’t the case years ago.
The Same – investors say there is plenty of available capital for good quality companies.
Different – consumption of healthcare. I can’t possible do this topic justice here, but how decisions are made about what products are used to treat patients has changed. In Canadian, cost cutting and group buying patterns pervade, in the US ObamaCare has been introduced. Globally, there are new markets.
The Same – debate about the need to support an independent Canadian life sciences sector and associated laments about buyout of Canadian companies by US or multinational firms. This ongoing debate usually raises discussion about a globally competitive market for healthcare products.
Different – the level of government involvement and support. The reason I ventured out from my comfy academic environment into the world of business in the mid ’90s was that public support for research was shrinking, shrinking like a popped ballon, and I believed the future for medical innovation was in the public domain. Today, there are many accessible government programs for early stage companies. Technology transfer from academic institutions reached a zenith and has been replaced with a multitude of programs to support the creation of startup companies in the past couple of years. There were few familiar faces at the event, whereas if I attended in the 90’s, I would have known or recognized at least half the crowd.
I’ve been busy over the past decade supporting commercialization of technology and startups in communication, software, hardware and manufacturing sectors. It’s a pleasant surprise to see the life science startup system has become more sophisticated. That’s a good change – more knowledge, new people, more nurturing support. The things that have stayed the same, and are the same in any sector: good companies, those likely to attract investment, are those with valuable solutions for an identified market, with sound management and business planning.
¹All medical needs are always of interest but certain technological solutions and disease states garner more attention at any given time.