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From Invention to Innovation In Biotechnology:Strategic and Tactical Approaches to Taking Risks In A High-Stakes Sector
1. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
1
Elise Brownell, PhD
Founding Partner, ZephyrBiotech, LLC
www.zephyrbiotech.com
elise.brownell@zephyrbiotech.com
925-639-0444
From Invention to Innovation In Biotechnology:
Strategic and Tactical Approaches to
Taking Risks In A High-Stakes Sector
2. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
2
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
3. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
10-12 Years
4. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
4
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
10-12 Years
Cost?
5. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
5
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
10-12 Years
Cost?
$1 billion (Adams and Branter, 2010)
6. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
10-12 Years
Cost?
$1 billion (Adams and Branter, 2010)
Best Odds of Seeing a Clinical Project go to Market?
7. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
10-12 Years
Cost?
$1 billion (Adams and Branter, 2010)
Best Odds of Seeing a Clinical Project go to Market?
1 in 10
8. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
10-12 Years
Cost?
$1 billion (Adams and Branter, 2010)
Best Odds of Seeing a Clinical Project go to Market?
1 in 10
Sunk (Operational) Cost to get to the Clinic?
9. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Why Is the Life Science Sector Different?
Factoids
Life Cycle from Discovery to Market?
10-12 Years
Cost?
$1 billion (Adams and Branter, 2010)
Best Odds of Seeing a Clinical Project go to Market?
1 in 10
Sunk (Operational) Cost to get to the Clinic?
$3-5 M
10. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Entrepreneurship = Invention + Innovation
Invent:
To think up; devise
Innovate:
To make changes in the way things are done; to
introduce new methods, processes, devices.
11. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Invent:
To think up; devise
Innovate:
To make changes in the way things are done; to
introduce new methods, processes, devices.
BRINGING IDEAS TO LIFE
Entrepreneurship = Invention + Innovation
12. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Allocation of VC Investment $ By Sector
2009
Software
18%
CleanTech
11%
Internet
17%
MedDev
15%
Biotech
21%
Healthcare
Services
1%
Other
17%
Percent Venture Investment Dollars, 2009
13. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Regional Allocation of VC Life Science
Investment $, 2009
BayArea
29%
Boston
16%
San Diego
10%
NY
7%
All Others
38%
14. ZephyrBiotech LLC
Elise Brownell, PhD.
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Regional Distribution of Deal Volume
2010, YTD
16 Nov 2010
NE
21%
NW
4%
CAL
34%
MidAtl
21%
Other
20%
15. ZephyrBiotech LLC
Elise Brownell, PhD.
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Life Science Subsector Distribution of Angel/VC Investment
YTD through 11/5/2010
16 Nov 2010
16. ZephyrBiotech LLC
Elise Brownell, PhD.
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Regional Distribution of Deal Volume
2010, YTD
16 Nov 2010
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Tx Dev/Del Dx/PM Tech Plat
Other
MidAtl
CAL
NW
NE
17. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Regional Allocation of 2009-10 Qualifying
Therapeutic Discovery Grant Funds
California
29%
NE
15%
Mid Atlantic
21%
NW
4%
All Others
31%
RegionalAllocation of 2010 Qualifying Therapeutic Discovery Grant
Funding
18. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Current Trends in Investment Climate
• Re-emergence of R and D Limited Partnerships
• Shift to major pharma for financing and development
support
20. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Current Trends in Investment Climate
• Re-emergence of R and D Limited Partnerships
• Shift to major pharma for financing and development
support
• Corporate and strategic partnering at earlier stages
• Re-defining “product” to include IP and Clinical Proof
of Concept Validation
– Re-sets the value inflection point
21. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Average Investment (M USD) By Stage
(Through 10/8/10)
0.00
5.00
10.00
15.00
20.00
25.00
Disc/Res PC Tox Clin Sub/Launch
AverageInvestment,MUSD
Stage of Development
22. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Average Investment (M USD) By Stage
(Through 10/8/10)
0.00
5.00
10.00
15.00
20.00
25.00
Disc/Res PC Tox Clin Sub/Launch
AverageInvestment,MUSD
Stage of Development
Invention Innovation
23. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Current Trends in Investment Climate
• Re-emergence of R and D Limited Partnerships
• Shift to major pharma for financing and development
support
• Corporate and strategic partnering at earlier stages
• Re-defining “product” to include IP and Clinical Proof
of Concept Validation
Need for taking risks, building value, and creating
organizational coherence at ever earlier stages
24. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Attributes of Agile, Entrepreneurial Life
Science Companies
Traditional,
Legacy-based
Entrepreneurial
Decision Making Reductive Holistic and Matrixed
Operational
Focus
Work breakdown
structure
Flow, value-creation
Regulation Focus Metrics-regulated Self-regulated
Planning Style Anticipatory, prescriptive,
directive
Hypothesis creation
Process Style Optimizing; efficiency
oriented
Adaptive; series of
fitness tests
25. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Creating Value: The Differentiated PTP
• Living statement of unique value proposition
– Invites cross-functional conversation
– Oriented to Doing the Right Thing
– Holistic
– Contextual: Competitive environment and effective
knowledge management practices
• Sets minimum requirements
– The null hypothesis
– Alignment re: stop criteria (early elimination)
• Builds resilience and coherence
– Stable reference point for problem solving , recovering
from organizational arrhythmia
– Promotes smoother stage transitions
26. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Creating Value: Building a Decision-Based
Organization
• Decisions as value-building products: risk reduction
• Engages entire organization
• Embeds CONTEXT and MEANING to actions
• Shifts organization to self-regulating rather than only
metrics-regulating
• Creates transparency and accountability
• Ensures resource-relevant triggers are pulled at right
time, to fit stage of project
27. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Decision-Based Timeline:
Asking the Right Question at the Right Time
Who are
partner(s)
for
production?
PRODUCTION
How much
material will
we need?
TOXICOLOGY
Which CROs
do we
interview?
CLINIC
Which
CROs do
we hire?
28. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Allocation of Costs Across Functional Areas
Through Phase 2 Clinical Development
53%
23%
24%
CMC/Mfg
Preclinical
Clinical
29. 16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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Creating Value: Knowledge ManagementX
Ignorance
• Imperative to introduce time and venue for
distilling information into knowledge and
wisdom
– Reduces unnecessary duplication
– Allows trends, new insights to emerge
– Essential in driving decision making
– Supports organizational memory in a climate of
turnover
30. Creating Value: Eliminate Fear-Based
Behaviors and Practices
• Assume success
– Reduces redundancy and distraction
– Requires anticipatory spending prior to results
– Requires best-practices problem solving
– Requires a change of language from “We won’t
be able to do that” to “What’s keeping us from
doing that?”
• Make communications transparent
– Both internally and externally
– Builds credibility
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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31. Summary
• Meeting timelines Growing value
• Early integration of invention and innovation
as a business model imperative
• Key tools:
– Differentiated PTP
– Creation of a Decision-based culture
– Incorporating Effective Knowledge Management
Practices
– Eliminate Fear-based Cultures
• Tapping alternative sources of funding
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
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