THE STARTING LINE
Many seeds of biotech innovation lie in academic basic science supported by government-funded institutions. Whereas investors and corporations cannot afford to do basic research find the rare commercially useful concept amidst thousands of discoveries, academic institutions gladly pursue science to further human knowledge. Academic institutions cannot subsidize the high cost of product development, whereas investors and companies are more than willing to do so in pursuit of profits. Therefore, it makes sense to transfer a technology from a university to a company once there is enough scientific data to support a development plan.
Finding the right time to transfer a project from academia to industry is critical; entrepreneurial scientists and venture capitalists may be tempted to do it too soon. The earlier the transfer, the more of the product's final value the company can retain for itself but the greater the risk that it will fail at the expense of the startup's investors. In particular, with each stage of drug development more expensive than the last, company should identify a drug program's fatal flaws as early and efficiently as possible.
Key Questions
- What evidence is there suggesting that the product will be viable (e.g. preclinical or clinical data)?
- What will be required in terms of time, resources, and strategy to develop the product(s)?
- How will development be staged so as to minimize costly mistakes as early as possible?