FABS – The 2017 Life Sciences Panorama

The 2017 Life Sciences Panorama

The 5th New England Life Sciences Panorama took place on March, 2017 in Cambridge. Over 140 research and business professionals gathered to learn about trends in innovation and funding and new healthcare business models. This annual Boston area event covers the fast-changing developments in Life Sciences with high level interactive sessions, and has become well known among local companies, researchers, scientists and business leaders on both sides of the Atlantic.

In 2017, the Panorama focused on New Trends in Start-ups and Innovation fundings as well as New Generation Healthcare Business Models & the Life Science Industry.

KEY TAKEAWAYS FROM THE FABS

Monique Yoakim-Turk, Ph.D, Technology Transfer, Partner of the Boston Children’s Hospital Technology Development Fund

There is a change in the entrepreneur model:  10 years ago, entrepreneurs were able to find interesting ideas and raise funds to start companies.  Now , VCs are on the looks out for interesting technologies, form  management teams with their entrepreneurs-in-residence and bypass independent entrepreneurs.
– The good news is that are now different/new funding sources such as angel groups, foundations, family offices and some VCs such as Morningside.
– Pharma is also relying more on academia.  The large Merck- Harvard deal was mentioned.  The technology was identified very early on by Merck, and Harvard was willing to incubate and invest in for several years before Merck took it on.

Laure Berliner, PharmD., MBA , Marketing, FABS Co-Chair

Jeff Elton explained how the prefect storm of the new economic reality, the move toward a “pay for outcome” model and the digital revolution are changing the meaning of health care.
Today, developers still rely on value proposition focused on clinical attributes of products vs. competitors and prescribers. Tomorrow, the value proposition will focus on delivering outcomes-based heath and therapy management services enabled through connected devices, services, social engagement driven by government, payers and health systems willingness to contain cost.
What is going to change for developers: market positioning including patients outcomes and value to the overall healthcare system, differentiating capabilities and partnerships development across their field.
  His book, Healthcare Disrupted is worth reading.

Gigi Shafai, PharmD., Medical Affairs Strategy and Business Development, FABS Co-Chair

– France’s biotech sector is vibrant: #1 in EU for newly founded businesses, EU’s 3rd largest biotech industry at $4B USD revenues, 7 innovation clusters, academic institutions drive biotech.
– VC model has changed drastically- VCs go straight to academic institutions nowadays to develop their own companies and and rarely invest outside their network. They need to produce ROI and definitely want to see external validation (e.g. by patient advocacy groups). VCs are helpful advisors and mentors for young companies.
– Family offices, foundations, and grants are where young companies should seek funding.More and more, patients and parents of patients advocate and speak up to support approvals. Patients are decision makers.
– Economic benefits must be communicated early on. Must prove it is a need to have, not a nice to have product. There is always approval risk, but after that there is also commercial risk. At concept stage, it is important to think of the FDA, patient, and payer needs.
– Build a company, don’t build an exit.
– We are shifting to a new economic reality and this is coupled with a digital revolution where data is everywhere and can be quantified.
– Panelists describe some hot areas for innovation as: artificial intelligence, immuno-oncology, the human microbiome, wearables, e-health and digital communication, translational medicine research.

Charles Henry Dion, Senior Trade Adviser in Biotechnology & Pharmaceutical Industries at Business France

VC model and role has dramatically changed: they now are fueling innovation with their own concept by building from scratch company with series A sizes increased (10 vs >$50 million today). That allow them to lunch companies quicker on the market and to secure their exit. This is the example of Flagship, Atlas, Polaris among others. However it has not been as successful as expected and it looks that the model is still technology driven rather than commercialization driven. Another drawbacks is the concentration of the capital around fewer companies. We also assist to a disconnection between the drug development and the investor timeline (10 vs 5 years).
 For entrepreneurs looking for to raise funds:
– Think about alternative to VC: family offices (get to know them, spend a lot of time with them can definitely worth it), corporate fund (that won’t be as dilutive as VC money), patient associations and foundations (will play a PR role in your fundraising and act as a credibility factor for future investors)
– Dilution: work on the deal structure to keep your initial shareholders happy
-Don’t forget to push enough your project down the road and value chain : who is going to pay for it? Are you sure the market opportunity will remain when you will be done with the development ?
– If you are rational, delay as much as you can an IPO. It will save you strong constraints, give you more control in the company. Of course for strategic reasons (investor exist, cash needed), it might remain necessary to do it.Institutions and academics are now bringing competition to the existent entrepreneurs: there is a stronger connection between industrial and VC finding directly projects inside these entities, decreasing the possibility for companies already on the market to raise. The collaboration between Merck and Harvard with Tech Megatransfer ($20 million deal in 2016) is a great example.