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Dispatches from Silicon Valley ... "Novel Product Development Strategies" ... Panel Discussion: Larta 15th Annual Life Science Forum
Colleagues,
To control and de-risk high product development costs, companies across the life science sector are experimenting with new & novel approaches. Large life science companies are experimenting with "virtual" autonomous innovation units, and are banding together in "Triple Helix" (academic, industry, government) consortiums. Small companies are turning increasingly to virtual/lean models to speed product development, while improving the efficient use of limited capital by outsourcing non-core functions.
This Larta Institute panel was moderated by Joanna Shulman, Thallo Biosciences and included Donald Frail, Vice President, Pfizer Global Research and Development, Roger Stern, Stellartech Research Corporation, and Ed Schnipper, ProjeX Therapeutics.
The panel agreed that the current venture capital model is 'broken". Series A (initial venture investments) are typically too big, averaging $5 to $7 million, to be relevant for the funding of many innovative medical start-ups, particularly those emerging from academia the most likely source of innovation. Virtual companies that "bootstrap" early development and use capital efficiently are moving into favor. Pfizer is exploring an "accelerator" type model in which they provide "commodity" common services, i.e., like skilled business management, finance, marketing, ect., to multiple start-ups simultaneously. They are also building an increasing number of academic partnerships, focusing on "Proof of Concepts", working with patient advocacy groups, and working with overseas partners.
Other innovations the panelists mentioned include bartering for overseas capital by trading country licensing rights for money, mainly from Asia and the Middle East, and trading equity for clinical research organization (CRO) clinical trial services. Panelists emphasized that early stage money is the most expensive. They advised that start-ups carefully acquire experienced business advisors/partners from the outset, and leverage non-dilutive capital (government funding), common/shared infrastructure, stick to their core value creation model, and to outsource everything else.
All panelists cited the need for start-up companies to articulate specific payback/exit strategies for their investors; to be specific about candidate companies that may acquire their business or license their intellectual property; and to build business strategies that achieve early sales. They should also meet with venture capitalists and strategic corporate investors as early in the developmental process as possible to clearly understand their needs and priorities.
ENJOY!
CC
To control and de-risk high product development costs, companies across the life science sector are experimenting with new & novel approaches. Large life science companies are experimenting with "virtual" autonomous innovation units, and are banding together in "Triple Helix" (academic, industry, government) consortiums. Small companies are turning increasingly to virtual/lean models to speed product development, while improving the efficient use of limited capital by outsourcing non-core functions.
This Larta Institute panel was moderated by Joanna Shulman, Thallo Biosciences and included Donald Frail, Vice President, Pfizer Global Research and Development, Roger Stern, Stellartech Research Corporation, and Ed Schnipper, ProjeX Therapeutics.
The panel agreed that the current venture capital model is 'broken". Series A (initial venture investments) are typically too big, averaging $5 to $7 million, to be relevant for the funding of many innovative medical start-ups, particularly those emerging from academia the most likely source of innovation. Virtual companies that "bootstrap" early development and use capital efficiently are moving into favor. Pfizer is exploring an "accelerator" type model in which they provide "commodity" common services, i.e., like skilled business management, finance, marketing, ect., to multiple start-ups simultaneously. They are also building an increasing number of academic partnerships, focusing on "Proof of Concepts", working with patient advocacy groups, and working with overseas partners.
Other innovations the panelists mentioned include bartering for overseas capital by trading country licensing rights for money, mainly from Asia and the Middle East, and trading equity for clinical research organization (CRO) clinical trial services. Panelists emphasized that early stage money is the most expensive. They advised that start-ups carefully acquire experienced business advisors/partners from the outset, and leverage non-dilutive capital (government funding), common/shared infrastructure, stick to their core value creation model, and to outsource everything else.
All panelists cited the need for start-up companies to articulate specific payback/exit strategies for their investors; to be specific about candidate companies that may acquire their business or license their intellectual property; and to build business strategies that achieve early sales. They should also meet with venture capitalists and strategic corporate investors as early in the developmental process as possible to clearly understand their needs and priorities.
ENJOY!
CC
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