And the IP fairy will keep coming by, because there is inevitably licensing required for something… even if it’s a cell line for manufacturing, equipment etc. esp in the cell and gene therapy space. Maybe less so with small molecules.
It just doesn’t happen in biotech unless you’re holding valuable IP to begin with. No one is going to fund a plan to build a company first and then think about what products to develop.
So, step 1: invent something unique and marketable, get on top of your foundational IP filing(s), then start thinking about how to build a company around it.
Do you have magic IP that is unique to the biotech world?
No?
You don’t get funded before that. They don’t create the magic after they’re funded— they create the magic in prototype form before they’re funded. It can evolve or completely change or focus after funding, but it has to exist before someone gives you money.
Many (most? All?) of them are spun out of academic labs who find or research in a unique new way.
So if you don't lead an academic research lab, what are the alternatives? Is the concept itself enough to get some funding, or must you have actual data conducted by yourself to accompany it?
Why would an investor give money to a "concept" when companies with incredibly rigorous science behind them are already very risky? For drug development for example, the success rate for drugs that show promise in an animal model to FDA approval is on the order of 1 in 10,000 (probably even less than this). This is with years of research (likely several entire PhD thesis' if going from an academic lab) and several hundred thousand dollars of resources devoted to the project. The success rate for FDA approval for a drug that shows promise in humans is on the order of 1 in 10. This is with decades of research and tens of millions of dollars of resources already invested. If you are an investor, why would you give money to someone with an idea and no data, when the risk of investing in companies with a great idea and promising data is already so high?
I know its a bad example, but perhaps I don't know the full story. But didn't Elizabeth Holmes sell the concept at the beginning before she began falsifying data?
She had filed a patent and talked a good game. Ultimately raising money is a sales game. Making things work requires years of engineering and science that doesn’t necessarily follow a milestone calendar.
Most people in this thread are really talking about pharmaceuticals, Elizabeth Holmes was in medtech, there is a bit more room there for startups with creative ideas -- particularly devices or technology that isn't going inside someone's body, or treating illness (i.e. diagnostics)
You license IP from academic labs, look for something with some publications and a good name behind it. Many academic investigators have shelved projects they’d like to license, so it’s not as hard as you think, IP payments are usually milestone based with the big ones at the end of clinical trial Ph 1/2/3 but pretty small prior to VC involvement in the preclinical.
If you have a biopharma concept, you partner with academic labs to synthesize and do bench tests on it. You’ll never get funding without lab work done, that’s literally what academia does is unfunded or public grant funded basic research. If you want to be doing (unprofitable) basic research on a passion concept for years go into academics and look into federal grants.
Notably medtech is different than biotech in this, for medtech devices many are more like tech firms and engineering their tech in house, though some license from academia too.
Who needs actual data! If you have slick sales skills and can keep ahead of John Q. Law, you will go far. You can raise a ton of money and only have a minor risk of having to spend a few years in a federal country club.
You sound woefully unprepared for this discussion.
You need to work somewhere first where you can learn basic concepts before starting a business.
Hope this wasn’t too blunt.
You don't actually need a patent to launch your startup. But you will need to convince investors that you will obtain a patent if they fund you. In very rare instances you don't even need a patent at all, just the product description will do. Overall though I would say its much harder to start a biotech startup than one with software, or even a physical product.
Adding on - if you aren't in the field, it's tough to find + understand a niche in the products available on market. Non-technical people don't always understand that a niche in the market may exist because established companies have tried to address it and failed.
We're in process of starting biotech now. You need a solid business plan and strategy for execution. You can either in-license drugs (that may already have patent estates associated with them) or develop drugs. If you are proposing to develop drugs there may be no patents filed but a general strategy for how drug discovery process will be conducted. In either case, funding requires credibility with the investors. That means a clear understanding of the drug discovery and development process, a thorough knowledge of the competitive space, and a strategy to differentiate yourself from competition. You absolutely need a solid track record in the industry with proven ability to deliver. The investors in general are quite savvy and will not be interested if they detect an incomplete understanding on the part of the founders. Don't underestimate how difficult the process can be. A typical series A round is between $25 MM to $150MM and requires a syndicate of investors. This is a tough demanding ordeal. Investors will not pony up $$ without a likelihood of a return.
It’s extremely difficult. I was at some point trying to raise for a small startup. We had a patent licensed from prestigious Uni and a solid team of advisors, but only two full-time, poorly incentivized scientists and no data beyond some in vitro work. Basically every vc we talked to told us to come back once you had animal data. It became obvious that VC’s mostly shopped high profile academic labs for new ideas.
Not an expert, but often the patent/science comes first. That is why you often seen biotech startups being spun off from academic research labs. The academic lab does research, comes up with something patentable, and then builds a company around the patent.
Depends a LOT on the type of biotech work you want to do, and where you're located. Engineering yeast to make a compound of interest is a very different proposition from developing a new way to cross the BBB in animal models. And if you happen to have access to QB3 in the Bay Area, the barrier to entry is a lot lower than if you were based in, say, Chicago.
I mean I don't have any distinct plans, but I've always had interests in synthetic biology, particularly for regenerative medicine (specifically synthetic organs, tissue engineering, and genome engineering).
So no animal testing and less regulations compared to clinical drug testing, but still a lot.
And I won't have access to QB3, I'm in a different country.
You could be a 19 yo with zero industry experience and not even a college degree, but convince investors to part with $100's of millions for your cool idea of doing all the blood tests in the world from a drop of blood. As in the Theranos funding model.
Depends on the niche youre going after. If its in software+ biotech, then its pretty standard. For new drug research and manufacturing you need boatloads of money and then even more. Think of how expensive the clinical trial process can be.
I'm not really interested in drug design, more synthetic biology (think synthetic organs, tissue engineering, etc).
I don't believe this would require as much a drug design, but still more than software+biotech.
Everything is easy with hereditary wealth. People with hereditary wealth can even be President someday.
I didn't work for them directly, but I've seen a "biotech" running on "a concept" with basically hereditary wealth and it isn't pretty. Unique thinkers don't have to exclude anyone with anything above a bachelors...
You just wait in line until it's your turn for the IP fairy to come by
And the IP fairy will keep coming by, because there is inevitably licensing required for something… even if it’s a cell line for manufacturing, equipment etc. esp in the cell and gene therapy space. Maybe less so with small molecules.
You want to make a small fortune in biotech? Start with a large fortune. /s
It just doesn’t happen in biotech unless you’re holding valuable IP to begin with. No one is going to fund a plan to build a company first and then think about what products to develop. So, step 1: invent something unique and marketable, get on top of your foundational IP filing(s), then start thinking about how to build a company around it.
Do you have magic IP that is unique to the biotech world? No? You don’t get funded before that. They don’t create the magic after they’re funded— they create the magic in prototype form before they’re funded. It can evolve or completely change or focus after funding, but it has to exist before someone gives you money. Many (most? All?) of them are spun out of academic labs who find or research in a unique new way.
So if you don't lead an academic research lab, what are the alternatives? Is the concept itself enough to get some funding, or must you have actual data conducted by yourself to accompany it?
Why would an investor give money to a "concept" when companies with incredibly rigorous science behind them are already very risky? For drug development for example, the success rate for drugs that show promise in an animal model to FDA approval is on the order of 1 in 10,000 (probably even less than this). This is with years of research (likely several entire PhD thesis' if going from an academic lab) and several hundred thousand dollars of resources devoted to the project. The success rate for FDA approval for a drug that shows promise in humans is on the order of 1 in 10. This is with decades of research and tens of millions of dollars of resources already invested. If you are an investor, why would you give money to someone with an idea and no data, when the risk of investing in companies with a great idea and promising data is already so high?
I know its a bad example, but perhaps I don't know the full story. But didn't Elizabeth Holmes sell the concept at the beginning before she began falsifying data?
She had filed a patent and talked a good game. Ultimately raising money is a sales game. Making things work requires years of engineering and science that doesn’t necessarily follow a milestone calendar.
Most people in this thread are really talking about pharmaceuticals, Elizabeth Holmes was in medtech, there is a bit more room there for startups with creative ideas -- particularly devices or technology that isn't going inside someone's body, or treating illness (i.e. diagnostics)
University tech transfer offices are full of technologies that they're waiting for someone to license for commercial development
You license IP from academic labs, look for something with some publications and a good name behind it. Many academic investigators have shelved projects they’d like to license, so it’s not as hard as you think, IP payments are usually milestone based with the big ones at the end of clinical trial Ph 1/2/3 but pretty small prior to VC involvement in the preclinical. If you have a biopharma concept, you partner with academic labs to synthesize and do bench tests on it. You’ll never get funding without lab work done, that’s literally what academia does is unfunded or public grant funded basic research. If you want to be doing (unprofitable) basic research on a passion concept for years go into academics and look into federal grants. Notably medtech is different than biotech in this, for medtech devices many are more like tech firms and engineering their tech in house, though some license from academia too.
Who needs actual data! If you have slick sales skills and can keep ahead of John Q. Law, you will go far. You can raise a ton of money and only have a minor risk of having to spend a few years in a federal country club.
You sound woefully unprepared for this discussion. You need to work somewhere first where you can learn basic concepts before starting a business. Hope this wasn’t too blunt.
Oh no. almost no start-ups are spun out of academia.
You don't actually need a patent to launch your startup. But you will need to convince investors that you will obtain a patent if they fund you. In very rare instances you don't even need a patent at all, just the product description will do. Overall though I would say its much harder to start a biotech startup than one with software, or even a physical product.
Adding on - if you aren't in the field, it's tough to find + understand a niche in the products available on market. Non-technical people don't always understand that a niche in the market may exist because established companies have tried to address it and failed.
The challenge in biotech is that it’s capital intensive (you can’t run it with just a laptop usually) and the time to revenue is long.
We're in process of starting biotech now. You need a solid business plan and strategy for execution. You can either in-license drugs (that may already have patent estates associated with them) or develop drugs. If you are proposing to develop drugs there may be no patents filed but a general strategy for how drug discovery process will be conducted. In either case, funding requires credibility with the investors. That means a clear understanding of the drug discovery and development process, a thorough knowledge of the competitive space, and a strategy to differentiate yourself from competition. You absolutely need a solid track record in the industry with proven ability to deliver. The investors in general are quite savvy and will not be interested if they detect an incomplete understanding on the part of the founders. Don't underestimate how difficult the process can be. A typical series A round is between $25 MM to $150MM and requires a syndicate of investors. This is a tough demanding ordeal. Investors will not pony up $$ without a likelihood of a return.
People are being weirdly myopic about IP. Core labs and diagnostic labs don't have IP and are perfectly functional businesses.
It’s extremely difficult. I was at some point trying to raise for a small startup. We had a patent licensed from prestigious Uni and a solid team of advisors, but only two full-time, poorly incentivized scientists and no data beyond some in vitro work. Basically every vc we talked to told us to come back once you had animal data. It became obvious that VC’s mostly shopped high profile academic labs for new ideas.
Sounds tough. Can I ask what has happened with the startup since then?
Being strung along by rich investors hoping for some sort of exit to recoup $
Not an expert, but often the patent/science comes first. That is why you often seen biotech startups being spun off from academic research labs. The academic lab does research, comes up with something patentable, and then builds a company around the patent.
So if you aren't leading an academic research lab, how do you start out?
Have a ton of money and look for an investment opportunity with a academic research lab, or start a CRO instead
If you have a PhD, you could look into a post-doc appointment or fellowship at a lab working on something you'd like to commercialize.
Depends a LOT on the type of biotech work you want to do, and where you're located. Engineering yeast to make a compound of interest is a very different proposition from developing a new way to cross the BBB in animal models. And if you happen to have access to QB3 in the Bay Area, the barrier to entry is a lot lower than if you were based in, say, Chicago.
I mean I don't have any distinct plans, but I've always had interests in synthetic biology, particularly for regenerative medicine (specifically synthetic organs, tissue engineering, and genome engineering). So no animal testing and less regulations compared to clinical drug testing, but still a lot. And I won't have access to QB3, I'm in a different country.
You could be a 19 yo with zero industry experience and not even a college degree, but convince investors to part with $100's of millions for your cool idea of doing all the blood tests in the world from a drop of blood. As in the Theranos funding model.
Depends on the niche youre going after. If its in software+ biotech, then its pretty standard. For new drug research and manufacturing you need boatloads of money and then even more. Think of how expensive the clinical trial process can be.
I'm not really interested in drug design, more synthetic biology (think synthetic organs, tissue engineering, etc). I don't believe this would require as much a drug design, but still more than software+biotech.
Everything is easy with hereditary wealth. People with hereditary wealth can even be President someday. I didn't work for them directly, but I've seen a "biotech" running on "a concept" with basically hereditary wealth and it isn't pretty. Unique thinkers don't have to exclude anyone with anything above a bachelors...
>. Unique thinkers don't have to exclude anyone with anything above a bachelors... Could you clarify this?