Igor Goryanin biomedical technologies at Skolkovo

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Igor Goryanin biomedical technologies at Skolkovo

  1. 1. Biomedical Technologies at Skolkovo<br />Skolkovo<br />Prof Igor Goryanin, Head of Biomedical Cluster, Skolkovo<br />February 1, 2011<br />With help Skolkovo colleagues and McKinsey & Company<br />
  2. 2. First steps, <br />first achievements<br />http://www.i-gorod.com/<br />From Presentation in Davos, January 25th, 2011<br />
  3. 3. Town-planning concepts for Skolkovo Innovation Centre development (ОМА, AREP)<br />OMA<br />AREP<br />Social <br />Culture<br />University<br />Industry<br />Commercial<br />Residential<br />Park & Ride<br />
  4. 4. The MISSION of Skolkovo<br />Skolkovo is to become an innovation hub that will stimulate innovative entrepreneurship and disseminate entrepreneurial culture across the country to integrate Russia into the global economy:<br />Fostering advancement of human capital in Russia by attracting foreign specialists and creating conditions for local innovative talent development <br />Creating globally competitive products and services based on cutting-edge research<br />Establishing global innovative companies in Russia<br />
  5. 5. Governance structure<br />The government provides initial funding and signals credible commitment to support the project in the future<br />The project is managed by a non-government foundation with an independent Board, regulated by a special law<br />The Foundation is a doorkeeper, while all Skolkovo units (such as the Clusters) and residents are independent organizations<br />Much of the real estate in Skolkovo will be built by private developers<br />
  6. 6. Map of key partners (2010 – January 2011)<br />
  7. 7. Skolkovo Foundation track record (March 2010 – January 2011)<br />
  8. 8. Global network for knowledge management<br />
  9. 9. Creating in SKOLKOVO<br />
  10. 10. Joint risk management in innovative cycle<br />
  11. 11. Initial ideas<br />Biomedicine: to focus in development , implementation and commercialization, long-term technology transfer in “P-4 Medicine” (Personalized, Participatory, Predictive and Preventive).<br />Biopharmaceuticals: to establish Russian independence in the pharmaceutical sector from drug discovery to manufacturing (by 2015 many drug patents will expire, further weakening the financial foundation of the industry)<br />Biomedical Informatics: to establish Russian independence in health informatics sector by establishing infrastructure, developing novel computational technologies, knowledge management, rational planning of biological and clinical experiments. <br />Industrial Biotechnology and Bioenergetics: to develop alternative approaches in the bioenergy, and bioremediation sectors, to develop waste, and industrial by-products utilization technologies combined with energy production in multiple forms<br />10<br />
  12. 12. 11<br />Bio-Informatics<br /><ul><li>Consistently scores relatively high on feasibility, driven by the strong talent pool in math and hard sciences skills in Russia
  13. 13. Relatively low infrastructure and equipment costs (e.g., versus drug production) and high interest from international partners to collaborate with local scientists also supports higher feasibility and opportunity
  14. 14. Can be an enabler of other areas as an early “proof of concept” for Skolkovo biotech cluster
  15. 15. DNA sequencing
  16. 16. Pathway modeling
  17. 17. Virtual screening</li></ul>Main themes identified<br />Themes<br />Example priority area (foresight) <br />Rationale <br />Bio-Healthcare/<br />Bio-Pharmaceuticals<br /><ul><li>Generally lower on feasibility due to complex nature of end-to-end biologics development, scarcity of experienced local talent and the very high costs
  18. 18. Highly attractive driven by large existing domestic market of ~$1.5B, nearly 100% financed by Russian government healthcare budget spend and nearly all on imported drugs
  19. 19. Some areas (e.g. bio-similars) may have lower entry barriers and at the same time span across topics, ensuring broader impact
  20. 20. Monoclonal antibodies
  21. 21. Novel treatment modalities
  22. 22. Products for stroke prevention/treatment
  23. 23. Bio-similars
  24. 24. Companion diagnostics
  25. 25. National incubators</li></ul>Bio-Industrials1<br /><ul><li>Fast growing genetically modified products for livestock
  26. 26. Biopesticides (i.e. biological defence of plants)
  27. 27. Has select attractive and feasible strategic directions driven by moderate market size, challenging but feasible production, and pockets of good existing infrastructure</li></ul>Bio-Energy<br /><ul><li>Low domestic market potential due to high supply and dominance of fossil fuels in the economy
  28. 28. No government subsidies versus international markets
  29. 29. May become both feasible and highly attractive if government was to prioritise the area
  30. 30. Genetic modification of biomass, e.g. development of species relevant for a particular climate</li></ul>1 May be partially outside the current mandate<br />SOURCE: Expert interviews; Team analysis<br />
  31. 31. 12<br />e<br />20<br />9<br />14<br />39<br />6<br />25<br />14<br />8<br />Biomedicine cluster – Russian and global market summary<br />ROUGH ESTIMATES<br />Bio-healthcare/<br />Bio-pharma<br />Bio-informatics<br />Bio-industrials<br />Bio-energy<br />Russian market size<br />Global market size<br />CAGR<br />Percent<br />CAGR<br />Percent<br />USD billions<br />USD billions<br />720<br />12-16<br />0-2<br />160<br />8% p.a.<br />14% p.a.<br />510<br />4-6<br />105<br />270<br />6-8<br />320<br />0.5-1.5<br />0-1<br />200<br />65<br />35<br />2-4<br />11<br />150<br />0.1-0.3<br />2-4<br />5-7<br /><1<br />260<br />3<br />194<br />3-5<br />0<br />120<br />1-2<br />2020<br />15<br />2009<br />15<br />2020<br />2009<br />SOURCE: Evaluate; Markets and Research; government reports; press search; team analysis<br />
  32. 32. 13<br />Physical infra-structure<br /><ul><li>Presence of labs and equipment critical to conducting R&D
  33. 33. Demonstrates prior capability</li></ul>20<br />Existing research and academic resources<br />20<br /><ul><li>Demonstrates existing talent present as well as successful precedents
  34. 34. Provides academics to start innovative companies</li></ul>Pipeline of talent<br />30<br /><ul><li>Existence of steady flow of scientists needed to drive R&D, key to producing tangible R&D in the future</li></ul>Potential for government support<br />Legislative<br />Regulatory framework<br />15<br /><ul><li>Protects investors, e.g., existence of strong IP
  35. 35. Motivates new investments, e.g., enforces GMP for local production</li></ul>Biotech spend (e.g. pharmaceuticals)<br />Local production potential(e.g. drug volumes)<br />15<br /><ul><li>Drug volumes to indicate opportunity for high plant utilization
  36. 36. Access to state financed channels</li></ul>Criteria for strategic directions prioritization and priority areas identification – Biomedical<br />Feasibility<br />Attractiveness<br />Criteria<br />Criteria<br />Weight, %<br />Rationale<br />Weight, %<br />Rationale<br />Current market size<br /><ul><li>Indicates both commercial potential as well as priority investment areas for biotech companies, i.e. potential Skolkovo partners</li></ul>Global<br />7<br />Russia<br />13<br />Market growth until 2020<br /><ul><li>Reflects where new R&D money typically flows and potentially more accessible capital raising
  37. 37. Indicates long-term opportunity investment areas</li></ul>Commercial opportunity<br />Global<br />10<br />Russia<br />10<br />Time to commercialize<br /><ul><li>Lower time reduces go-to-market risk and increases NPV</li></ul>5<br /><ul><li>Indicates potential level for State influence and support</li></ul>10<br />10<br />Sources of competitive advantage<br />Disruptive potential (number of patients)<br /><ul><li>Indicates potential unmet need and opportunity for impact</li></ul>20<br />Competitive landscape<br /><ul><li>Determines ease of entry, inv. risks and potential profitability</li></ul>10<br /><ul><li>Leverage full Skolkovo investments, lower costs</li></ul>5<br />Synergy with other Skolkovo initiatives<br />Each potential strategic direction and priority area (foresight) bucket scored on scale of 0 to 41 for each criterion and then summed and ranked for total attractiveness and feasibility. <br />1 McKinsey methodology<br />SOURCE: Team analysis<br />
  38. 38. 14<br />Bio-Informatics<br />Bio-Healthcare/<br />Bio-Pharma<br />Biotech Prioritization Matrix<br />Bio-Industrials<br />Bio-Energy<br />Attractiveness<br />“Higher priority areas”:<br />Expected to have highest proportion of high potential project proposals<br />I<br />III<br />“Long term potential”<br />Highly attractive but requires more capability and infrastructure building<br />Vaccines and anti-infectives<br />Oncology<br />Companion diagnostics<br />Blood<br />Bulk/polymers<br />Endocrine<br />Regenerative<br />medicine<br />Drug<br />development<br />Cardiovascular<br />Nuclear medicine<br />National<br />incubators<br />CNS<br />Food/feed<br />Biosimilars<br />Molecular<br />medicine<br />Musculo-skeletal<br />Ethanol<br />Gene therapy<br />Bioremediation<br />Agriculture<br />“Lower priority areas”<br />Select opportunities possible but expect less overall deal flow in these areas<br />“No regret areas”:<br />Relatively higher probability of success, can be leveraged to support other areas<br />Preventive<br />medicine<br />Marine biotech<br />Plant<br />extracts<br />Oleochemicals<br />Biomass<br />Biodiesel<br />Sensory organs<br />Genito-urinary<br />Feasibility<br />Strategic directions prioritization – Biomedical<br />II<br />IV<br />SOURCE: Team analysis, Expert Interviews<br />
  39. 39. 15<br />Priority areas emerging (1/2)<br /><ul><li>Bio-healthcare/</li></ul>Bio-pharma<br /><ul><li>Oncology
  40. 40. Monoclonal antibodies (e.g., in breast cancer and leukemia)
  41. 41. Novel treatment modalities (e.g., personalized treatments)</li></ul>I<br /><ul><li>Vaccines and select anti-infectives
  42. 42. Vaccines (e.g., TB, flu, new pediatric, conjugated)
  43. 43. Anti-virals (e.g., anti-HIV)</li></ul>I<br /><ul><li>Cardiovascular
  44. 44. Products for stroke prevention/treatment</li></ul>I<br /><ul><li>CNS
  45. 45. Alzheimer’s disease
  46. 46. Schizophrenia
  47. 47. Depression</li></ul>III<br /><ul><li>Endocrine
  48. 48. Diabetes (e.g., GLP-I agonists)</li></ul>III<br /><ul><li>Nuclear medicine
  49. 49. Nuclear Imaging (e.g., PET)</li></ul>III<br /><ul><li>Blood
  50. 50. R&D partnerships into Blood Factor Co-agulating agents (e.g. long-lasting Factor VIII)</li></ul>III<br /><ul><li>Musculo-skeletal
  51. 51. Rheumatoid arthritis</li></ul>III<br /><ul><li>Bio-similars1
  52. 52. Bio-similars development (e.g., in rheumatoid arthritis)</li></ul>I<br /><ul><li>Reg. medicine1
  53. 53. Regenerative medicine (e.g., stem cells)</li></ul>I<br /><ul><li>Nat. incubators1
  54. 54. Creation of national incubators</li></ul>I<br />Investment direction <br />Subcluster<br />Priority areas<br />Category<br /><ul><li>Companion diagnostics1
  55. 55. Companion diagnostics (e.g., in oncology)</li></ul>I<br />1 Cross-cutting areas<br />SOURCE: Expert interviews; Evaluate; IMS; Scientia Advisors; PWC; press search; team analysis<br />
  56. 56. 16<br />Priority areas emerging (2/2)<br /><ul><li>Bio-informatics
  57. 57. Molecular medicine
  58. 58. DNA sequencing</li></ul>I<br /><ul><li>Pathway modeling
  59. 59. Virtual screening
  60. 60. Drug development</li></ul>I<br /><ul><li>Gene Therapy
  61. 61. Genomics</li></ul>II<br /><ul><li>Preventive medicine
  62. 62. Molecular diagnostics</li></ul>II<br /><ul><li>Bio-industrials
  63. 63. Plant extracts
  64. 64. Industrial starch production</li></ul>II<br /><ul><li>Bioremediation
  65. 65. Oil spills treatment
  66. 66. Ethanol production waste (barda) conversion</li></ul>IV<br /><ul><li>Marine biotech
  67. 67. Exploration of promising compounds derived from marine organisms (e.g red or green alga as anti-cancer compound)
  68. 68. Fish farming (e.g. fish feed)</li></ul>IV<br /><ul><li>Biotech in agriculture
  69. 69. Fast growing genetically modified products for livestock
  70. 70. Biopesticides (i.e. biological defence of plants)</li></ul>IV<br /><ul><li>Biomass
  71. 71. Genetic modification of biomass, e.g. development of species relevant for a particular climate
  72. 72. Bio-energy</li></ul>II<br /><ul><li>Bioethanol
  73. 73. Cellulosic ethanol (e.g. bioethanol from waste)
  74. 74. Microbial synthesis of ethanol</li></ul>IV<br /><ul><li>Biodiesel
  75. 75. Use of microorganisms to convert raw materials (e..g CO2, wood, sugar) into biodiesel
  76. 76. Jet biofuel from camelina</li></ul>IV<br />Investment direction <br />Subcluster<br />Priority areas<br />Category<br /><ul><li>Food/feed ingredients
  77. 77. Lysine production
  78. 78. Citric acid production</li></ul>III<br /><ul><li>Bulk/polymers
  79. 79. Sorbitol technology
  80. 80. Bioplastics (including biodegradable products) based on carbohydrates as starch, cellulose</li></ul>III<br />SOURCE: Expert interviews; Evaluate; IMS; Scientia Advisors; PWC; press search; team analysis<br />
  81. 81. 17<br />Bio-Healthcare Priority areas: Oncology<br />HIGH LEVEL ASSESSMENT<br />High <br />Level 1<br />Direction<br />Description/level 2<br />Rationale<br />Average<br /><ul><li>Oncology
  82. 82. Antineoplastic and immunomodulating agents
  83. 83. Novel treatment moda-lities (e.g., personalized treatments)
  84. 84. Area of high disruptive potential as evidenced by large R&D in the area, with high disruptive potential (e.g., USD 275 mn spent p.a. to catalogue gen. changes just in 20 types of cancer treat.)
  85. 85. Large potential market (USD 250bn in US, growing at 10% p.a.), with high unmet need
  86. 86. Early commercial successes (e.g., Dendreon, initially for prostate cancer)
  87. 87. Indications of Russian state interest and support (e.g., Oncophage registration);also PoC
  88. 88. Monoclonal antibodies (e.g., in breast cancer and leukemia)
  89. 89. Large current market (USD 27bn globally, USD 530mn in Russia), expected to grow rapidly (10% CAGR)
  90. 90. Clear support from the Russian government (e.g., declared interest and state purchases)
  91. 91. "Hot" area in global R&D, with strong "pockets" of capabilities in Russia (e.g., Gabibov’s lab)</li></ul>SOURCE: Expert interviews; Evaluate; IMS; Scientia Advisors; PWC; press search; team analysis<br />
  92. 92. 18<br />Rationale<br /><ul><li>Large current market ($60 mn in Russia), with high growth (25% historical CAGR)
  93. 93. Clearly a priority area for the government
  94. 94. High level under-penetration, e.g., Russian National Calendar only includes ~10 diseases vs. 15-20 in the West
  95. 95. HC2020 Strategy explicitly identifies local Vx production as key state priority
  96. 96. Government consistently increased funding to Vx (e.g., additional USD 10mn given on R&D in 2010)
  97. 97. Historically strong infrastructure/capabilities to build upon (e.g., Vector, Inst. of Sera)
  98. 98. Mid-sized market (USD 22bn globally, but only ~5% market is biotech-based); Russian market is USD 300mn
  99. 99. Anti-virals seen as a priority by the state
  100. 100. E.g., Over 500K HIV cases (another 1mn likely not diagnosed) and growing at 10% p.a.; only ~25% get adeq. treatment
  101. 101. Some R&D capabilities (e.g., Inst. of Virusology)</li></ul>Bio-Healthcare Priority areas: Vaccinesand Select Anti-infectives<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>Vaccines and select anti-infectives
  102. 102. Drugs capable of fighting infectors, both prophylactic and treatment focused
  103. 103. Vaccines (e.g., TB, flu, new pediatric, conjug.)
  104. 104. Anti-virals (e.g., anti-HIV)</li></ul>SOURCE: Expert interviews; Evaluate; IMS; press search; team analysis<br />
  105. 105. 19<br />Rationale<br /><ul><li>Large existing market size (total current Russian market of $190 mn) makes it an interesting area for R&D
  106. 106. Significant unmet need due to low effective-ness of products on the market (estimated market could be 10x larger)
  107. 107. High (and declared) priority for the state due to high case number (400K cases p.a.)
  108. 108. Large market size (USD 35bn globally), with above average growth expected (5% overall, 25% in GLP-1 component) expected
  109. 109. Disease seen as a high priority for Russia
  110. 110. 2.8mn diagnosed diabetics in Russia (~5mn undiagnized and ~6mn pre-diab.)
  111. 111. 2009 drug spend at USD 400mn (incl. USD 100mn biologics); total direct costs estimated at over USD 10bn
  112. 112. R&D and production capabilities (e.g., Sanofi) already exist on the market, yet no Russian producers currently active</li></ul>Bio-Healthcare Priority areas: Cardiovascularand Endocrinology<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>Cardio-vascular
  113. 113. Biotech products targeted at CV/circ. system diseases
  114. 114. Products for stroke prevention/treatment (e.g., hemorrhage/ thrombosis)
  115. 115. Endo-crinology
  116. 116. Products enhancing functio-ning of the endocrine system
  117. 117. Diabetes (e.g., GLP-I agonists1)</li></ul>1 Glucagon-like-peptide-1 – increases insulin secretion, lowers glucagon secretion, increases insulin sensitivity<br />SOURCE: Expert interviews; Evaluate; IMS; MoH; NovoNordisk; press search; team analysis<br />
  118. 118. 20<br />Rationale<br /><ul><li>Significant unmet need due to large patient population (35mn globally, growing at 4% CAGR) and lack of effective treatments (current total1 market size of USD 7bn and USD 20mn in Russia)
  119. 119. Some historical capabilities in CNS exist (e.g., Inst. of Mol Biology, Chernogolovka Inst.)
  120. 120. "Hot" R&D area globally (USD 0.5bn spend p.a. in the US alone and growing), with an opportunity to "create" a large market
  121. 121. Large patient population, both globally and in Russia, affecting 1.5% population
  122. 122. High unmet need due to lack of effective treatments, with USD 0.4bn R&D spend p.a.
  123. 123. Historically present R&D capabilities in Russia (e.g., Inst of Pharmacology)
  124. 124. Mixed perception of disease importance –not a priority for the Russian government
  125. 125. Large and growing patient population, est. at ~15mn in Russia; low diagn./treatment rates
  126. 126. Anti-dep. market at USD 40mn and growing
  127. 127. Current global market of USD 12bn, in 5 yr. expected to decline to 8bn due to LOEs
  128. 128. Mixed perception of disease importance – not a priority for the Russian government</li></ul>Bio-Healthcare Priority areas: CNS<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>CNS
  129. 129. Products related to curing nervous system diseases
  130. 130. Alzheimer’s disease
  131. 131. Schizophrenia
  132. 132. Depression</li></ul>1 Primarily non-biologics<br />SOURCE: Expert interviews; Evaluate; IMS; NIH; press search; team analysis<br />
  133. 133. 21<br />Rationale<br /><ul><li>Large global market (USD 1.3bn), expected to grow at 3% p.a.
  134. 134. Highly competitive market dominated by 3 major established players (e.g., GE, Phillips, Siemens)
  135. 135. High fixed/investment costs
  136. 136. Russian government supportive of medical devices (imaging focus), investing USD 1bn into R&D centers in 2009-10
  137. 137. E.g., Medradiopreparat received RUB 1bn from the state, with add. RUB 10bn likely
  138. 138. Significant R&D capabilities exist (nuclear research plays to Russian strengths) and good infrastructure based on Russia’s position as a major raw materials (e.g., radionuclide) supplier</li></ul>Bio-Healthcare Priority areas: Nuclear Medicine<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>Nuclear medicine
  139. 139. Specialty medicine/medical imaging branch using radio-active decay for disease diagnosis and treatment
  140. 140. Nuclear imaging (e.g., PET)</li></ul>1 Primarily non-biologics<br />SOURCE: Expert interviews; Evaluate; IMS; NIH; press search; team analysis<br />
  141. 141. 22<br />Rationale<br /><ul><li>Large market globally and in Russia ($230m for Factor VIII and remaining $25m for other factors)
  142. 142. Listed as high priority for local production by both Ministry of Health and the Ministry of Industry and Trade
  143. 143. Pharmstandard, a top local Russian pharmaco with substantial investment backing, investing heavily to produce
  144. 144. Regarded as complex to produce, esp. recombinant form, due to complicated biologics production process
  145. 145. Expected competition from other Russian pharmacos investing in the space
  146. 146. Mid-sized market in Russia (USD ~60mn), growing at ~10%
  147. 147. Relatively competitive space, with multiple effective drugs available (e.g., Remicade, Humira, Enbrel)
  148. 148. Research may be leveraged in other auto-immune areas, e.g., psoriasis or lupus
  149. 149. Some R&D capabilities exist in Russia</li></ul>Bio-Healthcare Priority areas: Blood and Musculo-Skeletal<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>Blood
  150. 150. Products for treatment of blood related disease
  151. 151. R&D partnerships into Blood Factor Co-agulating agents (e.g. long-lasting Factor VIII)
  152. 152. Drugs for musculoskeletal disease treatment
  153. 153. Musculo-skeletal
  154. 154. Rheumatoid arthritis</li></ul>1 Primarily non-biologics<br />SOURCE: Expert interviews; Evaluate; IMS; NIH; press search; team analysis<br />
  155. 155. 23<br />Bio-Healthcare Priority areas: Biosimilars and regenerative medicine<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br />Rationale<br /><ul><li>Bio-similars
  156. 156. Products off-patient but relatively more complex to develop
  157. 157. Biologics market in Russia is very large, at USD 1.6bn, and expected to grow at 14%
  158. 158. Russia has sufficient development/production capabilities to produce bio-similars
  159. 159. Large investments into infrastructure committed/ongoing
  160. 160. Multiple projects close to completion (e.g., Pharmstandard/Generium, Biocad)
  161. 161. Russian government extremely focused on locally produced bio-similars
  162. 162. Integral part of HC2020 and Pharma2020 (partly due to cost savings)
  163. 163. Significant funding (e.g., USD 100mn) already committed by various state entities
  164. 164. Bio-similars development and production
  165. 165. Regenerative medicine
  166. 166. Creating living, functional tissues to repair or replace tissue or organ function
  167. 167. Large potential market ($1.5bn currently, forecasted to grow to $15-20bn by 2025)
  168. 168. Existing capabilities/infrastructure (e.g., stem cells in SPb), enhanced by beneficial regulatory environment regulations
  169. 169. Research direction relevant for other TAs (e.g., alimentary)
  170. 170. Relatively open space with no dominant leader
  171. 171. Regenerative medicine (e.g., stem cells)</li></ul>SOURCE: Expert interviews; Evaluate; IMS; Scientia Advisors; PWC; press search; team analysis<br />
  172. 172. 24<br /><ul><li>Diagnostics
  173. 173. Diagnostics applied across TAs
  174. 174. Relatively small market (USD 400mn globally), which grows very rapidly (expected 25% CAGR)
  175. 175. Despite relatively low potential of each test (USD 100-150mn globally), frequent identification of new biomarkers expected to drive the size
  176. 176. Growing evidence of clinical utility likely to drive adoption, and market participants likely to capture greater share of value
  177. 177. Market still nascent, with significant degree of fragmentation allowing for relatively easy entry of new players
  178. 178. Some R&D capabilities exist in Russia
  179. 179. Companion diagnostics (e.g., in oncology)
  180. 180. Talent development
  181. 181. Search and development of talented scientists
  182. 182. National incubators can be an effective tool to encourage innovation
  183. 183. E.g., USD 25-50K grants to graduate students, with larger follow-on funding based on performance
  184. 184. National incubators concept allows to diversify funding targets, channel money to most effective uses, and create synergies
  185. 185. Large of large numbers stipulates that some funding would be successful
  186. 186. Follow-on funding approach ensures performance-based funding
  187. 187. Common infrastructure (incl. management support) would create significant economies-of-scale for funding recipients
  188. 188. National incubators</li></ul>Bio-Healthcare Priority areas: Talent development and diagnostics<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br />Rationale<br />SOURCE: Expert interviews; press search; team analysis<br />
  189. 189. 25<br />Rationale<br /><ul><li>Largest segment of the bioinformatics markets, expected to be USD 10bn globally in 2020
  190. 190. Fast market growth (>25% a year)
  191. 191. Large disruptive potential, e.g., making a breakthrough for personalized medicine
  192. 192. Low barriers to entry: relatively low infrastructure/ start-up costs and high potential talent pool
  193. 193. Relatively low capital costs with big potential benefit, e.g., FDA estimates that 10% improvement in drug efficacy prediction rate can save USD 100mn devel. cost per drug
  194. 194. Synergies with other Skolkovo bio-HC R&D
  195. 195. A large component of drug development BI (total drug development market is expected to be USD 8bn globally in 2020)
  196. 196. Fast market growth (>20% a year)
  197. 197. Strong synergy with other biotech initiatives in healthcare: potential for faster and more cost efficient drug development through in silico assessment of candidate molecules</li></ul>Bio-Informatics Priority areas: Molecular medicine and Drug development<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>Molecular Medicine
  198. 198. Development of molecular interventions to correct genetic/mol. errors of disease
  199. 199. DNA sequencing1
  200. 200. Drug development
  201. 201. Use of data, analysis and modelling techniques to develop/test new molecules
  202. 202. Pathway modeling
  203. 203. Virtual screening</li></ul>1 Not confined to molecular medicine but cross-cutting<br />SOURCE: Expert interviews; team analysis<br />
  204. 204. 26<br />Rationale<br /><ul><li>Relatively unclear market size and potential timing of market development, however, disruptive is potential high
  205. 205. High computational skills requirements maps, well to Russian academic and current research strengths
  206. 206. High potential for partnerships
  207. 207. High market potential (estimated at USD 2bn by 2015), expected to grow at 20% rate
  208. 208. High computational skills requirements leverage traditional Russian R&D strengths
  209. 209. Can act as an enabler for other bio-healthcare areas</li></ul>Bio-Informatics Priority areas: Gene therapy and Preventive medicine<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>Gene Therapy
  210. 210. Insertion, alteration, or removal of genes within an individual's cells to treat disease.
  211. 211. Genomics1
  212. 212. Preventive medicine
  213. 213. Work on preventing diseases, as opposed to curing them, using bio-informatics advances
  214. 214. Molecular diagnostics2</li></ul>1 Not confined to molecular medicine but cross-cutting<br />2 Illustrative portion of preventative medicine<br />SOURCE: Expert interviews; press search; team analysis<br />
  215. 215. 27<br />Overall, many of the areas in food/feed ingredients are import substitution story, not technology development story<br />Bio-Industrials Priority areas: Food/FeedIngredientsand Plant Extracts<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br />High-level rationale<br /><ul><li>Food/feed ingredients
  216. 216. Organic acids (citric, gluconic, lactic), amino acids (lysine, threonine) vitamins.
  217. 217. Lysine (aminoacids)
  218. 218. Medium size market (~$40-60 m) and quickly growth market (15% a year) in Russia
  219. 219. Significant potential for import substitution (currently 80% is imported)
  220. 220. Good accumulated research as Soviet Union was one of the world leaders in lysine production
  221. 221. Very competitive industry internationally
  222. 222. Citric acid
  223. 223. Average market (~$20-30 m)
  224. 224. Existing production in Russia (JSC Citrobel)
  225. 225. Plant extracts
  226. 226. Hydrocolloids (gums and starch), flavor and fragrance ingredients (essential oils, botanicals),
  227. 227. Industrial starch
  228. 228. Large market ($150-200 m) in Russia
  229. 229. Slow growth (2,5-3% globally)
  230. 230. Russia has accumulated substantial research base of starch technology driven by significant local producing industry: main market players in Russia are Efremovsky, Gulkevichsky, Chaplygin, Zvyagin, Krahmaloproduct
  231. 231. Exists potential for development of niche products (e.g. for oil drilling)</li></ul>SOURCE: Expert interviews; team analysis<br />
  232. 232. 28<br />Environmental theme largely depending on strict regulatory regime which is lacking in Russia<br />Bio-Industrials Priority areas: Bulk/polymers and Bioremediation<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br />High-level rationale<br /><ul><li>Bulk/polymers
  233. 233. Natural rubber, bioplastics, polyols (sorbitol, mannitol, xylitol, glycerin)
  234. 234. Sorbitol technology
  235. 235. Big market size ($50-150 m) in Russia and average growth (13%)
  236. 236. Relatively lower feasibility given no local production
  237. 237. High availability of raw material in Russia (starch)
  238. 238. Bioplastics (including biodegradable products) based on carbohydrates as starch, cellulose
  239. 239. Small market size (5% of bulk/polymers market ~$20-30 m) and medium growth in Russia
  240. 240. Unlike many Western countries, no regulatory obligation to use biodegradable materials
  241. 241. High availability of raw material for production (e.g. wood waste from timber industry)
  242. 242. Bio-remediation
  243. 243. Biotreatment of waste, oil spills for clean-up/removal
  244. 244. Oil spills treatment
  245. 245. Currently negligible market size (no statistics) but with medium growth (construction of pipelines, new field exploration)
  246. 246. Lack of regulatory support (no pressure from the state to be environmentally more responsible)
  247. 247. Can be used immediately by existing industry</li></ul>SOURCE: Expert interviews; team analysis<br />
  248. 248. 29<br />Bio-Industrials Priority areas: Marine Biotech<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br />High-level rationale<br /><ul><li>Marine biotech
  249. 249. Application of molecular biological methods to marine and freshwater organisms, to produce foodstuffs, energy, drug compounds
  250. 250. Compounds derived from marine organisms used in healthcare (e.g red or green alga as anti-cancer compound)
  251. 251. Some disruptive potential but only 45 marine-derived natural products tested to be used as medical drugs in preclinical and clinical trials so far, only two have been developed into registered drugs
  252. 252. Fungi as a source for the compounds may be derived in extreme marine environments (cold water in Russia)
  253. 253. Research capability exists (Dalnevostochniy and Kaliningradskiy centres) but limited to only two institutes
  254. 254. Total spend on fish preservation and reproduction in Russia $50-70m
  255. 255. Limited natural resources for classical fish farming
  256. 256. Existing but small fish farming industry
  257. 257. High potential for disruptiveness, in case of extension into genetically modified fish cultures
  258. 258. Fish farming (e.g. fish feed)</li></ul>SOURCE: Expert interviews; team analysis<br />
  259. 259. 30<br />Bio-Industrials Priority areas: Bio-agriculture<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br />High-level rationale<br /><ul><li>Biotech in agriculture
  260. 260. Yield enhancement, transgenic foods, biopesticides
  261. 261. Fast growing genetically modified products for livestock
  262. 262. Big total stock raising market in Russia ($42 bn)
  263. 263. Restrictive regulation in the home market: growing genetically modified food for human consumption is banned in Russia
  264. 264. Unclear regulation on genetically modified plants for use in feedstock
  265. 265. Significant agricultural industry in Russia ($41 bn)
  266. 266. Total global biopesticids market ($ 1,6 bn)
  267. 267. No regulatory restraints, however no supportive laws
  268. 268. Competition with cheaper comparables as pesticides
  269. 269. Biopesticides (i.e. biological defence of plants)</li></ul>SOURCE: Expert interviews; team analysis<br />
  270. 270. 31<br />Bio-Energy Priority areas: Biomass and Biodiesel<br />HIGH LEVEL ASSESSMENT<br />Level 1<br />Direction<br />Description/level 2<br />Rationale<br /><ul><li>Biomass
  271. 271. Biological material from organisms used as a source of renewable energy
  272. 272. Large market (USD 15b globally and USD 50-150m in Russia)
  273. 273. Opportunity to develop species relevant for cold Russian climate, which can also be leveraged in other Nordic countries
  274. 274. Large amounts of available resources in the home market
  275. 275. Genetic modification of biomass, e.g. development of species relevant for a particular climate
  276. 276. Biodiesel
  277. 277. Vegetable oil or animal fat-based diesel fuel
  278. 278. Use of microorganisms to convert raw materials (e..g CO2, wood, sugar) into biodiesel
  279. 279. Significant disruptive potential, e.g. both environmental and energy production technologies
  280. 280. Low potential in the home market
  281. 281. Longer term horizon for development of the technology – 10+ years
  282. 282. Jet biofuel from camelina
  283. 283. High disruptive potential, however market is not defined yet as the technology is not ready
  284. 284. Unlikely government support in the next 10 years
  285. 285. Availability of the plant (camelina) on the Russia market</li></ul>SOURCE: Expert interviews; team analysis<br />
  286. 286. 32<br />Level 1<br />Direction<br />Description/level 2<br /><ul><li>Bio-ethanol
  287. 287. Biofuel used as a motor fuel, mainly as an additive for gasoline</li></ul>Bio-Energy Priority areas: Bioethanol<br />HIGH LEVEL ASSESSMENT<br />Rationale<br /><ul><li>Cellulosic ethanol (e.g. bioethanol from waste)
  288. 288. Large market potential (USD 40b globally in 2009, up to USD 2b in Russia by 2020)
  289. 289. Large amounts of raw materials
  290. 290. Potential exports markets already existing (e.g. current increase from 5% to 10% share of ethanol in petrol in EU starting 2011)
  291. 291. Microbial synthesis of ethanol
  292. 292. Large market potential (USD 40b globally in 2009, up to USD 2b in Russia by 2020)
  293. 293. Longer term horizon for development of the technology – 10+ years
  294. 294. Uncertain potential in the home market</li></ul>SOURCE: Expert interviews; team analysis<br />
  295. 295. The expected impact 2015-2020 <br />IP protected production of essential medicines, healthy food and animal feed, drug and food public safety<br />Improved state health system through new technologies for diagnostics,prevention and treatment of diseases<br />Increased renewables in the total energy balance. Improvement of ecological situation in Russian Federation by reduction ofemissions and conservation of biodiversity.<br /> New jobs created for urban and rural population with diverse<br />Innovative economic development from scientific research originated from Skolkovo, Russia <br />and by transfer of foreign technologies<br />Establishment of the internationally recognized scientific and industrial biotech center<br />The development of related industries (medicine and agriculture) through the creationof the additional demands from the biotechnology industry<br />33<br />
  296. 296. 34<br />There is a unique opportunity for Russia<br />Roger Kornberg, Nobel Laureate<br />

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