16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
1
Elise Brownell, PhD
Founding Partner, ZephyrBiotech, LLC
www.zephyrbi...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
2
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
3
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
4
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
5
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
6
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
7
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
8
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
9
Why Is the Life Science Sector Different?
Factoids
Life Cycle from Di...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
10
Entrepreneurship = Invention + Innovation
Invent:
To think up; devis...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
11
Invent:
To think up; devise
Innovate:
To make changes in the way thi...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
12
Allocation of VC Investment $ By Sector
2009
Software
18%
CleanTech
...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
13
Regional Allocation of VC Life Science
Investment $, 2009
BayArea
29...
ZephyrBiotech LLC
Elise Brownell, PhD.
14
Regional Distribution of Deal Volume
2010, YTD
16 Nov 2010
NE
21%
NW
4%
CAL
34%
...
ZephyrBiotech LLC
Elise Brownell, PhD.
15
Life Science Subsector Distribution of Angel/VC Investment
YTD through 11/5/2010...
ZephyrBiotech LLC
Elise Brownell, PhD.
16
Regional Distribution of Deal Volume
2010, YTD
16 Nov 2010
0%
10%
20%
30%
40%
50...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
17
Regional Allocation of 2009-10 Qualifying
Therapeutic Discovery Gran...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
18
Current Trends in Investment Climate
• Re-emergence of R and D Limit...
ZephyrBiotech LLC
Elise Brownell, PhD.
19
% Financing $ from Specific Sources
(redrawn from Burrill 2Q 2010 Report)
0%
10%...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
20
Current Trends in Investment Climate
• Re-emergence of R and D Limit...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
21
Average Investment (M USD) By Stage
(Through 10/8/10)
0.00
5.00
10.0...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
22
Average Investment (M USD) By Stage
(Through 10/8/10)
0.00
5.00
10.0...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
23
Current Trends in Investment Climate
• Re-emergence of R and D Limit...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
24
Attributes of Agile, Entrepreneurial Life
Science Companies
Traditio...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
25
Creating Value: The Differentiated PTP
• Living statement of unique ...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
26
Creating Value: Building a Decision-Based
Organization
• Decisions a...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
27
Decision-Based Timeline:
Asking the Right Question at the Right Time...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
28
Allocation of Costs Across Functional Areas
Through Phase 2 Clinical...
16 Nov 2010 ZephyrBiotech LLC
Elise Brownell, PhD.
29
Creating Value: Knowledge ManagementX
Ignorance
• Imperative to intr...
Creating Value: Eliminate Fear-Based
Behaviors and Practices
• Assume success
– Reduces redundancy and distraction
– Requi...
Summary
• Meeting timelines Growing value
• Early integration of invention and innovation
as a business model imperative
•...
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From Invention to Innovation In Biotechnology:Strategic and Tactical Approaches to Taking Risks In A High-Stakes Sector

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Scale Business Group sponsored Executive Leadership session presented by Dr Elise Brownell of ZephrBiotech at GameChangers confernce. www.grow-california.com

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From Invention to Innovation In Biotechnology:Strategic and Tactical Approaches to Taking Risks In A High-Stakes Sector

  1. 1. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 1 Elise Brownell, PhD Founding Partner, ZephyrBiotech, LLC www.zephyrbiotech.com elise.brownell@zephyrbiotech.com 925-639-0444 From Invention to Innovation In Biotechnology: Strategic and Tactical Approaches to Taking Risks In A High-Stakes Sector
  2. 2. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 2 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market?
  3. 3. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 3 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market? 10-12 Years
  4. 4. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 4 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market? 10-12 Years Cost?
  5. 5. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 5 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market? 10-12 Years Cost? $1 billion (Adams and Branter, 2010)
  6. 6. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 6 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market? 10-12 Years Cost? $1 billion (Adams and Branter, 2010) Best Odds of Seeing a Clinical Project go to Market?
  7. 7. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 7 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market? 10-12 Years Cost? $1 billion (Adams and Branter, 2010) Best Odds of Seeing a Clinical Project go to Market? 1 in 10
  8. 8. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 8 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market? 10-12 Years Cost? $1 billion (Adams and Branter, 2010) Best Odds of Seeing a Clinical Project go to Market? 1 in 10 Sunk (Operational) Cost to get to the Clinic?
  9. 9. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 9 Why Is the Life Science Sector Different? Factoids Life Cycle from Discovery to Market? 10-12 Years Cost? $1 billion (Adams and Branter, 2010) Best Odds of Seeing a Clinical Project go to Market? 1 in 10 Sunk (Operational) Cost to get to the Clinic? $3-5 M
  10. 10. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 10 Entrepreneurship = Invention + Innovation Invent: To think up; devise Innovate: To make changes in the way things are done; to introduce new methods, processes, devices.
  11. 11. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 11 Invent: To think up; devise Innovate: To make changes in the way things are done; to introduce new methods, processes, devices. BRINGING IDEAS TO LIFE Entrepreneurship = Invention + Innovation
  12. 12. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 12 Allocation of VC Investment $ By Sector 2009 Software 18% CleanTech 11% Internet 17% MedDev 15% Biotech 21% Healthcare Services 1% Other 17% Percent Venture Investment Dollars, 2009
  13. 13. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 13 Regional Allocation of VC Life Science Investment $, 2009 BayArea 29% Boston 16% San Diego 10% NY 7% All Others 38%
  14. 14. ZephyrBiotech LLC Elise Brownell, PhD. 14 Regional Distribution of Deal Volume 2010, YTD 16 Nov 2010 NE 21% NW 4% CAL 34% MidAtl 21% Other 20%
  15. 15. ZephyrBiotech LLC Elise Brownell, PhD. 15 Life Science Subsector Distribution of Angel/VC Investment YTD through 11/5/2010 16 Nov 2010
  16. 16. ZephyrBiotech LLC Elise Brownell, PhD. 16 Regional Distribution of Deal Volume 2010, YTD 16 Nov 2010 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Tx Dev/Del Dx/PM Tech Plat Other MidAtl CAL NW NE
  17. 17. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 17 Regional Allocation of 2009-10 Qualifying Therapeutic Discovery Grant Funds California 29% NE 15% Mid Atlantic 21% NW 4% All Others 31% RegionalAllocation of 2010 Qualifying Therapeutic Discovery Grant Funding
  18. 18. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 18 Current Trends in Investment Climate • Re-emergence of R and D Limited Partnerships • Shift to major pharma for financing and development support
  19. 19. ZephyrBiotech LLC Elise Brownell, PhD. 19 % Financing $ from Specific Sources (redrawn from Burrill 2Q 2010 Report) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 1Q 09 1Q 10 2Q 09 2Q 10 PercentageofBiotechFinancing$fromSpecific Source Quarter Partnerng Other VC Debt PIPES FollowOn IPO 16 Nov 2010
  20. 20. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 20 Current Trends in Investment Climate • Re-emergence of R and D Limited Partnerships • Shift to major pharma for financing and development support • Corporate and strategic partnering at earlier stages • Re-defining “product” to include IP and Clinical Proof of Concept Validation – Re-sets the value inflection point
  21. 21. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 21 Average Investment (M USD) By Stage (Through 10/8/10) 0.00 5.00 10.00 15.00 20.00 25.00 Disc/Res PC Tox Clin Sub/Launch AverageInvestment,MUSD Stage of Development
  22. 22. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 22 Average Investment (M USD) By Stage (Through 10/8/10) 0.00 5.00 10.00 15.00 20.00 25.00 Disc/Res PC Tox Clin Sub/Launch AverageInvestment,MUSD Stage of Development Invention Innovation
  23. 23. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 23 Current Trends in Investment Climate • Re-emergence of R and D Limited Partnerships • Shift to major pharma for financing and development support • Corporate and strategic partnering at earlier stages • Re-defining “product” to include IP and Clinical Proof of Concept Validation Need for taking risks, building value, and creating organizational coherence at ever earlier stages
  24. 24. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 24 Attributes of Agile, Entrepreneurial Life Science Companies Traditional, Legacy-based Entrepreneurial Decision Making Reductive Holistic and Matrixed Operational Focus Work breakdown structure Flow, value-creation Regulation Focus Metrics-regulated Self-regulated Planning Style Anticipatory, prescriptive, directive Hypothesis creation Process Style Optimizing; efficiency oriented Adaptive; series of fitness tests
  25. 25. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 25 Creating Value: The Differentiated PTP • Living statement of unique value proposition – Invites cross-functional conversation – Oriented to Doing the Right Thing – Holistic – Contextual: Competitive environment and effective knowledge management practices • Sets minimum requirements – The null hypothesis – Alignment re: stop criteria (early elimination) • Builds resilience and coherence – Stable reference point for problem solving , recovering from organizational arrhythmia – Promotes smoother stage transitions
  26. 26. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 26 Creating Value: Building a Decision-Based Organization • Decisions as value-building products: risk reduction • Engages entire organization • Embeds CONTEXT and MEANING to actions • Shifts organization to self-regulating rather than only metrics-regulating • Creates transparency and accountability • Ensures resource-relevant triggers are pulled at right time, to fit stage of project
  27. 27. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 27 Decision-Based Timeline: Asking the Right Question at the Right Time Who are partner(s) for production? PRODUCTION How much material will we need? TOXICOLOGY Which CROs do we interview? CLINIC Which CROs do we hire?
  28. 28. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 28 Allocation of Costs Across Functional Areas Through Phase 2 Clinical Development 53% 23% 24% CMC/Mfg Preclinical Clinical
  29. 29. 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 29 Creating Value: Knowledge ManagementX Ignorance • Imperative to introduce time and venue for distilling information into knowledge and wisdom – Reduces unnecessary duplication – Allows trends, new insights to emerge – Essential in driving decision making – Supports organizational memory in a climate of turnover
  30. 30. Creating Value: Eliminate Fear-Based Behaviors and Practices • Assume success – Reduces redundancy and distraction – Requires anticipatory spending prior to results – Requires best-practices problem solving – Requires a change of language from “We won’t be able to do that” to “What’s keeping us from doing that?” • Make communications transparent – Both internally and externally – Builds credibility 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 30
  31. 31. Summary • Meeting timelines Growing value • Early integration of invention and innovation as a business model imperative • Key tools: – Differentiated PTP – Creation of a Decision-based culture – Incorporating Effective Knowledge Management Practices – Eliminate Fear-based Cultures • Tapping alternative sources of funding 16 Nov 2010 ZephyrBiotech LLC Elise Brownell, PhD. 31

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