05 longo addf-2.14.12

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05 longo addf-2.14.12

  1. 1. Starting Your Own Biotech: Challenges and Pitfalls Frank M. Longo, MD, PhD February 14, 2012 ADDF Drug Discovery Conference UNC/UCSF
  2. 2. p75NTR – A Valid AD Target? Aβ p75NTR • membrane disruption Rho • Ca2+ influx GDI • oxidative stress Death Survival adaptors adaptors calpain MLK PI3KRho A PKA JNK AKT cdk5 GSK3 p-CREB p-tau • Synaptic dysfunction • Spine loss • Neuritic dystrophy • Neuronal death
  3. 3. Rational for company formation Pharma/Biotech • Prioritized? • Your involvement? Company Formation University • PrioritizationTechnology/ Tech • Appropriate nurturingIP Transfer • Involvement • ($ not a useful rational) Requirements: • Inclination • Time • Mentors/networking
  4. 4. Company EvolutionMarket? Timing?IP: Univ commitment; use vs matter; timing of filing; filing vs granted claimsIdentify founders License tech from UnivHire attorney (equity/discounts) • Need $• Create a C Corporation• Capitalization tables (dilution) Virtual company • CROsCreate business plan • CEO? Employees?• Get examples/circulate to critics • Academic collaborators• Exec summary / ‘elevator message’ • Prepare for partneringFunding (dilutive vs non-dilutive) End points (exit strategy):• SBIR • License/Partner• Venture-Philanthropy • Sell• Angel • Ongoing• VC
  5. 5. Virtual company functionTechnology maturation (“baking the risk out”)• $$$• IP: novel derivatives; composition of matter• Efficacy models – independent verification• Biomarker validation• ADMET: PK (BA and BBB); hERG/CYP/AMES; MTD• Pre-IND• Phase I, IIEffective leveraging of non-dilutive capital• Optimal selection of CROs• Academic collaborations that benefit PI (compounds or $)
  6. 6. Your Role Possible: • Founder • Board Chair (COB) • Board member • Scientific Advisory Board (SAB) • ConsultantLikely against university policy:• CEO• Chief Scientific Officer (CSO)/VP R&D• Any employee status
  7. 7. FundingSelf, friends, family Angel •Less equity? High maintenance?Venture philanthropy• Less equity, stamp of approval, guidanceSBIR / STTR (non-equity)• Phase I ($ 150K)• Phase II ($1M)Licensing / PartnershipVC [also: corporate/pharma VC]• ROI time constraints/ limited exit strategies• Each investment high risk, therefore take massive equity• Dilution of founder / Term sheet• Cadre of ‘consultants’
  8. 8. Licensing / Partnering What pharma is looking for: • IP • Target/mechanism validation and specificity • In vivo target engagement? • Translatable biomarker (dose finding / efficacy) • Tox outlook • Multiple disease models/endpoints • Independent verification (50% non-reproducible)Licensing structure:• Upfront payment vs back-loaded• Milestone payments (preclinical, IND, Phase I, II, III)• Royalties %• Due diligence• Ownership of data
  9. 9. The futureUniversity incubator models – workable?New pharma-university models: bypassingstart-ups and small biotech?VC model relevance? Favorable trends: • NIH translational grants • University translational platforms • Advanced / translatable biomarkers • Streamlined ADMET principles

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