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1. Leading Molecules from Bench to Bedside
in Academic World
Manu Nair - Mayo Clinic Ventures
July 26, 2012

2. Introduction: Mayo Clinic/Mayo ClinicIntroduction: Mayo Clinic/Mayo Clinic
VenturesVentures
 Mayo Clinic:
◦ Leader in healthcare
◦ Established in 1889 in Rochester, Minnesota
◦ >55,000 employees serving over a million patients/year
◦ Annual revenue >$8 Billion
◦ Annual research funding ~ $800 Million
 Mayo Clinic Ventures (“MCV”):
◦ IP/Tech Commercialization arm of Mayo
◦ Manages a seed fund of $2Million
◦ Manages a venture capital fund of $35Million
◦ Receives/reviews >300 new ideas/inventions each year
◦ Has a portfolio of ~1300 issued patents
◦ Generates revenues >$30 Million
◦ Several success stories

3. Academic Tech Transfer in USAcademic Tech Transfer in US
 Began with the Bayh-Dole Act of 1980
 US leads in IP/technology transfer from academia to industry
 Goal: To advance technologies through public-private
partnerships
 Govt. funded research does not meet its objective until it fosters
creativity and adds to economic development
 Other developed countries (Japan, most of Europe, Canada,
Australia etc.) have followed the US model
 Indian version: “The Utilization of Public Funded IP” Bill

4. Economic impact of US academic Tech TransferEconomic impact of US academic Tech Transfer
reported by BIO in 2009reported by BIO in 2009

5. Technology Transfer functionsTechnology Transfer functions
 IP identification & evaluation
 Patent filing and prosecution
 Technology development
◦ Seed capital funding
◦ Sponsored research solicitation and management
◦ Developing new collaborations
 Commercialization:
◦ Marketing & Licensing
◦ Contract, drafting, negotiations & management
◦ New company formation
◦ Investment solicitation and management
 Compliance management
 IP enforcement
 Portfolio rationalization
3 Key Goals:3 Key Goals: Revenue Generation, TechnologyRevenue Generation, Technology
Utilization and Research AdvancementUtilization and Research Advancement

6. Healthcare technologies in Tech TransferHealthcare technologies in Tech Transfer
 Therapeutics (includes vaccines)
 Diagnostics (includes predictors and prognostics)
 Devices
 Software (Healthcare IT)
 Clinical Know-How
 Biospecimens
 Research reagents

7. * Forbes 2012* Forbes 2012
 Inadequate Govt. funding for translational research
 High regulatory burden (unless qualifies for “Orphan” indication)
 Long and costly development path
 Tough patent landscape & high cost of prosecution
 Cost of IP enforcement
 Difficulty in early-stage licensing/partnering
◦ High failure rate & resulting risk aversion of industry
◦ Differences in perceived value
 Change in venture capital investment landscape
 Developing a therapeutic could cost up to $1Bill*
Challenges in developing therapeuticsChallenges in developing therapeutics

8. Stages of drug development:Stages of drug development: Small moleculesSmall molecules
Target discovery
Target validation
Target characterization
-structure studies
-functional studies
-reagents/assays
Assay development
HTS
Computer modeling
Hit identification
Efficacy
Exploratory toxicity
Exploratory PK
Scaffolding
Medicinal chemistry
Medicinal chemistry
SAR
Improve potency
Efficacy
Exploratory toxicity
Exploratory PK
Scale-up
API production
Analytical methods
Formulation
GLP toxicology
PK/ADME
Efficacy studies
IND filing
Phase I
Phase II
Phase III
Target
Discovery &
Validation
Lead
Discovery
Lead
Optimization
Pre-Clinical
Development
Clinical
Development

9. Target discovery
Target validation
Target characterization
-structure studies
-functional studies
-reagents/assays
Assay development
Efficacy
Exploratory toxicity
Exploratory PK
Efficacy
Exploratory toxicity
Exploratory PK
Scale-up
API production
Analytical methods
Formulation
GLP toxicology
PK/ADME
Efficacy studies
IND filing
Phase I
Phase II
Phase III
Target
Discovery &
Validation
Lead
Discovery
Lead
Optimization
Pre-Clinical
Development
Clinical
Development
Stages of drug development:Stages of drug development: BiologicsBiologics

10. Risks in developing small molecule drugsRisks in developing small molecule drugs
From: PhRMA, 2008

11. Funding Sources : Public & PrivateFunding Sources : Public & Private
Target
Discovery &
Validation
Lead
Discovery
Lead
Optimization
Pre-Clinical
Development
Clinical
Development
Industry sponsored research and investor capital
NIH funding, philanthropy and foundations

12. Funding Gap: Creates a “no-win” situationFunding Gap: Creates a “no-win” situation
 Funding Gap or Valley of Death:
o Govt. mostly funds basic research & technology may have passed that stage
o Still too risky for private sector to pick it up (has not advanced enough)
From: The PDMA ToolBook for New Product Development

13. Valley of Death for therapeutics: ComponentsValley of Death for therapeutics: Components
 Early stage gap: Between first cell line/animal data and development
of lead molecule candidate:
◦ Patent costs
◦ Optimization of compound & Lead compound selection
◦ Formulation and dosing studies
◦ Pharmacokinetics/Pharmacodynamics studies (including toxicology)
◦ Pre-IND meeting with the FDA
◦ Conservative cost estimate: $300K-$500K
 Mid-stage gap: Pre-IND meeting to IND submission
◦ Additional patent costs
◦ Additional toxicology studies (if needed)
◦ IND preparation (including regulatory consulting fees)
◦ GMP manufacturing of drug
◦ Phase I trial
◦ Conservative cost estimate: $1Million – $3Million

14. Valley of Death: Components (Cont’d)Valley of Death: Components (Cont’d)
 Late-stage gap: Phase II and III trials
◦ Complex multi-center trials required
◦ Very expensive: Could cost several hundred million dollars
(depending on disease indication)
◦ Easier to fill this gap: partnering with investors/industry is easier
at this stage
◦ Goal is to advance technologies to partnering

15. Investment adds exponential valueInvestment adds exponential value
From: VP of Translational Research, MD Anderson Cancer CenterFrom: VP of Translational Research, MD Anderson Cancer Center
 This is older data; included only to show the exponential nature of
value increase
 Today’s values are higher because of increase in development costs.

16. How do successful tech commercialization operationsHow do successful tech commercialization operations
achieve this goal?achieve this goal?
 Many research institutions have launched seed funds to bridge
these gaps. Models include funds:
◦ Managed by institution
◦ Managed by investors
◦ Combination models
 Starting companies, instead of trying for early stage licensing, to
advance the technology
◦ Companies can attract investment dollars and for-profit translational grant
funds
 “Cannot do all”: Focus on core competencies and outsource the
rest to collaborators who are willing to share risks for future
revenue streams

17. Criteria for evaluating technologiesCriteria for evaluating technologies
Primary evaluation
 Proponent / PI
 Stage of development
 IP
 Target validation
 Feasibility
 Biologic / small molecule
Secondary evaluation
 Market
 Competition
 Feedback
 Advantages

18. Bridging the gap with Mayo fundingBridging the gap with Mayo funding
 Innovation Loan Program (“ILP”)
◦ 5% of royalty income directed to fund
◦ Funds utilized to generate data that increase value of the
technology
◦ Low administrative burden and rapid funding decisions
◦ Equivalent to seed funding – high risk, high reward
◦ $200,000 per project
 President’s DiscoveryTranslation Program (“DTP”)
◦ Applications peer reviewed by a committee
◦ Typically 2 cycles per year funding 4 – 8 awards
◦ $300K-$500K per award
◦ To be competitive, technology must be translational

19. Case Study: Gene therapy for glaucomaCase Study: Gene therapy for glaucoma
 Invested ILP funds of $150K
 Invested $250K from DTP
 Identified a company (Oxford Biomedica) as a collaborator
 OxB has a proprietary gene delivery technology
 Focused efforts to generate data from money committed
by Mayo
 It offered clear opportunity to partner with an industry
collaborator for patient benefit
 Moving to Phase I trial
 Value of technology before and after investing $400K:
◦ Before: less than $3Million
◦ After: >$15Million

20. What is the “Mayo way”?What is the “Mayo way”?
 Seed capital funds managed by MCV
 Thoroughly evaluate the opportunities to invest
 Partner with industry at the earliest opportunity
 Co-invest venture capital fund with large VCs to provide
larger investments
 Leverage Mayo’s large clinical capabilities

21. Questions?Questions?
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