CURE/Yale
BioHaven Panel: 'The Next Big Idea'
A special panel discussion, "The Next Big Idea
- Emerging Opportunities in the Life Sciences," took place April 16 at Yale's Anlyan Center as part of the CURE/Yale BioHaven Entrepreneurship Series. Introduced by Jon Soderstrom, managing director of the Yale Office of Cooperative Research, the panel included Roger Longman, managing partner at Windhover Information; William Burkoth, senior manager venture capital
at Pfizer Venture Investments; Dr. Richard Flavell, chairman of the Immunobiology Department at Yale and founding scientist of VaxInnate; Haifan Lin, director of the Yale Stem Cell Center; and venture capitalist David Scheer, president of Scheer & Company, Inc.
In his opening remarks, Roger Longman said that "big ideas" were relatively easy to come by, compared with figuring out how to commercialize them successfully. He said it was getting harder these days to secure funding for early-stage companies, noting that private venture capital was providing twice as much funding these days to the industry as the public stock markets.
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| Roger Longman and
David Scheer |
Longman warned that no one can start a biotech company without having a clear exit strategy in mind, and that these days the strategy was more likely to be selling the company to an
established pharmaceutical company rather than an IPO. He noted, though, that the odds of being acquired were not that good - there have been only ten acquisitions per year on average the past few years. Partly for that reason, biotechs have shown more interest in forming alliances with established partners, but that strategy can be a two-edged sword, Longman said, because biotech stockholders worry that an early alliance may limit the company's later exit opportunities.
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| William Burkoth
and Richard Flavell |
Dr. Flavell said that an understanding of inflammation and the immune response was playing an ever-more important role in the understanding of a wide variety of human diseases. These basic mechanisms, evolved to protect the organism from infection, were now implicated in a wide arrange of disorders as well, including arthritis, type 2 diabetes, and cancer. Commercialization of vaccines was retarded some years ago by worries about legal liability, Dr. Flavell said, but vaccines were now one of the most promising areas for development. As the intricacies of the immune system response are better understood, more customized therapeutics will be developed, Dr. Flavell said, accelerated by developments in related areas such as bioengineering and stem cell research.
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Haifan
Lin
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Dr. Lin said that the most highly publicized area of stem cell research has been the promise of regenerative medicine. He said he had no doubt that there would be achievements in
this area, but that commercial opportunities would probably emerge sooner in three other areas that have been less publicized. For example, he said that study of cancer stem cells was a promising area for new therapeutics. Currently chemotherapy and radiation therapy proceed by attacking all cancer stems, but it has been
shown in leukemia, for example, that only a small fraction of the cancer cells can give rise to cancer when transplanted. Targeting these "cancer stem cells" would be a much more efficient therapy.
A second possible commercial application of stem cell research is to use stem cells of the appropriate type as targets for drug screening - a "thousand little human hearts" in a matrix, for example, to test new cardiac medications. Finally, Dr. Lin pointed out that the study of stem cells has opened new inquiries into the nature of the stem cell niche - the microenvironment in which stem cells are found and which appears to direct the activation of stem cells in certain cases.
William Burkoth said that Pfizer’s first foray into VC investing was in the area of ancillary services such as diagnostic testing. Now, however, they are actively seeking partnerships with pharmaceutical and therapeutic start-ups. They look for investments that provide a financial return but also represent a fit with Pfizer’s overall strategy. Getting a seat at the table early on, he said, is a good way for Pfizer to keep up with developments. He said that Pfizer’s investments were typically on the order of $3 million to $5 million
inititially, but they could go up to $30 million in unusual cases. Pfizer would not take a position above 20%, however, in order to avoid having to include a company in its consolidated
accounts.
David Scheer stressed the importance of good people as well as good science in forming a biotech venture. He said that in an environment in which only
four or five proposals out of 800 or 900 get funded, he looks for ventures staffed by people with known names and credible resumes. As a case history, he mentioned
Tengion, a clinical stage biotechnology
company that has pioneered what it calls the Autologous Organ Regeneration
Platform™, which catalyzes the body's innate ability to regenerate.
Tengion has in development what it calls "neo-organs" and
"neo-tissues," such as bladders and vessels, that combine biocompatible materials and a patient's own
(autologous) cells to regenerate diseased and failing organs and tissues. Tengion's management team averages twenty years of experience in biotech, pharmaceutical, and device companies.
Presented by CURE and the
Yale Office of Cooperative Research, and sponsored by Wiggin
and Dana, Price WaterhouseCoopers, and Elm Street Ventures,
the BioHaven presentations were followed by an hour of
cocktails and networking.
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