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Science Has A Systemic Problem, Not an Innovation Problem

Curator: Stephen J. Williams, Ph.D.

    A recent email, asking me to submit a survey, got me thinking about the malaise that scientists and industry professionals frequently bemoan: that innovation has been stymied for some reason and all sorts of convuluted processes must be altered to spur this mythical void of great new discoveries…..  and it got me thinking about our current state of science, and what is the perceived issue… and if this desert of innovation actually exists or is more a fundamental problem which we have created.

The email was from an NIH committee asking for opinions on recreating the grant review process …. now this on the same day someone complained to me about a shoddy and perplexing grant review they received.

The following email, which was sent out to multiple researchers, involved in either NIH grant review on both sides, as well as those who had been involved in previous questionnaires and studies on grant review and bias.  The email asked for researchers to fill out a survey on the grant review process, and how to best change it to increase innovation of ideas as well as inclusivity.  In recent years, there have been multiple survey requests on these matters, with multiple confusing procedural changes to grant format and content requirements, adding more administrative burden to scientists.

The email from Center for Scientific Review (one of the divisions a grant will go to before review {they set up review study sections and decide what section a grant should be  assigned to} was as follows:

Update on Simplifying Review Criteria: A Request for Information

https://www.csr.nih.gov/reviewmatters/2022/12/08/update-on-simplifying-review-criteria-a-request-for-information/

NIH has issued a request for information (RFI) seeking feedback on revising and simplifying the peer review framework for research project grant applications. The goal of this effort is to facilitate the mission of scientific peer review – identification of the strongest, highest-impact research. The proposed changes will allow peer reviewers to focus on scientific merit by evaluating 1) the scientific impact, research rigor, and feasibility of the proposed research without the distraction of administrative questions and 2) whether or not appropriate expertise and resources are available to conduct the research, thus mitigating the undue influence of the reputation of the institution or investigator.

Currently, applications for research project grants (RPGs, such as R01s, R03s, R15s, R21s, R34s) are evaluated based on five scored criteria: Significance, Investigators, Innovation, Approach, and Environment (derived from NIH peer review regulations 42 C.F.R. Part 52h.8; see Definitions of Criteria and Considerations for Research Project Grant Critiques for more detail) and a number of additional review criteria such as Human Subject Protections.

NIH gathered input from the community to identify potential revisions to the review framework. Given longstanding and often-heard concerns from diverse groups, CSR decided to form two working groups to the CSR Advisory Council—one on non-clinical trials and one on clinical trials. To inform these groups, CSR published a Review Matters blog, which was cross-posted on the Office of Extramural Research blog, Open Mike. The blog received more than 9,000 views by unique individuals and over 400 comments. Interim recommendations were presented to the CSR Advisory Council in a public forum (March 2020 videoslides; March 2021 videoslides). Final recommendations from the CSRAC (report) were considered by the major extramural committees of the NIH that included leadership from across NIH institutes and centers. Additional background information can be found here. This process produced many modifications and the final proposal presented below. Discussions are underway to incorporate consideration of a Plan for Enhancing Diverse Perspectives (PEDP) and rigorous review of clinical trials RPGs (~10% of RPGs are clinical trials) within the proposed framework.

Simplified Review Criteria

NIH proposes to reorganize the five review criteria into three factors, with Factors 1 and 2 receiving a numerical score. Reviewers will be instructed to consider all three factors (Factors 1, 2 and 3) in arriving at their Overall Impact Score (scored 1-9), reflecting the overall scientific and technical merit of the application.

  • Factor 1: Importance of the Research (Significance, Innovation), numerical score (1-9)
  • Factor 2: Rigor and Feasibility (Approach), numerical score (1-9)
  • Factor 3: Expertise and Resources (Investigator, Environment), assessed and considered in the Overall Impact Score, but not individually scored

Within Factor 3 (Expertise and Resources), Investigator and Environment will be assessed in the context of the research proposed. Investigator(s) will be rated as “fully capable” or “additional expertise/capability needed”. Environment will be rated as “appropriate” or “additional resources needed.” If a need for additional expertise or resources is identified, written justification must be provided. Detailed descriptions of the three factors can be found here.

Now looking at some of the Comments were very illuminating:

I strongly support streamlining the five current main review criteria into three, and the present five additional criteria into two. This will bring clarity to applicants and reduce the workload on both applicants and reviewers. Blinding reviewers to the applicants’ identities and institutions would be a helpful next step, and would do much to reduce the “rich-getting-richer” / “good ole girls and good ole boys” / “big science” elitism that plagues the present review system, wherein pedigree and connections often outweigh substance and creativity.

I support the proposed changes. The shift away from “innovation” will help reduce the tendency to create hype around a proposed research direction. The shift away from Investigator and Environment assessments will help reduce bias toward already funded investigators in large well-known institutions.

As a reviewer for 5 years, I believe that the proposed changes are a step in the right direction, refocusing the review on whether the science SHOULD be done and whether it CAN BE DONE WELL, while eliminating burdensome and unhelpful sections of review that are better handled administratively. I particularly believe that the de-emphasis of innovation (which typically focuses on technical innovation) will improve evaluation of the overall science, and de-emphasis of review of minor technical details will, if implemented correctly, reduce the “downward pull” on scores for approach. The above comments reference blinded reviews, but I did not see this in the proposed recommendations. I do not believe this is a good idea for several reasons: 1) Blinding of the applicant and institution is not likely feasible for many of the reasons others have described (e.g., self-referencing of prior work), 2) Blinding would eliminate the potential to review investigators’ biosketches and budget justifications, which are critically important in review, 3) Making review blinded would make determination of conflicts of interest harder to identify and avoid, 4) Evaluation of “Investigator and Environment” would be nearly impossible.

Most of the Comments were in favor of the proposed changes, however many admitted that it adds additional confusion on top of many administrative changes to formats and content of grant sections.

Being a Stephen Covey devotee, and just have listened to  The Four Principles of Execution, it became more apparent that issues that hinder many great ideas coming into fruition, especially in science, is a result of these systemic or problems in the process, not at the level of individual researchers or small companies trying to get their innovations funded or noticed.  In summary, Dr. Covey states most issues related to the success of any initiative is NOT in the strategic planning, but in the failure to adhere to a few EXECUTION principles.  Primary to these failures of strategic plans is lack of accounting of what Dr. Covey calls the ‘whirlwind’, or those important but recurring tasks that take us away from achieving the wildly important goals.  In addition, lack of  determining lead and lag measures of success hinder such plans.

In this case a lag measure in INNOVATION.  It appears we have created such a whirlwind and focus on lag measures that we are incapable of translating great discoveries into INNOVATION.

In the following post, I will focus on issues relating to Open Access, publishing and dissemination of scientific discovery may be costing us TIME to INNOVATION.  And it appears that there are systemic reasons why we appear stuck in a rut, so to speak.

The first indication is from a paper published by Johan Chu and James Evans in 2021 in PNAS:

 

Slowed canonical progress in large fields of science

Chu JSG, Evans JA. Slowed canonical progress in large fields of science. Proc Natl Acad Sci U S A. 2021 Oct 12;118(41):e2021636118. doi: 10.1073/pnas.2021636118. PMID: 34607941; PMCID: PMC8522281

 

Abstract

In many academic fields, the number of papers published each year has increased significantly over time. Policy measures aim to increase the quantity of scientists, research funding, and scientific output, which is measured by the number of papers produced. These quantitative metrics determine the career trajectories of scholars and evaluations of academic departments, institutions, and nations. Whether and how these increases in the numbers of scientists and papers translate into advances in knowledge is unclear, however. Here, we first lay out a theoretical argument for why too many papers published each year in a field can lead to stagnation rather than advance. The deluge of new papers may deprive reviewers and readers the cognitive slack required to fully recognize and understand novel ideas. Competition among many new ideas may prevent the gradual accumulation of focused attention on a promising new idea. Then, we show data supporting the predictions of this theory. When the number of papers published per year in a scientific field grows large, citations flow disproportionately to already well-cited papers; the list of most-cited papers ossifies; new papers are unlikely to ever become highly cited, and when they do, it is not through a gradual, cumulative process of attention gathering; and newly published papers become unlikely to disrupt existing work. These findings suggest that the progress of large scientific fields may be slowed, trapped in existing canon. Policy measures shifting how scientific work is produced, disseminated, consumed, and rewarded may be called for to push fields into new, more fertile areas of study.

So the Summary of this paper is

  • The authors examined 1.8 billion citations among 90 million papers over 241 subjects
  • found the corpus of papers do not lead to turnover of new ideas in a field, but rather the ossification or entrenchment of canonical (or older ideas)
  • this is mainly due to older paper cited more frequently than new papers with new ideas, potentially because authors are trying to get their own papers cited more frequently for funding and exposure purposes
  • The authors suggest that “fundamental progress may be stymied if quantitative growth of scientific endeavors is not balanced by structures fostering disruptive scholarship and focusing attention of novel ideas”

The authors note that, in most cases, science policy reinforces this “more is better” philosophy”,  where metrics of publication productivity are either number of publications or impact measured by citation rankings.  However, using an analysis of citation changes occurring in large versus smaller fields, it becomes apparent that this process is favoring the older, more established papers and a recirculating of older canonical ideas.

“Rather than resulting in faster turnover of field paradigms, the massive amounts of new publications entrenches the ideas of top-cited papers.”  New ideas are pushed down to the bottom of the citation list and potentially lost in the literature.  The authors suggest that this problem will intensify as the “annual mass” of new publications in each field grows, especially in large fields.  This issue is exacerbated by the deluge on new online ‘open access’ journals, in which authors would focus on citing the more highly cited literature. 

We maybe at a critical junction, where if many papers are published in a short time, new ideas will not be considered as carefully as the older ideas.  In addition,

with proliferation of journals and the blurring of journal hierarchies due to online articles-level access can exacerbate this problem

As a counterpoint, the authors do note that even though many molecular biology highly cited articles were done in 1976, there has been extremely much innovation since then however it may take a lot more in experiments and money to gain the level of citations that those papers produced, and hence a lower scientific productivity.

This issue is seen in the field of economics as well

Ellison, Glenn. “Is peer review in decline?” Economic Inquiry, vol. 49, no. 3, July 2011, pp. 635+. Gale Academic OneFile, link.gale.com/apps/doc/A261386330/AONE?u=temple_main&sid=bookmark-AONE&xid=f5891002. Accessed 12 Dec. 2022.

Abstract

Over the past decade, there has been a decline in the fraction of papers in top economics journals written by economists from the highest-ranked economics departments. This paper documents this fact and uses additional data on publications and citations to assess various potential explanations. Several observations are consistent with the hypothesis that the Internet improves the ability of high-profile authors to disseminate their research without going through the traditional peer-review process. (JEL A14, 030)

The facts part of this paper documents two main facts:

1. Economists in top-ranked departments now publish very few papers in top field journals. There is a marked decline in such publications between the early 1990s and early 2000s.

2. Comparing the early 2000s with the early 1990s, there is a decline in both the absolute number of papers and the share of papers in the top general interest journals written by Harvard economics department faculty.

Although the second fact just concerns one department, I see it as potentially important to understanding what is happening because it comes at a time when Harvard is widely regarded (I believe correctly) as having ascended to the top position in the profession.

The “decline-of-peer-review” theory I allude to in the title is that the necessity of going through the peer-review process has lessened for high-status authors: in the old days peer-reviewed journals were by far the most effective means of reaching readers, whereas with the growth of the Internet high-status authors can now post papers online and exploit their reputation to attract readers.

Many alternate explanations are possible. I focus on four theories: the decline-in-peer-review theory and three alternatives.

1. The trends could be a consequence of top-school authors’ being crowded out of the top journals by other researchers. Several such stories have an optimistic message, for example, there is more talent entering the profession, old pro-elite biases are being broken down, more schools are encouraging faculty to do cutting-edge research, and the Internet is enabling more cutting-edge research by breaking down informational barriers that had hampered researchers outside the top schools. (2)

2. The trends could be a consequence of the growth of revisions at economics journals discussed in Ellison (2002a, 2002b). In this more pessimistic theory, highly productive researchers must abandon some projects and/or seek out faster outlets to conserve the time now required to publish their most important works.

3. The trends could simply reflect that field journals have declined in quality in some relative sense and become a less attractive place to publish. This theory is meant to encompass also the rise of new journals, which is not obviously desirable or undesirable.

The majority of this paper is devoted to examining various data sources that provide additional details about how economics publishing has changed over the past decade. These are intended both to sharpen understanding of the facts to be explained and to provide tests of auxiliary predictions of the theories. Two main sources of information are used: data on publications and data on citations. The publication data include department-level counts of publications in various additional journals, an individual-level dataset containing records of publications in a subset of journals for thousands of economists, and a very small dataset containing complete data on a few authors’ publication records. The citation data include citations at the paper level for 9,000 published papers and less well-matched data that is used to construct measures of citations to authors’ unpublished works, to departments as a whole, and to various journals.

Inside Job or Deep Impact? Extramural Citations and the Influence of Economic Scholarship

Josh Angrist, Pierre Azoulay, Glenn Ellison, Ryan Hill, Susan Feng Lu. Inside Job or Deep Impact? Extramural Citations and the Influence of Economic Scholarship.

JOURNAL OF ECONOMIC LITERATURE

VOL. 58, NO. 1, MARCH 2020

(pp. 3-52)

So if innovation is there but it may be buried under the massive amount of heavily cited older literature, do we see evidence of this in other fields like medicine?

Why Isn’t Innovation Helping Reduce Health Care Costs?

 
 

National health care expenditures (NHEs) in the United States continue to grow at rates outpacing the broader economy: Inflation- and population-adjusted NHEs have increased 1.6 percent faster than the gross domestic product (GDP) between 1990 and 2018. US national health expenditure growth as a share of GDP far outpaces comparable nations in the Organization for Economic Cooperation and Development (17.2 versus 8.9 percent).

Multiple recent analyses have proposed that growth in the prices and intensity of US health care services—rather than in utilization rates or demographic characteristics—is responsible for the disproportionate increases in NHEs relative to global counterparts. The consequences of ever-rising costs amid ubiquitous underinsurance in the US include price-induced deferral of care leading to excess morbidity relative to comparable nations.

These patterns exist despite a robust innovation ecosystem in US health care—implying that novel technologies, in isolation, are insufficient to bend the health care cost curve. Indeed, studies have documented that novel technologies directly increase expenditure growth.

Why is our prolific innovation ecosystem not helping reduce costs? The core issue relates to its apparent failure to enhance net productivity—the relative output generated per unit resource required. In this post, we decompose the concept of innovation to highlight situations in which inventions may not increase net productivity. We begin by describing how this issue has taken on increased urgency amid resource constraints magnified by the COVID-19 pandemic. In turn, we describe incentives for the pervasiveness of productivity-diminishing innovations. Finally, we provide recommendations to promote opportunities for low-cost innovation.

 

 

Net Productivity During The COVID-19 Pandemic

The issue of productivity-enhancing innovation is timely, as health care systems have been overwhelmed by COVID-19. Hospitals in Italy, New York City, and elsewhere have lacked adequate capital resources to care for patients with the disease, sufficient liquidity to invest in sorely needed resources, and enough staff to perform all of the necessary tasks.

The critical constraint in these settings is not technology: In fact, the most advanced technology required to routinely treat COVID-19—the mechanical ventilator—was invented nearly 100 years ago in response to polio (the so-called iron lung). Rather, the bottleneck relates to the total financial and human resources required to use the technology—the denominator of net productivity. The clinical implementation of ventilators has been illustrative: Health care workers are still required to operate ventilators on a nearly one-to-one basis, just like in the mid-twentieth century. 

High levels of resources required for implementation of health care technologies constrain the scalability of patient care—such as during respiratory disease outbreaks such as COVID-19. Thus, research to reduce health care costs is the same kind of research we urgently require to promote health care access for patients with COVID-19.

Types Of Innovation And Their Relationship To Expenditure Growth

The widespread use of novel medical technologies has been highlighted as a central driver of NHE growth in the US. We believe that the continued expansion of health care costs is largely the result of innovation that tends to have low productivity (exhibit 1). We argue that these archetypes—novel widgets tacked on to existing workflows to reinforce traditional care models—are exactly the wrong properties to reduce NHEs at the systemic level.

Exhibit 1: Relative productivity of innovation subtypes

Source: Authors’ analysis.

Content Versus Process Innovation

Content (also called technical) innovation refers to the creation of new widgets, such as biochemical agents, diagnostic tools, or therapeutic interventions. Contemporary examples of content innovation include specialty pharmaceuticalsmolecular diagnostics, and advanced interventions and imaging.

These may be contrasted with process innovations, which address the organized sequences of activities that implement content. Classically, these include clinical pathways and protocols. They can address the delivery of care for acute conditions, such as central line infections, sepsis, or natural disasters. Alternatively, they can target chronic conditions through initiatives such as team-based management of hypertension and hospital-at-home models for geriatric care. Other processes include hiring staffdelegating labor, and supply chain management.

Performance-Enhancing Versus Cost-Reducing Innovation

Performance-enhancing innovations frequently create incremental outcome gains in diagnostic characteristics, such as sensitivity or specificity, or in therapeutic characteristics, such as biomarkers for disease status. Their performance gains often lead to higher prices compared to existing alternatives.  

Performance-enhancing innovations can be compared to “non-inferior” innovations capable of achieving outcomes approximating those of existing alternatives, but at reduced cost. Industries outside of medicine, such as the computing industry, have relied heavily on the ability to reduce costs while retaining performance.

In health care though, this pattern of innovation is rare. Since passage of the 2010 “Biosimilars” Act aimed at stimulating non-inferior innovation and competition in therapeutics markets, only 17 agents have been approved, and only seven have made it to market. More than three-quarters of all drugs receiving new patents between 2005 and 2015 were “reissues,” meaning they had already been approved, and the new patent reflected changes to the previously approved formula. Meanwhile, the costs of approved drugs have increased over time, at rates between 4 percent and 7 percent annually.

Moreover, the preponderance of performance-enhancing diagnostic and therapeutic innovations tend to address narrow patient cohorts (such as rare diseases or cancer subtypes), with limited clear clinical utility in broader populations. For example, the recently approved eculizimab is a monoclonal antibody approved for paroxysmal nocturnal hemoglobinuria—which effects 1 in 10 million individuals. At the time of its launch, eculizimab was priced at more than $400,000 per year, making it the most expensive drug in modern history. For clinical populations with no available alternatives, drugs such as eculizimab may be cost-effective, pending society’s willingness to pay, and morally desirable, given a society’s values. But such drugs are certainly not cost-reducing.

Additive Versus Substitutive Innovation

Additive innovations are those that append to preexisting workflows, while substitutive innovations reconfigure preexisting workflows. In this way, additive innovations increase the use of precedent services, whereas substitutive innovations decrease precedent service use.

For example, previous analyses have found that novel imaging modalities are additive innovations, as they tend not to diminish use of preexisting modalities. Similarly, novel procedures tend to incompletely replace traditional procedures. In the case of therapeutics and devices, off-label uses in disease groups outside of the approved indication(s) can prompt innovation that is additive. This is especially true, given that off-label prescriptions classically occur after approved methods are exhausted.

Eculizimab once again provides an illustrative example. As of February 2019, the drug had been used for 39 indications (it had been approved for three of those, by that time), 69 percent of which lacked any form of evidence of real-world effectiveness. Meanwhile, the drug generated nearly $4 billion in sales in 2019. Again, these expenditures may be something for which society chooses to pay—but they are nonetheless additive, rather than substitutive.

Sustaining Versus Disruptive Innovation

Competitive market theory suggests that incumbents and disruptors innovate differently. Incumbents seek sustaining innovations capable of perpetuating their dominance, whereas disruptors pursue innovations capable of redefining traditional business models.

In health care, while disruptive innovations hold the potential to reduce overall health expenditures, often they run counter to the capabilities of market incumbents. For example, telemedicine can deliver care asynchronously, remotely, and virtually, but large-scale brick-and-mortar medical facilities invest enormous capital in the delivery of synchronous, in-house, in-person care (incentivized by facility fees).

The connection between incumbent business models and the innovation pipeline is particularly relevant given that 58 percent of total funding for biomedical research in the US is now derived from private entities, compared with 46 percent a decade prior. It follows that the growing influence of eminent private organizations may favor innovations supporting their market dominance—rather than innovations that are societally optimal.

Incentives And Repercussions Of High-Cost Innovation

Taken together, these observations suggest that innovation in health care is preferentially designed for revenue expansion rather than for cost reduction. While offering incremental improvements in patient outcomes, therefore creating theoretical value for society, these innovations rarely deliver incremental reductions in short- or long-term costs at the health system level.

For example, content-based, performance-enhancing, additive, sustaining innovations tend to add layers of complexity to the health care system—which in turn require additional administration to manage. The net result is employment growth in excess of outcome improvement, leading to productivity losses. This gap leads to continuously increasing overall expenditures in turn passed along to payers and consumers.

Nonetheless, high-cost innovations are incentivized across health care stakeholders (exhibit 2). From the supply side of innovation, for academic researchers, “breakthrough” and “groundbreaking” innovations constitute the basis for career advancement via funding and tenure. This is despite stakeholders’ frequent inability to generalize early successes to become cost-effective in the clinical setting. As previously discussed, the increasing influence of private entities in setting the medical research agenda is also likely to stimulate innovation benefitting single stakeholders rather than the system.

Exhibit 2: Incentives promoting low-value innovation

Source: Authors’ analysis adapted from Hofmann BM. Too much technology. BMJ. 2015 Feb 16.

From the demand side of innovation (providers and health systems), a combined allure (to provide “cutting-edge” patient care), imperative (to leave “no stone unturned” in patient care), and profit-motive (to amplify fee-for-service reimbursements) spur participation in a “technological arms-race.” The status quo thus remains as Clay Christensen has written: “Our major health care institutions…together overshoot the level of care actually needed or used by the vast majority of patients.”

Christensen’s observations have been validated during the COVID-19 epidemic, as treatment of the disease requires predominantly century-old technology. By continually adopting innovation that routinely overshoots the needs of most patients, layer by layer, health care institutions are accruing costs that quickly become the burden of society writ large.

Recommendations To Reduce The Costs Of Health Care Innovation

Henry Aaron wrote in 2002 that “…the forces that have driven up costs are, if anything, intensifying. The staggering fecundity of biomedical research is increasing…[and] always raises expenditures.” With NHEs spiraling ever-higher, urgency to “bend the cost curve” is mounting. Yet, since much biomedical innovation targets the “flat of the [productivity] curve,” alternative forms of innovation are necessary.

The shortcomings in net productivity revealed by the COVID-19 pandemic highlight the urgent need for redesign of health care delivery in this country, and reevaluation of the innovation needed to support it. Specifically, efforts supporting process redesign are critical to promote cost-reducing, substitutive innovations that can inaugurate new and disruptive business models.

Process redesign rarely involves novel gizmos, so much as rejiggering the wiring of, and connections between, existing gadgets. It targets operational changes capable of streamlining workflows, rather than technical advancements that complicate them. As described above, precisely these sorts of “frugal innovations” have led to productivity improvements yielding lower costs in other high-technology industries, such as the computing industry.

Shrank and colleagues recently estimated that nearly one-third of NHEs—almost $1 trillion—were due to preventable waste. Four of the six categories of waste enumerated by the authors—failure in care delivery, failure in care coordination, low-value care, and administrative complexity—represent ripe targets for process innovation, accounting for $610 billion in waste annually, according to Shrank.

Health systems adopting process redesign methods such as continuous improvement and value-based management have exhibited outcome enhancement and expense reduction simultaneously. Internal processes addressed have included supply chain reconfiguration, operational redesign, outlier reconciliation, and resource standardization.

Despite the potential of process innovation, focus on this area (often bundled into “health services” or “quality improvement” research) occupies only a minute fraction of wallet- or mind-share in the biomedical research landscape, accounting for 0.3 percent of research dollars in medicine. This may be due to a variety of barriers beyond minimal funding. One set of barriers is academic, relating to negative perceptions around rigor and a lack of outlets in which to publish quality improvement research. To achieve health care cost containment over the long term, this dimension of innovation must be destigmatized relative to more traditional manners of innovation by the funders and institutions determining the conditions of the research ecosystem.

Another set of barriers is financial: Innovations yielding cost reduction are less “reimbursable” than are innovations fashioned for revenue expansion. This is especially the case in a fee-for-service system where reimbursement is tethered to cost, which creates perverse incentives for health care institutions to overlook cost increases. However, institutions investing in low-cost innovation will be well-positioned in a rapidly approaching future of value-based care—in which the solvency of health care institutions will rely upon their ability to provide economically efficient care.

Innovating For Cost Control Necessitates Frugality Over Novelty

Restraining US NHEs represents a critical step toward health promotion. Innovation for innovation’s sake—that is content-based, incrementally effective, additive, and sustaining—is unlikely to constrain continually expanding NHEs.

In contrast, process innovation offers opportunities to reduce costs while maintaining high standards of patient care. As COVID-19 stress-tests health care systems across the world, the importance of cost control and productivity amplification for patient care has become apparent.

As such, frugality, rather than novelty, may hold the key to health care cost containment. Redesigning the innovation agenda to stem the tide of ever-rising NHEs is an essential strategy to promote widespread access to care—as well as high-value preventive care—in this country. In the words of investors across Silicon Valley: Cost-reducing innovation is no longer a “nice-to-have,” but a “need-to-have” for the future of health and overall well-being this country.

So Do We Need A New Way of Disseminating Scientific Information?  Can Curation Help?

We had high hopes for Science 2.0, in particular the smashing of data and knowledge silos. However the digital age along with 2.0 platforms seemed to excaccerbate this somehow. We still are critically short on analysis!



Old Science 1.0 is still the backbone of all scientific discourse, built on the massive amount of experimental and review literature. However this literature was in analog format, and we moved to a more accesible digital open access format for both publications as well as raw data. However as there was a structure for 1.0, like the Dewey decimal system and indexing, 2.0 made science more accesible and easier to search due to the newer digital formats. Yet both needed an organizing structure; for 1.0 that was the scientific method of data and literature organization with libraries as the indexers. In 2.0 this relied on an army mostly of volunteers who did not have much in the way of incentivization to co-curate and organize the findings and massive literature.



The Intenet and the Web is rapidly adopting a new “Web 3.0” format, with decentralized networks, enhanced virtual experiences, and greater interconnection between people. Here we start the discussion what will the move from Science 2.0, where dissemination of scientific findings was revolutionized and piggybacking on Web 2.0 or social media, to a Science 3.0 format. And what will it involve or what paradigms will be turned upside down?

We have discussed this in other posts such as

Will Web 3.0 Do Away With Science 2.0? Is Science Falling Behind?

and

Curation Methodology – Digital Communication Technology to mitigate Published Information Explosion and Obsolescence in Medicine and Life Sciences

For years the pharmaceutical industry has toyed with the idea of making innovation networks and innovation hubs

It has been the main focus of whole conferences

Tales from the Translational Frontier – Four Unique Approaches to Turning Novel Biology into Investable Innovations @BIOConvention #BIO2018

However it still seems these strategies have not worked

Is it because we did not have an Execution plan? Or we did not understand the lead measures for success?

Other Related Articles on this Open Access Scientific Journal Include:

Old Industrial Revolution Paradigm of Education Needs to End: How Scientific Curation Can Transform Education

Analysis of Utilizing LPBI Group’s Scientific Curation Platform as an Educational Tool: New Paradigm for Student Engagement

Global Alliance for Genomics and Health Issues Guidelines for Data Siloing and Sharing

Multiple Major Scientific Journals Will Fully Adopt Open Access Under Plan S

eScientific Publishing a Case in Point: Evolution of Platform Architecture Methodologies and of Intellectual Property Development (Content Creation by Curation) Business Model 

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Funding Research by Lottery?: How Lucky Do You Feel After Submitting a Grant

Reporter: Stephen J. Williams, Ph.D.

A recent article in Nature: “Science Funders Gamble on Grant Lotteries” discusses an odd twist to the anxiety most researchers feel after submitting grants to an agency.  Now, along with the hours of fretting over details and verbiage in a grant application, it appears that not only great science, but the luck of the draw may be necessary to get your work funded.  The article, by David Adam, discusses the funding strategy of the Health Research Council of New Zealand, which since 2015, has implemented a strategy of awarding grants through random selection.  Although limited in scope and size (mainly these grants are on very highly speculative and potentially transformative research and awards are usually less that $150,000 NZD) was meant to promote the applicants in submitting more risky ideas that are usually submitted in traditional peer reviewed grants.

Random chance will create more openness to ideas that are not in the mainstream

–  Margit Osterloh, economist at University of Zurich

Margit also mentions that many mid-ranking applications which are never funded could benefit from such a lottery system.

The Swiss National Science Foundation (SSFS) is also experimenting with this idea of random selection.  The Health Research Council states the process in not entirely random.  A computer selects the projects at random based on a random number generator.  A panel then decides if they are a reasonably good and well written application.

Some researchers have felt this random process could help eliminate much bias that can be baked into the traditional peer review process.  However there are many who feel the current process of peer review panels are a necessary and rigorous step in the granting process, analyzing applications which would most likely have the best chances to succeed based on the rigor of the proposed science.

However Osterloh feels that the lottery idea produces a humbling effect. As Margit said

If you know you have got a grant or a publication which is selected partly randomly, then you will know very well you are not the king of the Universe

Humility in science: a refreshing idea.  However the lottery idea will not mean that scientists need not prepare a careful and well written application.  Applications that are ranked very low would not be in the lottery.  However, if one feels lucky, maybe the obscene hours of worrying about each sentence written, or that figures for preliminary data should be altered at the 11th hour before submission might be a thing of the past.

Of course if you are a lucky person.

 

 

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On the Folly of Big Science

Author: Larry H. Bernstein, MD, FCAP

Principal, Triplex Medical Science

To the reader:

The very to the point and interesting OP-ED in the Sat, Oct 3, New York Times titled “The Folly of Big Science Awards” by Vinay Prasad is of considerable interest for discussing a problem that goes deeper than the awards.

It is a valid and important points that Dr. Prasad makes that the Dickson, Lasker-DeBakey, Canada Gairdner, Breakthrough and Nobel awards are expending significant resources in support for established investigators at the apex of their careers, that there is always a trailing of leading investigations that have anticipated the awards, and that young investigators are currently squeezed by this structure of scientific endeavor.

In a historical perspective, the tradition of major centers of research is at least 200 years old, and it precedes the Nobel Prize. Notable centers of research in Europe were Cambridge, Copenhagen, Italy, Berlin, and several universities in Germany, from which evolved theoretical and experimental physics,
organic and inorganic chemistry, and this had an impact on the basic science requirements for medical education that came from the Flexner Report, and the establishment of Johns Hopkins University Medical School, and the Rockefeller University.  In the evolution of the medical and supporting scientific disciplines there is a long audit trail of top investigators coming through the laboratories of one or more of the most respected laboratories. This is highlighted in Germany by the Kaiser-Wilhelm Institutes. It is important to emphasize the importance of mentoring to the development of young investigators as well as continued support of their career development. The observation is quite impressive that eighty percent of the funding to basic research goes to one fifth of researchers.

The developments in medicine and in preparatory scientific education and research have for a long time aggregate resources to a small number of highly productive centers. This was in part driven by the ties of these centers to major universities and the review committees that serve NIH funding allocation. In addition, there is also a clustering of major centers of discovery and the instrumentation and technical development industries. A major additional funding comes from a select group of billionaires whose support has been essential beyond the dwindling, politically fragile federal support. The large science awards are for recognition, and they follow the course set by the Nobel Prize. There are also Young Investigator awards that are given by professional organizations.

The idea of breaking down the largest awards perhaps needs consideration. However, the most important consideration is to make adequate funding available to promising investigators irrespective of their university affiliation.  That is also complicated by the fact that funding for research belongs to the institution, and not the investigator. I cite the recent lawsuit won by the Scripps Research Institute in a suit filed by an investigator who was recruited from University of California, San Diego (#16) to the Keck School of Medicine at University of Southern California (#47). The funds could not be transferred. An adjacent problem to that described is how funding is directed to established research, and some good research may be squeezed. Only recently has proteomics and metabolomics opened up after the many years of emphasis in biological research on the genome. This occurred because of better understanding of cell signaling and regulatory pathways.

A different problem is that important discoveries may lead to patents, but the cost of development is a multiple of the cost of the patent. Companies that are dominant in the industry might want to buy the patent, but then they might shelve it because it may compete with another method that has not had its return on investment, or they might try to redesign the method with no significant improvement prior to introduction. This is the way the world works.  The United States has become a leader, and it is also the most wasteful in its success.

Larry H. Bernstein, MD, FCAP

 

 

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Podcast Review: Quiet Innovation Podcast on Obtaining $ for Your Startup

Reporter: Stephen J. Williams, Ph.D.

 

I wanted to highlight an interesting interview (What it Really Takes to Get Money for Your Startup) with David S. Rose, serial entrepreneur and Founder and CEO of Gust.com, which is a global collaboration platform for early stage angel investing, connecting hundreds of thousands of entrepreneurs and investors in over 75 countries. The interview with David and CFA John P. Gavin was broadcast on the podcast Quiet Innovation (from PodCast Addict @Podcast_Addict) from. I had tweeted it out on my Twitter account below (see the http link)

 

… but will include some notes from the podcast here. In addition you can link to the podcast directly using the links below:

QI-013 David Rose Interview_01.mp3

Or download the mp3

http://t.co/XPjLrJQG7O

This post is a followup from yesterday’s post Protecting Your Biotech IP and Market Strategy: Notes from Life Sciences Collaborative 2015 Meeting.

Some highlights from the podcast

  • IDEAS DON’T GET FUNDED

David Rose discusses how there are hundreds of thousands of new ideas, some which are great some which are not… having an idea may be an initial step but for an investor to even consider your idea it is more important to have

  • EXECUTION

This is what David feels is critical to investors, such as himself, to decide whether your idea is investable. A startup needs to show they can accomplish their goal and show at least a rudimentary example of this, whether it is putting up a website or writing up a design blueprint for a new widget. He says starting a business today (either tech or manufacturing) requires a lot less capital than years ago (unless you are starting a biotech). He gives an example of internet startups he had founded in the 90’s versus today… in the 90’s you needed $2 million… today you can do it for $2,000. But the ability to show that you can EXECUTE this plan is CRITICAL.

David sites three aspects which are important to investors:

  1. Integrity – Be humble about yourself. He says there are way too many people who claim ‘our idea is the best’ or ‘we do it better than anyone’ or ‘we are the first to have this idea’. As he says Jeff Bezos of Amazon was not the first to have the idea of selling books over the internet, he just EXECUTED the plan extremely well.
  2. Passion- Investors need to see that you are ‘all in’ and committed. A specific example is angels asking how much money have you put into your idea (skin in the game)
  3. Experience- David says there are TWO important types of experience in developing startups and both valid. The first is how many startups have you done and succeeded and the second is how many startups have failed. He says investors actually like if you have failed because they are learning experiences, just as valuable if not more than having startups always succeed. Investors need to know how you can deal with adversity. All three points goes back to execution.

David Rose gave some reading suggestions as well including

Lucky or Smart? Secrets to an Entrepreneurial Life by Bo Peabody – He highlights this book to help people understand that a startup entrepreneur should always hire someone smarter than themselves.

Derek Sivers post Ideas Are Just a Multiplier of Execution  – where a great idea is worth $20 but a great idea plus execution is worth $20 million.

Eris Reese’s post The Lean Startup in his blog StartUpLessonsLearned – being frugal (gets back to what he said about not needed as much capital as you would think i.e. Don’t Burn Through the Cash) and also get metrics on your startup or idea (as long as you have the IP). He suggests taking out an ad to see what the interest is out there. You can measure the clicks from the ad and use that as a marketing tool to potential investors i.e. Getting Feedback

Some other posts on this site about Investing and Startups include:

Protecting Your Biotech IP and Market Strategy: Notes from Life Sciences Collaborative 2015 Meeting

THE BLOOMBERG INNOVATION INDEX: Country Rankings by Six Measures of the Capacity to Innovate as a Nation

Updated: Investing and Inventing: Is the Tango of Mars and Venus Still on

Sand Hill Angels

The Bioscience Crowdfunding Environment: The Bigger Better VC?

Technion-Cornell Innovation Institute in NYC: Postdocs keep exclusive license to their IP and take a fixed dollar amount of Equity if the researchers create a Spinoff company

Tycho Brahe, where art thou? Today’s Renaissance of the Self-Funded Scientist!

 

 

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Protecting Your Biotech IP and Market Strategy: Notes from Life Sciences Collaborative 2015 Meeting

 

Protecting Your Biotech IP and Market Strategy: Notes from Life Sciences Collaborative 2015 Meeting

Achievement Beyond Regulatory Approval – Design for Commercial Success

philly2nightStephen J. Williams, Ph.D.: Reporter

The Mid-Atlantic group Life Sciences Collaborative, a select group of industry veterans and executives from the pharmaceutical, biotechnology, and medical device sectors whose mission is to increase the success of emerging life sciences businesses in the Mid-Atlantic region through networking, education, training and mentorship, met Tuesday March 3, 2015 at the University of the Sciences in Philadelphia (USP) to discuss post-approval regulatory issues and concerns such as designing strong patent protection, developing strategies for insurance reimbursement, and securing financing for any stage of a business.

The meeting was divided into three panel discussions and keynote speech:

  1. Panel 1: Design for Market Protection– Intellectual Property Strategy Planning
  2. Panel 2: Design for Market Success– Commercial Strategy Planning
  3. Panel 3: Design for Investment– Financing Each Stage
  4. Keynote Speaker: Robert Radie, President & CEO Egalet Corporation

Below are Notes from each PANEL Discussion:

For more information about the Life Sciences Collaborative SEE

Website: http://www.lifesciencescollaborative.org/

Or On Facebook

Or On Twitter @LSCollaborative

Panel 1: Design for Market Protection; Intellectual Property Strategy Planning

Take-home Message: Developing a very strong Intellectual Property (IP) portfolio and strategy for a startup is CRITICALLY IMPORTANT for its long-term success. Potential investors, partners, and acquirers will focus on the strength of a startup’s IP so important to take advantage of the legal services available. Do your DUE DIGILENCE.

Panelists:

John F. Ritter, J.D.., MBA; Director Office Tech. Licensing Princeton University

Cozette McAvoy; Senior Attorney Novartis Oncology Pharma Patents

Ryan O’Donnell; Partner Volpe & Koenig

Panel Moderator: Dipanjan “DJ” Nag, PhD, MBA, CLP, RTTP; President CEO IP Shaktl, LLC

Notes:

Dr. Nag:

  • Sometimes IP can be a double edged sword; e.g. Herbert Boyer with Paul Berg and Stanley Cohen credited with developing recombinant technology but they did not keep the IP strict and opened the door for a biotech revolution (see nice review from Chemical Heritage Foundation).
  • Naked patent licenses are most profitable when try to sell IP

John Ritter: Mr. Ritter gave Princeton University’s perspective on developing and promoting a university-based IP portfolio.

  • 30-40% of Princeton’s IP portfolio is related to life sciences
  • Universities will prefer to seek provisional patent status as a quicker process and allows for publication
  • Princeton will work closely with investigators to walk them through process – Very Important to have support system in place INCLUDING helping investigators and early startups establish a STRONG startup MANAGEMENT TEAM, and making important introductions to and DEVELOPING RELATIONSHIOPS with investors, angels
  • Good to cast a wide net when looking at early development partners like pharma
  • Good example of university which takes active role in developing startups is University of Pennsylvania’s Penn UPstart program.
  • Last 2 years many universities filing patents for startups as a micro-entity

Comment from attendee: Universities are not using enough of their endowments for purpose of startups. Princeton only using $500,00 for accelerator program.

Cozette McAvoy: Mrs. McAvoy talked about monetizing your IP from an industry perspective

  • Industry now is looking at “indirect monetization” of their and others IP portfolio. Indirect monetization refers to unlocking the “indirect value” of intellectual property; for example research tools, processes, which may or may not be related to a tangible product.
  • Good to make a contractual bundle of IP – “days of the $million check is gone”
  • Big companies like big pharma looks to PR (press relation) buzz surrounding new technology, products SO IMPORTANT FOR STARTUP TO FOCUS ON YOUR PR

Ryan O’Donnell: talked about how life science IP has changed especially due to America Invests Act

  • Need to develop a GLOBAL IP strategy so whether drug or device can market in multiple countries
  • Diagnostics and genes not patentable now – Major shift in patent strategy
  • Companies like Unified Patents can protect you against the patent trolls – if patent threatened by patent troll (patent assertion entity) will file a petition with the USPTO (US Patent Office) requesting institution of inter partes review (IPR); this may cost $40,000 BUT WELL WORTH the money – BE PROACTIVE about your patents and IP

Panel 2: Design for Market Success; Commercial Strategy Planning

Take-home Message: Commercial strategy development is defined market facing data, reimbursement strategies and commercial planning that inform labeling requirements, clinical study designs, healthcare economic outcomes and pricing targets. Clarity from payers is extremely important to develop any market strategy. Develop this strategy early and seek advice from payers.

Panelists:

David Blaszczak; Founder, Precipio Health Strategies

Terri Bernacchi, PharmD, MBA; Founder & President Cambria Health Advisory Professionals

Paul Firuta; President US Commercial Operations, NPS Pharma

 

Panel Moderator: Matt Cabrey; Executive Director, Select Greater Philadelphia

 

Notes:

David Blaszczak:

  • Commercial payers are bundling payment: most important to get clarity from these payers
  • Payers are using clinical trials to alter marketing (labeling) so IMPORTANT to BUILD LABEL in early clinical trial phases (phase I or II)
  • When in early phases of small company best now to team or partner with a Medicare or PBM (pharmacy benefit manager) and payers to help develop and spot tier1 and tier 2 companies in their area

Terri Bernacchi:

  • Building relationship with the payer is very important but firms like hers will also look to patients and advocacy groups to see how they respond to a given therapy and decrease the price risk by bundling
  • Value-based contracting with manufacturers can save patient and payer $$
  • As most PBMs formularies are 80% generics goal is how to make money off of generics
  • Patent extension would have greatest impact on price, value

Paul Firuta:

  • NPS Pharma developing a pharmacy benefit program for orphan diseases
  • How you pay depends on mix of Medicare, private payers now
  • Most important change which could affect price is change in compliance regulations

Panel 3: Design for Investment; Financing Each Stage

Take-home Message: VC is a personal relationship so spend time making those relationships. Do your preparation on your value and your market. Look to non-VC avenues: they are out there.

Panelists:

Ting Pau Oei; Managing Director, Easton Capital (NYC)

Manya Deehr; CEO & Founder, Pediva Therapeutics

Sanjoy Dutta, PhD; Assistant VP, Translational Devel. & Intl. Res., Juvenile Diabetes Research Foundation

 

Panel Moderator: Shahram Hejazi, PhD; Venture Partner, BioAdvance

  • In 2000 his experience finding 1st capital was what are your assets; now has changed to value

Notes:

Ting Pau Oei:

  • Your very 1st capital is all about VALUE– so plan where you add value
  • Venture Capital is a PERSONAL RELATIONSHIP
  • 1) you need the management team, 2) be able to communicate effectively                  (Powerpoint, elevator pitch, business plan) and #1 and #2 will get you important 2nd Venture Capital meeting; VC’s don’t decide anything in 1st meeting
  • VC’s don’t normally do a good job of premarket valuation or premarket due diligence but know post market valuation well
  • Best advice: show some phase 2 milestones and VC will knock on your door

Manya Deehr:

  • Investment is more niche oriented so find your niche investors
  • Define your product first and then match the investors
  • Biggest failure she has experienced: companies that go out too early looking for capital

Dr. Dutta: funding from a non-profit patient advocacy group perspective

  • Your First Capital: find alliances which can help you get out of “valley of death
  • Develop a targeted product and patient treatment profile
  • Non-profit groups ask three questions:

1) what is the value to patients (non-profits want to partner)

2) what is your timeline (we can wait longer than VC; for example Cystic Fibrosis Foundation waited long time but got great returns for their patients with Kalydeco™)

3) when can we see return

  • Long-term market projections are the knowledge gaps that startups have (the landscape) and startups don’t have all the competitive intelligence
  • Have a plan B every step of the way

Other posts on this site related to Philadelphia Biotech, Startup Funding, Payer Issues, and Intellectual Property Issues include:

PCCI’s 7th Annual Roundtable “Crowdfunding for Life Sciences: A Bridge Over Troubled Waters?” May 12 2014 Embassy Suites Hotel, Chesterbrook PA 6:00-9:30 PM
The Vibrant Philly Biotech Scene: Focus on KannaLife Sciences and the Discipline and Potential of Pharmacognosy
The Vibrant Philly Biotech Scene: Focus on Computer-Aided Drug Design and Gfree Bio, LLC
The Vibrant Philly Biotech Scene: Focus on Vaccines and Philimmune, LLC
The Bioscience Crowdfunding Environment: The Bigger Better VC?
Foundations as a Funding Source
Venture Capital Funding in the Life Sciences: Phase4 Ventures – A Case Study
10 heart-focused apps & devices are crowdfunding for American Heart Association’s open innovation challenge
Funding, Deals & Partnerships
Medicare Panel Punts on Best Tx for Carotid Plaque
9:15AM–2:00PM, January 27, 2015 – Regulatory & Reimbursement Frameworks for Molecular Testing, LIVE @Silicon Valley 2015 Personalized Medicine World Conference, Mountain View, CA
FDA Commissioner, Dr. Margaret A. Hamburg on HealthCare for 310Million Americans and the Role of Personalized Medicine
Biosimilars: Intellectual Property Creation and Protection by Pioneer and by Biosimilar Manufacturers
Litigation on the Way: Broad Institute Gets Patent on Revolutionary Gene-Editing Method
The Patents for CRISPR, the DNA editing technology as the Biggest Biotech Discovery of the Century

 

 

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11:30AM 11/12/2014 – 10th Annual Personalized Medicine Conference at the Harvard Medical School, Boston

Reporter: Aviva Lev-Ari, PhD, RN

 

REAL TIME Coverage of this Conference by Dr. Aviva Lev-Ari, PhD, RN – Director and Founder of LEADERS in PHARMACEUTICAL BUSINESS INTELLIGENCE, Boston http://pharmaceuticalintelligence.com

11:30 Personalized Medicine Coalition Award &  Award Recipient Speech

Presentation of Personalized Medicine Coalition’s 10th Annual Award for Leadership in Personalized Medicine.

Personalized Medicine Coalition Award Recipient

Mark J. Levin
Co-Founder and Partner
Third Rock Ventures, LLC

Presenter:

Brian Munroe
PMC Founder and Senior Vice President, Government Affairs
Endo

 Award in Science, Business Policy to individual to lead PM – Mark Levin

 

 

  • was at Ely Lilly in the 70s leading supplier of Insulin in the 20s and antibiotics in the 30s,Factor 8, pain drugs, chemotherapy
  • was at Genentech – Human growth Hormone and Human Insulin — both are PM, Interferon,
  • was at Mayfield Ventures
  • was at Millenium, CEO, early 90s, monoclonal antibodies
  • 2000 discussion on the need for PMC
  • Founder of Foundation Medicine – molecular informatics – expands therapeutics and PM
  • NOW — with Third Rock Ventures, LLC

 

Mark Levin – award acceptance speech – Team accomplishments most important

We need to thank the patients participating in Clinical Trials

  1. How I got involved in personalized medicine (PM): High School – Human Biology
  2. Genetics – drive
  3. PM – All diseases – genetic disorders — combination with extreme phenotyping, Muscular Dystrophy – splicing a gene for treatment
  4. Drugability and PM – gene therapy, replace factor, deliver a gene to the brain and the drug. inside CSF
  5. Gene editing – deliver to the Brain correct the gene in the Brain – therapy for ALS, Schizophrenia – understanding the genes involved in this disease, same
  6. Cancer cure – treatment of combination therapies several at the same time vs present time treat one other emerges
  7. cancer vaccine
  8. Sample of blood – proteomics — in Annual Exams at MDs Annual physical
  9. Convergent — comparison of Mutation across to 1000 patient’s mutations
  10. Future is MOST exciting
  11. Challenges of the Future: Biology and Technology, cells in microbiome, 10 million genes, SYSTEM BIOLOGY — will lead the way,
  12. FUNDING SCIENCE via NIH Scientist is the most important National task
  13. Preventative and Prognostics Medicine -need be part of DRUG development
  14. Justification – maximize value for patient vs $$ spent – maximum value – waste and no leadership
  15. Concern — Affordability of Healthcare to All, access to care vs economic Inequality
  16. Leadership and Management: We truly need NATIONAL CONVERSATION — with a Leader with set of goals to solve a problem in certain time
  17. Insurance, Pharma, HMO — budget challenge — attendees inn the room, need to provide leadership at the National Level

 

– See more at: http://personalizedmedicine.partners.org/Education/Personalized-Medicine-Conference/Program.aspx#sthash.qGbGZXXf.dpuf

 

@HarvardPMConf

#PMConf

@SachsAssociates

@VCapitalGuide

@hgbc_harvard

@MassBio

@MALifeSciences

@FierceBiotech

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1st Pitch Life Science- Philadelphia: “Eavesdropping on Investors’ Closed Door Discussions”

Mid Atlantic Bio Angels group (MABA), an angel investor group focused exclusively on new and emerging life science companies hosted a meeting Tuesday, September 16 2014 5:30pm – 8:30pm Other Time Presented by:

 

“Eavesdropping on investors‘ closed door discussions” gives entrepreneurs the inside track on what happens after a start-up company presents to investors.  Typically, after a start up company’s team leaves the room investors have a private discussion about whether the opportunity merits further investigation and possible investment.  1st Pitch Life Science-Philadelphia offers local company presenters and audience participants the chance to listen in on these closed door discussions to learn what really matters to investors.  This event offers excellent networking opportunities for investors, university technology transfer professionals, entrepreneurs, and business professionals in the Philadelphia entrepreneurial ecosystem.   It provides a supportive learning environment for entrepreneurs.

                                                                                                                                                                                                    “

For more information about Mid-Atlantic BioAngels and to make a submission for evaluation of your startup please visit their

website: http://bioangels.net/.

MABA: LinkedIn:
MABA: Twitter

 

Mid-Atlantic Bioangels was formed in 2013 to provide an unmet need in the Mid-Atlantic region for early-stage life-science entrepreneurship,  providing early life science entrepreneurs a venue to  present their companies, obtain funding and provide mentoring, feedback, networking, and information for corporate development.  A great article by  can be found here

http://tech.co/mid-atlantic-bio-angels-life-sciences-investors-2013-06

 

More information on the !st Pitch Life Sciences meetings can be found at www.1stpitchlifescienc.com.  Further information can be obtained at nfo@1stpitchlifescience.com.For sponsorship questions please email Bernie@bioangels.net.

Meeting Coverage

Three companies are to be presented

Hastke Inc is a device company with a best-in-class, real-time 3D visualization technology that can de-risk the drug development process for pharma.  In the future, their technology has the potential to become an important diagnostic tool for physicians.

LytPhage is a new biotech company using novel bioengineering to develop therapeutics to address the worldwide crisis of antibiotic resistant organisms.  They are developing a treatment for vancomycin resistant systemic infections with their platform, which can be adapted for other problematic organisms.

RAbD Biotech uses proprietary computational methods to design biologic agents capable of treating severe diseases.  RAbD’s lead product candidate is a potential first-in-class treatment for ovarian cancer, a disease characterized by late detection, few therapeutic options, and high mortality.

The meeting format includes:

  1. 15-20 minute meeting presentation
  2. group discussion/questions
  3. panel opinions (panel of experienced venture capitalists)

Notes from the meeting will be put in future postings.

Please also see Twitter handles for meeting coverage using the following hashtags and handles

 

hashtags                                                                                                   handles

             #MABA   #lifescience   #PHL   #biotech         #startup                                @BioAngelsGroup   @pharma_BI   @RAbDBiotech

              #VC  #venturecapital   # bioangels    #entrepreneur

              #angelinvestor 

 

The meeting had a live voting on Surveymonkey for each presentation using your smartphone.  The address for the voting was

www.1stpitchlifescience.com/vote

where event participants vote on each individual presentation and a “Best in Show”.

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The Bioscience Crowdfunding Environment: Will Crowdfunding be the Bigger, New VC

Reporter: Stephen J. Williams, Ph.D.

 

Pharmaceutical Consulting Consortium International Inc. (PCCI) recently presented their 7th annual Roundtable “CROWDFUNDING FOR LIFE SCIENCES: A BRIDGE OVER TROUBLED WATERS?”, a panel discussion on how this new funding mechanism applies to early stage life science companies and changes the funding landscape.

A major provision in the recently passed JOBS Act resulted in Securities & Exchange Commission (SEC) rule changes revolutionizing the way companies can raise capital, with some figures in the range of $11 trillion dollars. Companies, startups, and entrepreneurs can, in a manner, now go directly to the individual investor and raise capital. This method is generally referred to as CROWDFUNDING.

As explained by Mark Roderick, moderator for the meeting, there are two main types of approved crowdfunding:

  • Donation-based Crowdfunding – Popularized by the crowdfunding platform Kickstarter, this method of raising capital can accept small donations from anyone for an idea/project to be completed. The donor may either get a free token of appreciation or access to enjoy the fruits of the project, for example, a watching a movie funded by the donor. Some scientific researchers have used Kickstarter as a method to fund their research.
  • Investor-based Crowdfunding– This type of crowdfunding involves the actual transfer of securities, and investors must qualify according to rules set by the SEC and go thru brokers, or portals, like the bioscience and healthcare internet portal Poliwogg.

Investor-based crowdfundingwas discussed at the meeting.  There are five different mechanisms with this type of funding: Title II (Rule 506c), Title II, Title IV, Existing Regulation A, and Rule 504. The main focus of the meeting was on Title II as, according to Mr. Roderick, involves the mechanism most suited for biotech startups, while rules for Title III still need to be finalized.

Title II crowdfunding requires that “accredited” or “qualified” investors (those who make at least $200,000/year or net worth $1 million US) go through licensed dealer internet nodes (or Portals) like Poliwog. The Portal will have lists of startups they deem legitimate which investors can choose from. For instance the Epilepsy Foundation uses Poliwog to fund certain projects.

The panelists discussed matters including:

  • How crowdfunding is different than other mechanisms like venture capital
  • What are the regulations and financial responsibilities for both biotech and crowdfunder
  • Liabilities
  • Due-diligence issues

The panelists included:

  1. Mark Roderick, moderator. Mark is an attorney at Flaster/Greenberg PC (@CrowdfundAttny on Twitter) and has developed great experience and expertise in the details of crowdfunding. He maintains a Crowdfunding blog www.crowdfundattny.com, which contains information and links about the JOBS Act and crowdfunding.
  2. Barbara Schiberg, Managing Director at BioAdvance, a Mid-Atlantic bioangel investment community.
  3. Samuel Wertheimer, PhD, CIO Poliwogg, a crowdfunding internet portal.
  4. Darrick Mix, Partner, Duane Morris LLP, corporate lawyer with experience in the JOBS act
  5. Donlon Skerret, PCCI President and CEO of NanoScan Imaging and serial entrepreneur

The Opportunity

 

 crowdcrowdingoutVC

 

 

 

 

 

 

 

 

 

 

 

 

Recent estimates place Title II Crowdfunding capacity to $1 Trillion.

Venture Capital (VC) had estimated only $5 Billion bio-investment in 2013.

Where does the rest go?

 

Mr. Skerret noted that bioangels can only take you so far but thinks that crowdfunding may fill this “valley of death”.

Liabilities

 

Crowdfunding is SELLING SECURITIESso there is liability, disclosure and nondisclosure issues.

Title II contains 580 pages of regulations and SEC needs a licensed intermediary.

 

Due-Diligence

 

Barbara Schiberg also noted that with VCs or bioangels groups you also get s support network, basically their rolodex of contacts and KOL’s and experts. With Crowdfunding like Poliwog they just handle linking investors with entrepreneur. Any contact is done through social media and the crowd.

 

BioAdvance hires experts – may take months to years to get expert opinion

 

Poliwog only has responsibility to investor to make sure company is legitimate. They don’t do extensive due diligence like bioangels. Most crowdfunding do not have extensive networks of professionals.

 

 

To obtain a video recording of this meeting and get more information please go to PCCI’s web site at http://www.rxpcci.com/meetings.htm.

 

Other posts on this site related to FUNDING and Bio Investing include:

 

PCCI’s 7th Annual Roundtable “Crowdfunding for Life Sciences: A Bridge Over Troubled Waters?” May 12 2014 Embassy Suites Hotel, Chesterbrook PA 6:00-9:30 PM

10 heart-focused apps & devices are crowdfunding for American Heart Association’s open innovation challenge

Importance of Funding Replication Studies: NIH on Credibility of Basic Biomedical Studies

Partnerships & Funding

Updated: Investing and Inventing: Is the Tango of Mars and Venus Still on

Transforming Biotech & Pharma: LinkedIn is the Quiet Force by Timmerman

Technion-Cornell Innovation Institute in NYC: Postdocs keep exclusive license to their IP and take a fixed dollar amount of Equity if the researchers create a Spinoff company

 

 

 

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PCCI’s 7th Annual Roundtable “Crowdfunding for Life Sciences: A Bridge Over Troubled Waters?”

Reporter: Stephen J. Williams, Ph.D.

 

http://www.rxpcci.com/meetings.htm

Monday, May 12 2014 Embassy Suites Hotel, Chesterbrook PA 6:00 -9:30 PM

Pharmaceutical Consulting Consortium International Inc. presents their 7th annual Roundtable on Crowdfunding for the Life Sciences and how this funding mechanism applies to early stage life science companies and changes the funding landscape. The conference will examine the types of crowdfunding out there and attempts to answer many questions including:

  • Which one is right for which new companies at which stage of the funding process?
  • And how will choosing the right or wrong one influence follow-on funders and funding rounds?
  • Will the advent of crowdfunding speed up the investment process?
  • Will it really bridge the yawning “valley of death”?

The panel is made up of notables and practitioners who will be called upon to deal with the pros and cons of crowdfunding in real life and let them discuss how all this is likely to apply to life science entrepreneurs and investors.

The panel includes:

  1. Mark Roderick, Attorney Flaster/Greenberg PC (Moderator)
  2. Valerie Gaydos, President, Capital Growth (represents angel/venture community)
  3. Samuel Wertheimer, Chief Investment Officer, Poliwogg Darrick Mix
  4. Duane Morris, LLP (journalist who covers crowdfunding

Register by clicking on www.rxpcci.com and following directions The event will be webcast.

Leaders in Pharmaceutical Business Intelligence had recently launched a new, real-time based methodology for meeting coverage using social media as a platform to foster discussion and commentary.

This methodology is described in the following post REAL TIME Cancer Conference Coverage: A Novel Methodology for Authentic Reporting on Presentations and Discussions launched via Twitter.com @ The 2nd ANNUAL Sachs Cancer Bio Partnering & Investment Forum in Drug Development, 19th March 2014 • New York Academy of Sciences • USA

This new method was successfully used and curated at the 2nd Annual Sachs Cancer Bio Partnering &Investment Forum at the New York Academy of Sciences and will be featured at the forthcoming Sachs Global Conferences in 2014 and 2015.

Related articles on this site include:

conceived: NEW Definition for Co-Curation in Medical Research

Cancer Biology and Genomics for Disease Diagnosis, Volume One Pre-ePub Announcement

Volatile Organic Compounds (VOCs) as Biomarkers in Cancer Detection: • Alnion Ranked #1 in “Top 10 Israeli medical advances to watch in 2014”.

Investing and inventing: Is the Tango of Mars and Venus Still on

SACHS Associates, London – Planning Forthcoming Conferences: 2014 – 2015

 

 

 

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