pharma-biotech startup ecosystem apr 2013
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TABLEOFCONTENTS
ExecutiveSummary,3
Introduction,4
Stakeholders,5AcademicResearchInstitutions,6
IncubatorsandTechnologyParks,7
StartupandLongerTermFunding,7
StartupPharma/BiotechCompanies,8
BioscienceNetworkingGroups,9
TradeOrganizations,10
ScientificandTechnicalExpertCommunity,10
ContractResearchOrganizations,11
EstablishedPharmaceuticalandBiotechnologyCompanies,12
StateandLocalGovernments,13RequirementsforaSuccessfulIntegratedStartupEcosystem,14
ElementsofaRegionalLifeSciencesEcosystem,14
InitialAssessmentofStrengths,Weaknesses,OpportunitiesandThreats15
FromIdeastoProducts:AComplexandHigh-RiskProcess,16
PathForward,17
ProposedNextSteps,17
Acknowledgements,18
AbouttheAuthor,19
_________________________
Copyright2010,2013byThorirD.Bjornsson
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EXECUTIVESUMMARY
TheGreaterPhiladelphiaregionhasbeenhometomanylarge,well-knownandsuccessful
pharmaceuticalcompanies,andsomeofthelargestglobalpharmaceuticalcompanies
haveR&Dfacilitiesinthearea.However,theregionhasnotenjoyedproportionate
successinthepharma/biotech1startupandsmallbusinessarena.Theobjectivesofthis
paperaretocollectkeyrelevantinformationaboutregionalactivities;toidentifykey
stakeholders;toassesskeyrelevantstrengthsandweaknesses;andtodevelopanoutline
ofnextstepstofurtheradvanceavibrantandinnovativepharma/biotechstartupand
smallbusinesshub.
Tenstakeholderclustersareidentifiedanddiscussed,involvingAcademicResearch
Institutions;IncubatorsandTechnologyParks;StartupandLongerTermFunding;Startup
BioscienceCompanies;BioscienceNetworkingGroups;TradeOrganizations;Scientificand
TechnicalExpertCommunity;ContractResearchOrganizations;Established
PharmaceuticalandBiotechnologyCompanies;andStateandLocalGovernments.Abriefdescriptionisprovidedforeachclusterandarepresentativelistofmembersisprovided
foreachcluster.Suchclusteringofstakeholderswillservetobetterenableexplorationof
anintegratedregionallifesciencesecosystemdesign.
Anassessmentoftherelevantstrengths,weaknesses,opportunitiesandthreatsrevealed
keystrengthsasbeingoutstandingacademicresearchinstitutions;thepresenceofmany
largepharmaceuticalandbiotechnologycompanies;largehighlyeducatedand
experiencedworkforce;andseveralincubatorfacilities.Keyweaknesses,however,
includedthecurrentlowstandingoftheregioninthepharma/biotechstartupandsmall
businessarena;lackofaunifiedvoiceandpresence;limitedinteractionsand
communicationamongstthedifferentstakeholders;andlimitedstartupandventure
capitalfunding.Anoutlineofproposednextstepstoadvanceasuccessful,integrated,
creative,vibrantandgrowingpharma/biotechecosystemforGreaterPhiladelphiais
provided.
TheGreaterPhiladelphiaregionhasverysignificantstrengths,whichwhenleveragedina
coordinatedandintegratedmanner,coupledwithacomprehensiveteamworkinvolving
allstakeholders,promisetoenabletheregiontobecomealeaderinthepharma/biotech
startupandsmallbusinessarena,aplacewhereitneedstobeanddeservestobe.
1Notethatthispaperusesthetermspharma/biotech,biosciences,andlifesciencessomewhat
interchangeably,generallyreferringtosmallmolecules,biopharmaceuticals,diagnostics,devicesand
imaging.
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INTRODUCTION
TheGreaterPhiladelphia2regionhasbeenhometomanylarge,well-knownand
successfulpharmaceuticalcompanies,andsomeofthelargestglobalpharmaceutical
companieshaveR&Dfacilitiesinthearea.Infact,thelifesciencessectorhasbeen
responsibleforcreatingoneoutofeverysixjobsintheregionandgenerates15percentofalleconomicactivity.TheMilkenInstituteReportonTheGreaterPhiladelphiaLife
SciencesCluster2009rankedtheregionin2ndplacenationallyintheoverallcomposite
score,butrankeditin9thplaceinthesmallbusinessvitalityindex.Clearly,thepresenceof
thebigpharmaceuticalcompaniesintheareaishavingamajorpositiveeconomicimpact,
buttheregiondoesnotappeartobeenjoyingproportionatesuccessinthestartuparena.
Overthelastonetotwodecadesthepharmaceuticalindustryhasbeenexperiencing
increasinglysignificantchallenges.Theseinclude:inconsistentproductivitybasedonthe
numberofannualNDA/BLAapprovalsbytheFDA;increasingR&Dexpenditures;
increasingpatent/exclusivityexpirations;erodingrevenuesofmarketeddrugsduetogenericlaunches;increasingpercentageoftotalprescriptionsfromgenerics;andnotthe
leastattrition:ofallcompoundsenteringdevelopmentbetween90%and95%fail.This
hasledtoanincreasinginterestbythelargepharmaceuticalcompaniesinsecuring
innovativeproductsdiscoveredanddevelopedbysmallpharma/biotechcompaniesto
complementtheirownpipelines,andinpartneringwithacademicresearchinstitutions.
Thekeyobjectivesofthispaperon"APharma/BiotechStartupEcosystemforGreater
Philadelphia"areasfollows:
1. Tocollectkeyrelevantinformationaboutwhatsgoingonintheregioninthesmallpharma/biotechbusinessspace.Whilethereisnosinglesourceorwebsiteprovidinganall-inclusiveoverviewofthelifesciencesbusinessesintheregion,thetwomost
informativewebsitesarethoseofSelectGreaterPhiladelphiaandPennsylvaniaBIO.
2. Toidentifythekeyentitiesandstakeholdersinvolvedinthepharma/biotechstartupactivitiesintheregion,andhowthesecanbegroupedtogethertobetterunderstand
howtheymightbeoptimallyintegratedtoformavibrantandgrowingecosystem.This
willbefollowedbyanassessmentofkeystrengths,weaknesses,opportunitiesand
threats.
3. Todevelopanoutlineofproposednextstepstoenhancetheregionspresenceandcapabilitiesinthegeneralpharma/biotechstartupandsmallbusinessarena.
Aswasindicatedabove,theGreaterPhiladelphiaregionhaswaystogofromwhereitis
today,andthechallengesandimplicationsfortheregionaremorelikelytoincreasethan
decreaseinthecomingyears,unlessthereisanactiveintervention.
2TheGreaterPhiladelphiaregionconsistsof5countiesinPennsylvania(Philadelphia,Bucks,Montgomery,
DelawareandChester),5countiesinNewJersey(Mercer,Burlington,Camden,GloucesterandSalem)and1
countyinDelaware(NewCastle).
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STAKEHOLDERS
Astakeholderisdefinedasaperson,group,ororganizationthathasdirectorindirect
stakeinanorganizationbecauseitcanaffectorbeaffectedbytheorganization'sactions,
objectives,andpolicies.3Thus,alistingofallrelevantstakeholdersinAPharma/Biotech
StartupEcosystemforGreaterPhiladelphiacouldbeverylongindeed;however,keystakeholderscanbemeaningfullygroupedintotenclusters,asisdepictedinFigure1.One
couldarguethatthereshouldbemoreclusters,orfewer,eventhattheseshouldbe
nameddifferently.Forthepurposesofthispaper,however,webelievethesetenclusters
serveasagoodfoundation.
Figure1.ClustersofStakeholdersinaPharma/BiotechStartup
EcosystemforGreaterPhiladelphia.
Abriefdescriptionwillbeprovidedforeachclusterandwhatmembersarerepresentedin
thatcluster.Notethatthelistofmembersinagivenclusterisnotintendedtobe
exhaustiveorcomplete;rather,itisintendedtoprovideameaningfulrepresentativelist
toenableexplorationofaregionallifesciencesecosystemdesign.Manyofthecluster
memberswillhaveahyperlinktotheirwebsiteprovidingdetailedinformation.
3BusinessDirectory,2007
ACADEMIC'
RESEARCH'
INSTITUTIONS
STARTUP'&'
LONGER3TERM
FUNDING'
INCUBATORS'&
TECHNOLOGY'
PARKS
SCIENTIFIC'&'
TECHNICAL'
COMMUNITY
CONTRACT'
RESEARCH'
ORGANIZATIONS
STATE'&
'LOCAL'
GOVERNMENTS'
STARTUP'
BIOSCIENCE'
COMPANIES
TRADE'
ASSOCIATIONS
PHARMA/
BIOTECH'
COMPANIES
BIOSCIENCE
NETWORKING'
GROUPS
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AcademicResearchInstitutions
Philadelphiahassomeoftheoldestuniversities,medicalschools,pharmacyschools,
medicalresearchinstitutes,andhospitalsinthecountry:UniversityofPennsylvania,oneof
thefirstuniversitiesinthenation(foundedin1740),itsSchoolofMedicine,thenations
firstmedicalschool(foundedin1765);PennsylvaniaHospital,thenationsfirsthospital(foundedin1751);JeffersonMedicalCollege(foundedin1824,nowpartofThomas
JeffersonUniversity);UniversityoftheSciencesinPhiladelphia,thefirstschoolofpharmacy
inthenation(foundedin1821asPhiladelphiaCollegeofPharmacy);DrexelUniversity
CollegeofMedicine(formedfromHahnemannMedicalCollegeandWomansMedical
CollegeofPennsylvania,establishedin1848and1850,respectively);TempleUniversity
(tracesitsbeginningto1884);theChildrensHospitalofPhiladelphia,thenationsfirst
childrenshospital(foundedin1855);theWistarInstitute,thefirstindependentmedical
researchinstitute(foundedin1892);andtheFoxChaseCancerCenter,thenationsfirst
cancerhospital(foundedin1904).NewJerseyishometotheprestigiousPrinceton
University,oneofthetoprankeduniversitiesintheworld(foundedin1746astheCollegeofNewJersey;renamedin1896),andDelawareishometotheUniversityofDelaware,one
ofthenationsoldestinstitutionsofhigherlearning(tracesitsrootsto1743).
UniversityofPennsylvania DrexelUniversity ThomasJeffersonUniversity TempleUniversity UniversityoftheSciencesinPhiladelphia PrincetonUniversity UniversityofDelaware ChildrensHospitalofPhiladelphia FoxChaseCancerCenter WistarInstitute
Theseandotheracademicandmedicalresearchinstitutionsintheregionshouldarguably
formthebackboneofavibrantpharma/biotechstartupecosystem,providingcutting-
edgeresearch,newknowledge,andfuturemanpower.Eachoftheseacademicresearch
institutionshasitsowntechnologytransferfunction,servingtheinstitutionandits
faculty;ithasbeensuggestedtheircurrentpracticesareinneedofupdating.Manyof
theseinstitutionshavecourseandseminarofferingsrelevanttodrugdiscoveryand
developmentandentrepreneurship,andcontinuingeducation.Whiletherelationshipbetweenfederalbiomedicalresearchfundingandentrepreneurialactivityisnot
straightforward,contributionsbytheregionsacademicresearchinstitutionsto
pharma/biotechstartupinitiatives,whilelimitedinthepast,appeartobeincreasing.
OPPORTUNITIES:Imagineiftheseacademicresearchinstitutionsbandedtogethertodevelop
anintegratedandcoordinatedlinktotheregionspharma/biotechstartupcommunity.
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IncubatorsandTechnologyParks
TheGreaterPhiladelphiaregionhasseveralincubatorsprovidingtemporaryfacilitiesand
supportforlifesciencesstartupsandsmallbusinessesduringtheirinitialphases.These
includetheUniversityCityScienceCenterinPhiladelphia,thenationsoldestandlargest
urbanincubator(establishedin1963);theLankenauInstituteforMedicalResearchinWynnewood(foundedin1927);PennsylvaniaBiotechnologyCenterandPennsylvania
DrugDiscoveryInstituteinDoylestown,BucksCounty;theNanotechnologyInstituteat
TheNavyYardinPhiladelphia;therecentlyestablishedUPstartProgramattheUniversity
ofPennsylvania;andtheInnovationCenterinUwchlan,ChesterCounty.InDelaware
therearetheDelawareTechnologyParkandtheDelawareBiotechnologyInstitute,New
CastleCounty;andNewJerseysCommissiononScienceandTechnologylistsseveral
incubators,somewithintheGreaterPhiladelphiaregion.
UniversityCityScienceCenter
LankenauInstituteforMedicalResearch PennsylvaniaBiotechnologyCenter PennsylvaniaDrugDiscoveryInstitute NanotechnologyInstitute UPstartatUniversityofPennsylvania InnovationCenteratEagleview DelawareTechnologyPark DelawareBiotechnologyInstitute StateofNewJerseyCommissiononScienceandTechnology
Incubatorsandtechnologyparksarecriticalforprovidingthenecessarysupportforstartupcompanies,providinglaboratoryspace,officesandsharedspace,andgeneral
administrativesupportandadvice.MostoftheincubatorsinPennsylvaniaareinKeystone
InnovationZones,whichprovideimportanttaxadvantagesforstartupentities.These
incubatorseachhavetheiruniquehistoryandmission,andtheyhavedeveloped
innovativeprogramstoaidandattractnewstartup,e.g.,theScienceCentersQED
Program,UPstartsuniqueservices,andtheNanotechnologyInstitutesNanotechnology
ApplicationFund.Theredontappeartobesignificantcollaborativeorcoordinating
effortsbetweentheregionallifesciencesincubators.
OPPORTUNITIES:Imagineiftheregionsincubatorsdevelopedjointprogramsforsharing
resources,bestpractices,andexpertise,andfortrainingoflaboratorypersonnel.
StartupandLongerTermFunding
Whileinitialfundingneedsforstartupcompaniesmayvarygreatlydependingonavariety
offactors,e.g.,stageofdevelopmentandcapitalequipmentneeds,soonerorlatermost
willrequireconsiderablecapitaltosustainthemselvesduringthefirstfewyears.
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SelectGreaterPhiladelphiaprovidesalistofinvestmentandfundingsourcesintheir
GreaterPhiladelphiaLifeSciencesGuide,includingventurecapital,angelinvestors,
commercialandinvestmentbanks,seedfunds,andstateandfederalprograms.Offederal
fundingprograms,thebetterknownincludeSmallBusinessInnovationResearch(SBIR)
grants,aswellasNIHandNSFgrants;moreinformationisprovidedbyInnovation
Partnership.TwoPennsylvaniastate-sponsoredfundsare:
BenFranklinTechnologyPartners/SEP BioAdvance
Thekeytraditionalconnectioninastartupsituationinvolvestheone-on-onerelationship
betweentheentrepreneurandthefunder.However,tofacilitateandsustainan
expandingandvibrantregionalstartupecosystem,greaterintegrationinvolvingmore
stakeholderswillhavetoplayamoresignificantrole.Clearly,theriskoffailureof
individualstartupsisveryreal,consideringthatmany,ifnotmost,startupsareessentially
engagedinhigh-riskexploratorydiscoveryresearch.Also,anyregionalpharma/biotechecosystemiscompetingwiththoseinotherregions,eachwiththeirownuniquestrengths
andcharacteristics.Together,thesepointssuggestthattheregionshouldtakeadvantage
ofwhatthedifferentregionalstakeholderclustershavetooffertooptimizeforstartups
successesintermsofprojects,productsandprocesses.Whileithasbeensuggestedby
somethataccesstocapitalfortheregionsstartupshasbeenlimitedandperhaps
decreasingothershavecounteredthatthetrulyinnovativeandpromisingstartupswill
typicallygetfunded.
OPPORTUNITIES:Imagineifbiosciencestartupentrepreneurshadaccesstoadedicated
resourceforassessinginitialfundingneedsandguidanceregardingfunding.
StartupPharma/BiotechCompanies
ThereisasignificantnumberoflifesciencesstartupandsmallcompaniesintheGreater
Philadelphiaregion,mostinthepharma/biotechareas,othersindiagnostics,devicesor
bioimaging.AnumberofthesearelistedintheLifeSciencesGuideofSelectGreater
PhiladelphiaandtheMembershipDirectoryofPennsylvaniaBIO,althoughitisworth
notingisthatthereisnotasingleup-to-datelistingoftheregionsbiosciencestartup
companies,orwhatspecificscientificormedicalcategoriestheybelongin,e.g.,by
therapeuticareasorplatforms.Tenrandomlyselectedregionalbiosciencestartupsare:
GalleonPharmaceuticals MeliorDiscovery QRPharma Tengion NuPathe Morphotek
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VitaePharmaceuticals Treventis Immunome MadrigalPharmaceuticals
StartupentrepreneursintheGreaterPhiladelphialifesciencessectorcomefromvariousbackgrounds.Somecomefrombigormediumsizepharmaceuticalcompanies,someare
serialentrepreneurs,andafewcomeoutofacademia.Whilemostofthefounderscome
fromwithinthisgeneralregion,afewcomefromoutsidetheregion.Inorderto
significantlystrengthenandexpandthelifesciencessmallbusinesssectorintheGreater
Philadelphiaregion,itwillbeimportanttobetterunderstandthechallengesandissues
theseentrepreneurshavefaced,andwheretheydecidedtolocate.Aquickinformal
surveyoftheregionssmalllifesciencescompaniesdoessuggestthatthereisgreater
heterogeneityandfewerconnectionsamongthesecompaniesthanthoseinthethree
majorbiotechhubsinthecountry,i.e.,Boston/Cambridge,SanFranciscoBayArea,and
SanDiego/LaJollaArea.Also,thereappeartobelimitedconnectionsbetweenthisregionslifesciencescompaniesandtheacademicresearchinstitutions.Bothofthese
factorshavebeenshowntobeimportantcharacteristicsofthethreemajorbiotechhubs
inthecountry.4
OPPORTUNITIES:Imagineiftherewereoptimalmechanismsforfacilitatingconnectionsand
communicationbetweenstartupentrepreneursandacademicresearchinvestigators.
BioscienceNetworkingGroups
Thereareafewregionalbiosciencenetworkinggroups,mostnotablythePharmaceutical
ConsultingConsortiumInternational(PCCI),theGreaterPhiladelphiaSeniorExecutive
Groups(GPSEG)LifeSciencesSubgroup,andBiostrategyPartners.Eachofthesehasits
ownobjectivesandmission,e.g.,PCCIiscenteredaroundmonthlypresentationsby
individualstartupcompaniesandtheGPSEGsLifeSciencesSubgrouphostsaseriesof
meetingaddressingspecifictopics.Others,suchasBiostrategyPartners,offerconsulting
services,lecturesandcoursesontopicsrelevanttostartingnewbiosciencecompanies.
TheScienceCentersQuorumprogramofferspresentationsandnetworking
opportunities,andthePennsylvaniaBIOsponsorspresentationsandpaneldiscussions.
PharmaceuticalConsultingConsortiumInternational GPSEGLifeSciencesSubgroup BiostrategyPartners UniversityCityScienceCentersQuorum
PennsylvaniaBIOSponsoredEvents
4Forexample,WhittingtonK,Owen-SmithJ,PowellWW.Networks,PropinquityandInnovationin
Knowledge-intensiveIndustries.AdministrativeScienceQuarterly,March2009,pp.90-122
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Inadditiontothesenetworkinggroups,therearenumerousopportunitiestoattend
lectures,workshopsandcoursesonavarietyoftopicsrelatedtoscientificandmedical
innovations,atthedifferentuniversitiesandacademicresearchinstitutions.The
challenge,however,hasbeenthatuntilrecentlytherehasntbeenacentralized
mechanismtobekeptawareofwhatisavailable,althoughthishaschangedwiththe
recentimplementationofBasecampBusiness,whichisapromisingevent/calendarlistingtool.
OPPORTUNITIES:Imagineifthedifferentregionsnetworkinggroupscollectivelyreevaluated
theirapproachesanddevelopedjointprogramsforsharingresourcesandexpertise.
TradeOrganizations
EachofthethreestateshavingcountiesinGreaterPhiladelphiahasabiosciencestrade
associationthatfocusesonpromotingthatstatesbioscienceindustry,servingasapublic
policyleaderandpublicadvocateforthebiosciencecommunity,andservingasacatalystfordevelopingacohesivebiotechnologycommunity.
PennsylvaniaBIO BIONJ DelawareBIO
Thesebiosciencetradeassociationsprovidegreatopportunitiesfordevelopingvitallinks
betweenthedifferentpharma/biotechstakeholders,largeandsmall,throughforumsfor
workshopsandconferences,facilitatingthedevelopmentofstrategicpartnershipsamong
stateandregionalpharmaceuticalcompanies,biotechnologycompanies,medicaldevice
companiesandresearchinstitutions.Theseorganizationshavethepotentialtoplaya
criticallyproactiveroleindevelopingagrowingregionalpharma/biotechstartup
ecosystem.
OPPORTUNITIES:Imaginetheimpactthesetradeorganizationscouldmakebyproactively
fosteringthedevelopmentofpharma/biotechstakeholderclusters.
ScientificandTechnicalExpertCommunity
TheGreaterPhiladelphiaregionhasarichpooloftalentforallofthefunctionsneededfor
afullyintegratedpharmaceuticalorbiotechnologycompany,fromtechnicalexpertstomid-levelandseniorlevelexecutives.Table1belowprovidesalistoftypicalfunctionsina
fullyintegratedlargepharma/biotechcompany;thislistisnotexhaustive.
Consideringthenumberoflayoffsinthepharma/biotechsectoroverthepastseveral
yearsinthisregionduetoreduction-in-forceand/ormergersandacquisitions,thereisa
sizeablepoolofhighlyeducatedandexperiencedtechnicalexpertsandmid-leveland
seniorlevelexecutiveswhoareinterestedinparticipatingindifferentwaystosupport
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Table1.TypicalFunctionsinaFullyIntegratedLargePharma/BiotechCompany.
MedicinalChemistry Biostatistics InVitroandInVivoPreclinicalEfficacy MedicalAffairs Pharmacology HealthOutcomes
DrugSafetyandToxicology
BusinessDevelopment DrugMetabolism/Metabolites IntellectualPropertyandPatentLaw TranslationalResearch RegulatoryAffairs Pharmaceutics/Formulations PharmaceuticalLaw EarlyClinicalDevelopment Chemistry,ManufacturingandControls ClinicalPharmacology SalesandMarketing Pharmacokinetics/Pharmacodynamics ProjectManagement LateStageClinicalDevelopment VaccineDevelopment ClinicalDrugSafetyandEpidemiology Manufacturing
GreaterPhiladelphiaspharma/biotechstartupecosystem.Whilemanyofthese
individualshavefoundnewjobs,inthisarea,commutingtoothercities,ormovedoutof
thearea,manyarestillunderemployedorintemporaryjobs.Thus,thistalentpool
representsanuntappedsourceofneededexpertiseindrugdiscoveryanddevelopment
forgrowingapharma/biotechstartupecosystem.
OPPORTUNITIES:Imagineiftherewasawell-organizedlistingofregionalconsultanciesand
experts,sortedbyexpertiseareas,neededforavibrantlifesciencesstartupecosystem.
ContractResearchOrganizations
Contractresearchorganizations(CROs)areincreasinglyperformingmanyofthenon-
clinicalandclinicalactivitiesthathavetraditionallybeendoneinternallybyfullyintegratedpharmaceuticalcompanies.SelectGreaterPhiladelphiaprovidesalistof
regionalCROsintheirGreaterPhiladelphiaLifeSciencesGuide,coveringbothnon-clinical
andclinicalCROs.Examplesofresearchactivitiesthatcanbeoutsourcedtothese
organizationsincludethoselistedinTable2below:
Table2.ResearchActivitiesOfferedbyContractResearchOrganizations.
TargetIdentificationandValidation BiomarkerServices PreclinicalDiscoveryResearch ClinicalResearch PreclinicalDrugSafetyandToxicology DevelopmentPlans DrugMetabolism DataManagement PharmaceuticsandFormulations RegulatoryAffairs AnalyticalServices MedicalWriting ProjectManagement Manufacturing
InadditiontothesemoreconventionalresearchareashandledbyCROs,recentlyformed
specializedmedicinalchemistryentities,specificallyMoulderCenterforDrugDiscovery
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ResearchatTempleUniversityandTheChemistryResearchSolution(TCRS)inBristol,
BucksCounty,areprovidingneededresourcesfornewcompanies.
MoulderCenterforDrugDiscoveryResearch TheChemistryResearchSolutionApotentialwayforstartuplifesciencescompaniestogainsignificantlygreaterefficiency
andspeed,andthusgettingfastertoago/no-godecisionpointregardingproof-of-
conceptorleadcompound,istoincreasetheinvolvementofCROsinperformingactivities
theyarebestat.Itsinthisgeneralareawheretechnologyparkscanhaveamajorimpact
byhousingdedicatedsupportlaboratoriesforpreclinicalwork.LifesciencesCROsinAsia,
particularlyinmedicinalchemistry,discovery,andpreclinicalsafetyandtoxicology,are
alsolikelytobeincreasinglyusedbypharma/biotechstartupsandsmallbusinesses,as
partofthegeneralglobalizationacrossotherindustries.
OPPORTUNITIES:Imagineiftherewasawell-organizedup-to-datelistingofallrelevantsupportfunctionsforpharma/biotechstartupcompaniesintheregion.
EstablishedPharmaceuticalandBiotechnologyCompanies
SevenofthetenlargestglobalpharmaceuticalcompanieshaveR&Dfacilitiesinthe
GreaterPhiladelphiaregion5,i.e.,GlaxoSmithKline,Merck,Pfizer,Johnson&Johnson,
AstraZeneca,Bristol-MyersSquibbandSanofi-Aventis.Therearealsoafewmid-size
companies,e.g.,Cephalon,EndoPharmaceuticals,ShireandNovoNordisk,withR&D
facilitieshere.
AstraZeneca
Bristol-MyersSquibb
Cephalon
EndoPharmaceuticals
GlaxoSmithKline
Johnson&Johnson
Merck
NovoNordisk
Pfizer
Sanofi-Aventis
Shire
Ashasbeenmentionedabove,largepharmaceuticalcompaniesarelikelytobe
increasinglydependentonaconstantsupplyofinnovativeproductsdiscoveredand
developedbystartupsandsmallcompaniestosupplementtheirpipelines.Thepresence
5InPennsylvania:GlaxoSmithKline,Merck,Pfizer,Johnson&Johnson,Sanofi-Aventis,Cephalon,Endo
Pharmaceutical,Shire;inNewJersey:Bristol-MyersSquibb,NovoNordisk;inDelaware:AstraZeneca.
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ofthelargetomediumsizepharmaceuticalcompaniesintheregionrepresentsgreat
potentialopportunitiesforconnectionsandcollaboration.
OPPORTUNITIES:Imagineiftheselocallybasedlargetomediumsizepharmaceutical
companiesactivelyparticipatedandcontributedtothestakeholderclusters.
StateandLocalGovernments
Ultimately,thethreestatesformingtheGreaterPhiladelphiaregionhavethemostat
stakeinseeingathrivingandgrowinglifesciencessectorintheregion.Eachofthesehas
itseconomicdevelopmentoffices.
CommonwealthofPennsylvania StateofNewJersey StateofDelawareInordertohaveatrulymeaningfulimpactonsignificantlygrowingtheGreater
Philadelphiaslifesciencesstartupsector,thethreestateswillneedtoplayamore
proactivecollaborativerolethantheyhaveinrecentyears.
OPPORTUNITIES:Imagineifthethreestatesdevelopedacomprehensiveactionplanforthe
regiontightlyconnectedtolocalactivitiesinvolvingthestakeholderclusters.
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REQUIREMENTSFORASUCCESSFULINTEGRATEDSTARTUPECOSYSTEM
ElementsofaRegionalLifeSciencesEcosystem
Anecosystem,asusedhere,isdefinedasadynamicandcomplexsysteminvolvingthe
interactionsbetweenacommunityofinterconnectedstakeholdersonwhomtheircombinedoptimumsuccessdependsdirectlyorindirectly.Consideringthetenclustersof
stakeholdersdiscussedabove,whichformtheregionslifesciencesecosystem,thereisa
greatnumberofpotentialconnectionsamongsttheseclusters,asisdepictedinFigure2,
althoughsomeofthesewillbestrongerdependingonthespecificobjectivesofeach
interaction.
Figure2.OpportunitiesfromIntegrationofInterconnectedClusters
ofStakeholders.
Inadditiontothebenefitsoffosteringandbuildingtheconnectionsbetweenindividual
clusters,onealsoneedstoconsiderthebenefitsofinteractionswithinanygivencluster.
Infact,insomecircumstances,thesemayinfactbeequallyimportantasthosebetween
clusters.Alloftheseconnections,betweenandwithinstakeholderclusters,needtobe
consideredfortheirleveragingimpactonmaintainingandgrowingthepharma/biotech
startupecosystem.
ACADEMIC'
RESEARCH'
INSTITUTIONS
PHARMA/
BIOTECH''
COMPANIES
STATE'&
'LOCAL'
GOVERNMENTS'
SCIENTIFIC'&'
TECHNICAL'
COMMUNITY
CONTRACT'
RESEARCH'
ORGANIZATIONS
'TRADE'
ASSOCIATIONS
BIOSCIENCE
NETWORKING'
GROUPS
STARTUP
BIOSCIENCE'
COMPANIES
STARTUP'&'
LONGER;TERM
FUNDING'
INCUBATORS'&
TECHNOLOGY'
PARKS
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InitialAssessmentofStrengths,Weaknesses,OpportunitiesandThreats
WhiletheGreaterPhiladelphiaregionhasamajorpresenceinthepharmaceuticalsector,whichislargelyduetothepresenceofseverallargecompanies,theregionislagging
behindinstartupandsmallbusinessactivityinthissector.Consideringthemanyand
diversechallengesfacingthepharmaceuticalindustrytodayandthecurrenteconomicslowdown,coupledwithanincreasingdependenceofthelargerpharmaceutical
companiesoninnovativeproductsdiscoveredanddevelopedbystartupsorsmall
businesses,thisrepresentsaconcern,andanopportunity,fortheregion'sfuture.
Whilethereareanumberofimpressiveindividualeffortstodevelopastrongpharma/biotechstartuppresenceintheregion,theseappeartohavebeenisolated,
independenteffortsthathavenotsystematicallyleveragedallthepotentialsynergiesof
thecollectivestakeholdersintheregion.
Thelifesciencesstartupandsmallbusinessesintheregionappeartobemoreheterogeneousandtohavefewerconnectionsamongthemselvesandwiththeregionsacademicresearchinstitutionsthanisobservedinthethreemajorbiotechhubsinthe
country.Althoughwearenotawareofanypublishedresearch,onewouldexpectsuch
characteristicsofalifescienceshubtobepotentiallyassociatedwithlesscutting-edge
andinnovativeresearchthanitotherwisecouldbe.
Perhapsthemostimportantimpressionisthattheredoesntappeartobeacohesiveandwell-connectedcommunityofstakeholders.Infact,theredoesappeartobealackofa
unifiedcenterofgravitytobringtheGreaterPhiladelphiaregiontotheleadership
positioninthelifesciencessectoritneedsanddeserves.
Anassessmentofthestrengths,weaknesses,opportunitiesandthreatswithrespecttoamajorregionalpharma/biotechstartupecosystemisshowninFigure3.
Figure3.SWOTAssessmentofGreaterPhiladelphiaRegionsLifeSciencesEcosystem.
STRENGTHS
Outstanding1Academic1Research1Ins9tu9ons
Many1Large1Pharma/Biotech1Companies1
Highly1Educated/Experienced1Workforce
Several1Incubator1Facili9es
OPPORTUNITIES
Integrated1"HardWired"1Community1of1Stakeholders
Integra9on1of1Scien9fic1and1Technical1Experts
Revised1Technology1Transfer1Prac9ces
Educa9on1and1(Re)Training1of1Workforce
THREATS
Ongoing1Large1Pharma/Biotech1Challenges
Unchanged1Incen9ve1Mechanisms1in1Academe
Limited1Progress1from1Genomics1Revolu9on
Limited1State1and1Federal1Involvement
WEAKNESSES
Low1Standing1in1Small1Business1Vitality1Index
Lack1of1Unified1Voice1and1Presence
Limited1Intera9ons1Amongst1Stakeholders
Limited1Startup1and1Venture1Capital1Funding
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FromIdeastoProducts:AComplexandHigh-RiskProcess
Drugdiscoveryanddevelopmentisanexceptionallycomplicatedandhigh-risk
proposition,requiringnumerousdisciplinesandfunctionscollaboratingandproviding
theirexpertiseforasuccessfuloutcome.ThefivelargechevronsinFigure4depictan
outlineofthisprocess,whichtypicallytakes10-15years,startingwithanideainvolvingaspecifictargetandaspecificintendedindicationonthefrontend,andendingwitha
submissionofamarketingapplicationtoregulatoryauthoritiesontheotherend.The
largefullyintegratedpharmaceuticalcompanieshavedevelopedhighlyintegratedand
efficientprocessestomanagedrugcandidatesthroughthisprocess,withappropriate
expertcross-functionalteamsresponsiblefordifferentpartsoftheprocessandguidelines
forgo/no-gocriteriaatthedifferentmilestones.
Thereisalotapharma/biotechstartupecosystemcanlearnfromthewaysuccessful,fully
integratedlargepharmaceuticalcompanieshavemanagedthisoverallprocessinthemost
costeffectivemanner.Atthesametime,thereisalsoalotlargepharmaceuticalcompaniescanlearnfromthewaypharma/biotechstartupandsmallcompaniesoperate,
beingmoreagileandlessbureaucratic,applyingmorecutting-edgescience,andmore
willingtoexperimentwithinnovativebusinessmodels.Itisthroughacoordinated
integrationoftheappropriatestakeholderclustersthattheGreaterPhiladelphiaregion
canbesuccessful.Interestingly,itisthiskindofanintegration,requiringathoughtfuland
deliberatedialogue,wheretheGreaterPhiladelphiaregionhasoftenexcelled.
Figure 4. Process map of the drug discovery and development process (large
chevrons),alsoshowingwherethedifferentstakeholderclusterscaninteract.
Exploratory*
DiscoveryTargets
Genomics
Networks
Full*
DiscoveryChemistry
Efficacy
Indica8on
Preclinical*
DevelopmentDrug;Metabolism
Drug;Safety
Pharmaceu8cs
Early*Clinical*
DevelopmentBiomarkers
Transla8on
Learning
Late*Stage*
DevelopmentClinical;Trials
Registra8on
Confirming
Academic*Research*Ins?tu?ons
Incubators*and*Technology*Parks
Bioscience*Trade*Organiza?ons
Scien?fic*and*Technical*Expert*Commuinty
State*and*Local*Governments
Bioscience*Networking*Groups
Startup*and*Longer*Term*Funding*Mechanisms
Contract*Research*Organiza?ons
PRODUCTSIDEAS
Startup*Bioscience*Companies Established*Pharma/Biotech*Companies
IND NDA/BLA
PROJECTS PROCESSES
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PATHFORWARD
Basedontheanalysispresentedinthispaper,theoverarchingconclusionisthatall
relevantstakeholdersneedtoaddresstogether,withasenseofurgency,howbestto
advanceavibrantandgrowingpharma/biotechstartupecosystemfortheGreater
Philadelphiaregion.Consideringthecurrenthighattritionratefordevelopmentcompounds,aswellasforstartupcompanies,oneobviousconclusionisthatmuchgreater
interactionisneededbythedifferentstakeholderstooptimizeforthesuccessofregional
pharma/biotechstartupandsmallcompanies.Intheconsiderableliteratureavailable
aboutthehistoryandsuccessfactorsofthemajorbiotechhubsinthecountry,one
characteristicisthattheyhavemorehard-wirednetworks,whichhavefostered
continuinggrowthandsurvival.Thisisthereforeoneofthekeyissuethatneedtobe
addressed.
Onthepositiveside,theregionhasmost,ifnotall,ofthecollectiveexpertiseneededto
makethiswork.Thisincludesallthedifferentstakeholderclustersthathavebeendiscussedabove.Anotherpositivefactorinvolvesthegreatinterestandsupportbythe
regionsbiosciencesleadership,aswitnessedbyimportantconferencesheldduringthe
pastyear,e.g.,theBioPharmaConferenceatWestChesterUniversity(May2012)and
PCCIs5thAnnualRoundtableonfederalsupportforlifesciences(June2012),aswellasby
theissuanceofareportonLifeSciencesLeadershipfortheNextDecadebythe
CommonwealthofPennsylvaniasLifeScienceLeadershipAdvisoryCouncil(May2012).
Furthermore,thereareseveralexamplesofgreatactivitiesandinitiatives,suchasthose
sponsoredbytheScienceCenter,PCCI,andUPstart,tonameonlythree.
Itisthereforenotunreasonabletoaskwhatsneededthatisntalreadybeingdone?In
short,whatsmissing,ashasbeendiscussedabove,istheintegrationofthedifferent
stakeholderstocollectivelyfosterandsupportonabroadbasistheregions
pharma/biotechstartupecosystem,togetittoaplacewhereitneedstobeanddeserves
tobe.Thiswillrequiremuchgreaterandcloserinteractionsamongthedifferent
stakeholdersthanappearstohavebeenthecase.Andnote,thiswillnothappenonits
ownproactiveinvolvementisrequired.
ProposedNextSteps
Belowisalistofproposednextstepsandactivities.Someofthesehavebeenhintedatas
opportunitiesforeachofthestakeholderclusters.Thislistisbynomeansexhaustive,norisitinaprioritizedorder,ratheritismeanttoserveasanexampleofwhatcanbe
envisionedasadevelopmentalpathforahighlysuccessful,integrated,creative,and
growingpharma/biotechecosysteminGreaterPhiladelphia:
Formaninitialworkinggroupofapproximately10-15interestedindividualsrepresentingdifferentstakeholderclusterstodevelopageneralactionplan.
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Guidethecreationofindividualclustersofstakeholders,andfosterthedevelopmentofasharedunderstandingofthebenefitsofworkingtogether.
Developaworkscopedocument,withstakeholderbuy-in,includingspecificgoalsandobjectives,andidentifyspecificworkgroupsthatmayneedtobeformed.
Developasetofmetricsbywhichtomonitorprogresstowardsdefinedgoalsandobjectivesandatimetableforachievingthese.
Createacoalitionofclustersofstakeholderswhosemissionitistoadvanceavibrantandgrowingecosystemforpharma/biotechstartupsandsmallbusinessesinGreater
Philadelphia.
Exploreinasystematicmannerthehiddenpotentialsynergiesintheconnectionsbetweenandwithinthestakeholderclusters,e.g.,academicresearchinstitutions
harmonizingbestpracticesanddevelopingjointworkshops.
Formanetworkofthescientificandtechnicalexpertcommunitywithextensiveexperienceandexpertiseindrugdiscoveryanddevelopment,andestablishmechanismstoconnectthesewiththepharma/biotechecosystem.
Conductselectedworkshopsandtaskforces,includingparticipationinprecompetitivecollaborativeefforts,aimedataddressingkeyopportunitiesandchallengesfacingthe
biopharmaceuticalindustryandthescientificcommunity,whichstartupscantake
advantageof.
ACKNOWLEDGEMENTS
Workingdraftsofthefirstversionofthispaper(December2010),wereinitiallyforwardedtoaboutseventycolleaguesandfriendsduringthelatterhalfof2010,representingmost
ofthestakeholderclustersdiscussedinthispaper.Anumberofveryvaluableand
insightfulcommentsweregenerouslyoffered,whichhelpedmakingthepaper
significantlybetter,andIamforeverindebtedtoallofthesecolleaguesandfriends.This
revisedandeditedversion(April2013),addressesafewomissions,e.g.,addingatenth
shareholdercluster,BioscienceNetworkingGroups,addingafewmemberstosomeofthe
stakeholderclusters,andstreamliningtheproposednextsteps.
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ABOUTTHEAUTHOR
Dr.ThorirD.Bjornssonhasheldpositionsbothinacademiaandindustry,theformerat
DukeUniversityMedicalCenterandJeffersonMedicalCollege(totaling18years),the
latteratBristol-MyersSquibbandWyeth(totaling13years).AtJeffersonMedicalCollege,
Dr.Bjornsonheldanendowedchair,SamuelM.V.HamiltonFamilyProfessorofMedicine,ProfessorofPharmacology,andDirectoroftheDivisionofClinicalPharmacology.At
Bristol-MyersSquibbandWyeth,heheldthepositionofVicePresidentandledglobal
earlyclinicaldevelopmentandclinicalpharmacology,acrossalltherapeuticareas,for
bothsmallmoleculesandbiopharmaceuticals.Subsequently,heworkedwiththeCritical
PathInstitute(2years),andatthepresenttimeheisPresidentofanewnonprofit,
TherapeuticsResearchInstitute.Dr.Bjornssonreceivedhisclinicalpharmacologytraining
atStanfordUniversityMedicalCenter.Dr.Bjornssonhaslednumerouscross-functional
andcross-organizationalinitiatives,aimedatorganizationalandprocessimprovements,
andoptimizingscientificandprecompetitivecollaboration.Hehasreceivednumerous
awardsforhiswork,andhasbeenanactivememberonseveralprofessionalsocietycommitteesandreviewcommitteesaswellasindustryprofessionalorganizations.Hehas
authoredorco-authoredapproximately230papers,abstracts,andbookchapters.
AddressCommentsTo:
ThorirD.Bjornsson,MD,PhD
539St.DavidsAve.
SaintDavids,PA19087
Phone:610-688-8911
Mobile:610-733-0763
Email:thorir.bjornsson@verizon.net
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