First-time academic entrepreneurs face a circular problem: while they’re continually sought after by VCs and pharmas seeking the next “big thing”, they also face an arduous path to establish their bona fides - not for their scientific prowess, but for their ability to turn their findings into products for patients.
The situation builds up a self-fulfilling circle of haves and have-nots, leaving much high value innovation untapped.
Industry continues to lean heavily on academia for innovations to fuel company and VC portfolios.
BioCentury’s analysis of early stage company formation finds that preclinical and Phase I biotechs that raised a seed or series A round in 2018 skewed heavily toward academia: three quarters of the 138 companies were spun out of an academic institution or built in part from academic IP.
But the six entrepreneurs who spoke with BioCentury said it’s largely an insider’s game. Breaking into biotech is an uphill battle, they said, without the right connections to start with.
More and more, VCs are looking for a network of industry veterans who can guide the company formation process and help founders create and execute a viable business plan -- skills that academics themselves don't bring.
“At the end of the day, starting pharmaceutical companies or biotechs for drug discovery or major advancements require executives that know what they’re doing. So if you’re going to get venture capital money, I would suggest don’t do it yourself,” said Tony Kouzarides, a professor of cell biology at the University of Cambridge and a co-founder of RNA epigenetics company Storm Therapeutics Ltd., antibody reagent company Abcam plc and cancer play Chroma Therapeutics Ltd.
“If you're going to get venture capital money, I would suggest don't do it yourself.”
The result is a cycle that continues to reinforce innovation coming out of the top universities and the two dominant biotech hubs - Boston and the San Francisco Bay Area. Cambridge, U.K. is making a play to be