Food for Thought: The Challenges of Investing in Science-Based Innovation

What are the rules of investing in science-based innovation? How much long-term thinking does it take to get through tightened markets and economic downturns? These questions are at the core of Vicki L. Sato´s research, who is a Professor of Management Practice in the Technology and Operations Management unit at Harvard Business School. In addition, she is also an advisor to Atlas Venture´s life sciences team.

In her view, smart science-based businesses regard today´s economic difficulties as an opportunity to boost their research and innovation for long-term competitive advantage. However, she cautions, different situations require different business decisions and investing in R&D is not always the key to success. The right approach, Sato argues, is to evaluate innovation management challenges from various  perspectives, such as corporate strategy, organizational design, decision-making, and resource allocation. This is even more important as key investment metrics, which are  measuring a company´s past and current financial performance, will not suffice as a stand-alone parameter in determining future success. Even though this is not a new observation and Sato admits that “the rules haven´t been written yet in this field of study”, the faculty research focuses on best practices and cases studies and may therefore come up with insightful and valuable concepts on investing in science-based businesses. We are looking forward to any future updates!

Source: Harvard Business School Working Knowledge, June 1, 2009. Author: Julia Hanna

Food for Thought: Lessons from a Start-up Nation

Start-up Nation” by Dan Senor and Saul Singer addresses the trillion-dollar question: How is it that a country of a mere 7.1 million people has per capita venture capital investments 2.5 times greater than in the US (more than 30 times greater than in Europe), the highest density of high tech start-ups in the world (1 for every 1,844 inhabitant) and more companies listed at NASDAQ than all companies from the entire European continent?

The book is about Israel, and while much can be attributed to the extraordinary history of the country and its hostile environment, other factors such as a culture of leadership, risk management and  “can do” attitude are at least equally important . “When an Israeli entrepreneur has a business idea,” the authors state, “he will start it that week.”

The book points out that while clusters of excellence with tight proximity to great universities, large corporations and start-ups (as well as to suppliers, an engineering talent pool and venture capital) are important, this is not enough. In Israel, a typical high tech start-up receives about 10 times more seed funding than in Europe although the turnover rate of start-ups is much shorter and faster, even compared to US standards. In addition, as compared to Korea, Singapore, China and even to the EU and US, the country has a culture of constantly challenging authorities and wide-held beliefs and of team orientation and networking.

And while macro-economic factors can only be altered slowly, cultural attitudes can be changed more easily on a coporate and personal level, and this is why the book makes an inspiring reading.

Company News: MediGene Sells Full European Rights for Eligard® to Astellas for EUR 25 Million and Ongoing Royalties

MediGene AG (Frankfurt, Prime Standard, MDG, TecDAX) has announced the sale of full European marketing and distribution rights to Eligard® (leuprolide acetate, for the treatment of hormone-dependent prostate cancer) to Astellas Pharma Europe Ltd. (London, “Astellas”), previously MediGene’s European marketing partner for Eligard®. Astellas will make one-off payments totalling EUR 25 million, while MediGene remains entitled to royalties. There will be no further costs to MediGene. The sales price reflects the full NPV of all future Eligard® revenues while allowing MediGene to benefit from continued Eligard® growth. For more information, please see the full press release.

Company News: Micromet’s BiTE Antibodies Overcome Cancer Cell Resistance

In several clinical trials, antibody company Micromet has demonstrated outstanding efficacy and safety of its bispecific BiTE antibodies which come with two binding sites: one for a cancer target and a second one for a T cell. As a result, T cells are recruited and guided directly to the tumor cell, initiating cancer cell death in a serial fashion.

In this week’s PNAS, researchers of the company demonstrate that the BiTE antibodies also can overcome the notorious resistance against conventional monoclonal antibodies arising in many cancer patients.

The researchers converted the anti-EGFR antibodies cetuximab (Erbitux) and panitumumab (Vectibix) into BiTE antibodies by adding the binding site for T cells. In animal models, these BiTE antibodies then showed a remarkably high potency (in the sub-picomolar range) against cancer cells with KRAS and BRAF-mutations which made them resistant to the original monoclonal antibodies.

According to the authors, “the present study shows that conversion of EGFR-specific monoclonal antibodies cetuximab and panitumumab into T cell-engaging BiTE antibodies is technically feasible and that the BiTE technology can overcome resistance of KRAS- and BRAF- mutated CRC lines to the therapeutically used parental antibodies. The simplest explanation for the latter is that T cell-engaging BiTE antibodies do not rely on inhibition of EGFR signaling but use the receptor tyrosine kinase as mere surface anchor for attachment of cytotoxic T cells. This function of BiTE antibodies is not expected to be affected by mutations of downstream components of the EGFR pathway that obviate the cancer cell’s dependence on the EGFR surface receptor for delivery of growth-promoting signaling.”

If this holds up in clinical trials, it is not only good news for patients with resistance to conventional cancer antibodies already on the market, but it will also provide an opportunity for a whole range of new cooperations with pharma companies for product enhancement and life cycle management.

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