Leading Molecules from Bench to Bedside in Academic World

Manu Nair - Mayo Clinic Ventures

July 26, 2012

Introduction: Mayo Clinic/Mayo Clinic Introduction: Mayo Clinic/Mayo Clinic VenturesVentures

Mayo Clinic:◦ Leader in healthcare◦ Established in 1889 in Rochester, Minnesota◦ >55,000 employees serving over a million patients/year◦ Annual revenue >$8 Billion◦ Annual research funding ~ $800 Million

Mayo Clinic Ventures (“MCV”):◦ IP/Tech Commercialization arm of Mayo◦ Manages a seed fund of $2Million◦ Manages a venture capital fund of $35Million◦ Receives/reviews >300 new ideas/inventions each year◦ Has a portfolio of ~1300 issued patents ◦ Generates revenues >$30 Million◦ Several success stories

Academic Tech Transfer in USAcademic Tech Transfer in US

Began with the Bayh-Dole Act of 1980 US leads in IP/technology transfer from academia to

industry Goal: To advance technologies through public-private

partnerships Govt. funded research does not meet its objective until

it fosters creativity and adds to economic development Other developed countries (Japan, most of Europe,

Canada, Australia etc.) have followed the US model Indian version: “The Utilization of Public Funded IP” Bill

Economic impact of US academic Tech Economic impact of US academic Tech TransferTransfer

reported by BIO in reported by BIO in 20092009

Technology Transfer functionsTechnology Transfer functions IP identification & evaluation Patent filing and prosecution Technology development

◦ Seed capital funding◦ Sponsored research solicitation and management◦ Developing new collaborations

Commercialization:◦ Marketing & Licensing◦ Contract, drafting, negotiations & management◦ New company formation◦ Investment solicitation and management

Compliance management IP enforcement Portfolio rationalization

3 Key Goals: 3 Key Goals: Revenue Generation, Revenue Generation, Technology Utilization and Research Technology Utilization and Research

AdvancementAdvancement

Healthcare technologies in Tech Healthcare technologies in Tech TransferTransfer

Therapeutics (includes vaccines) Diagnostics (includes predictors and prognostics) Devices Software (Healthcare IT) Clinical Know-How Biospecimens Research reagents

* Forbes 2012* Forbes 2012

Inadequate Govt. funding for translational research High regulatory burden (unless qualifies for “Orphan”

indication) Long and costly development path Tough patent landscape & high cost of prosecution Cost of IP enforcement Difficulty in early-stage licensing/partnering

◦ High failure rate & resulting risk aversion of industry◦ Differences in perceived value

Change in venture capital investment landscape Developing a therapeutic could cost up to $1Bill*

Challenges in developing therapeuticsChallenges in developing therapeutics

Stages of drug development: Stages of drug development: Small Small moleculesmolecules

Target discoveryTarget validationTarget characterization -structure studies -functional studies -reagents/assays

Assay developmentHTSComputer modelingHit identificationEfficacyExploratory toxicityExploratory PKScaffoldingMedicinal chemistry

Medicinal chemistrySARImprove potencyEfficacyExploratory toxicityExploratory PK

Scale-upAPI productionAnalytical methodsFormulationGLP toxicologyPK/ADMEEfficacy studiesIND filing

Phase IPhase IIPhase III

Target Discovery &

Validation

Lead Discovery

Lead Optimization

Pre-Clinical Development

Clinical Development

Target discoveryTarget validationTarget characterization -structure studies -functional studies -reagents/assays

Assay developmentEfficacyExploratory toxicityExploratory PK

EfficacyExploratory toxicityExploratory PK

Scale-upAPI productionAnalytical methodsFormulationGLP toxicologyPK/ADMEEfficacy studiesIND filing

Phase IPhase IIPhase III

Target Discovery &

Validation

Lead Discovery

Lead Optimization

Pre-Clinical Development

Clinical Development

Stages of drug development: Stages of drug development: BiologicsBiologics

Risks in developing small Risks in developing small molecule drugsmolecule drugs

From: PhRMA, 2008

Funding Sources : Public & Private Funding Sources : Public & Private

Target Discovery &

Validation

Lead Discovery

Lead Optimization

Pre-Clinical Development

Clinical Development

Industry sponsored research and investor capital

NIH funding, philanthropy and foundations

Funding Gap: Creates a “no-win” Funding Gap: Creates a “no-win” situationsituation Funding Gap or Valley of Death:

o Govt. mostly funds basic research & technology may have passed that stage

o Still too risky for private sector to pick it up (has not advanced enough)

From: The PDMA ToolBook for New Product Development

Valley of Death for therapeutics: Valley of Death for therapeutics: ComponentsComponents

Early stage gap: Between first cell line/animal data and development of lead molecule candidate: ◦ Patent costs◦ Optimization of compound & Lead compound selection◦ Formulation and dosing studies◦ Pharmacokinetics/Pharmacodynamics studies (including

toxicology)◦ Pre-IND meeting with the FDA◦ Conservative cost estimate: $300K-$500K

Mid-stage gap: Pre-IND meeting to IND submission◦ Additional patent costs◦ Additional toxicology studies (if needed)◦ IND preparation (including regulatory consulting fees)◦ GMP manufacturing of drug◦ Phase I trial◦ Conservative cost estimate: $1Million – $3Million

Valley of Death: Components (Cont’d)Valley of Death: Components (Cont’d)

Late-stage gap: Phase II and III trials◦ Complex multi-center trials required◦ Very expensive: Could cost several hundred million

dollars (depending on disease indication)◦ Easier to fill this gap: partnering with

investors/industry is easier at this stage◦ Goal is to advance technologies to partnering

Investment adds exponential valueInvestment adds exponential value

From: VP of Translational Research, MD Anderson Cancer From: VP of Translational Research, MD Anderson Cancer Center Center

This is older data; included only to show the exponential nature of value increase

Today’s values are higher because of increase in development costs.

How do successful tech commercialization How do successful tech commercialization operations achieve this goal?operations achieve this goal?

Many research institutions have launched seed funds to bridge these gaps. Models include funds:◦ Managed by institution◦ Managed by investors◦ Combination models

Starting companies, instead of trying for early stage licensing, to advance the technology◦ Companies can attract investment dollars and for-profit

translational grant funds

“Cannot do all”: Focus on core competencies and outsource the rest to collaborators who are willing to share risks for future revenue streams

Criteria for evaluating Criteria for evaluating technologies technologies

Primary evaluation

Proponent / PIStage of

development IPTarget validationFeasibilityBiologic / small

molecule

Secondary evaluation

MarketCompetitionFeedback Advantages

Bridging the gap with Mayo Bridging the gap with Mayo fundingfunding

Innovation Loan Program (“ILP”)◦ 5% of royalty income directed to fund◦ Funds utilized to generate data that increase value

of the technology◦ Low administrative burden and rapid funding

decisions◦ Equivalent to seed funding – high risk, high reward ◦ $200,000 per project

President’s Discovery Translation Program (“DTP”)◦ Applications peer reviewed by a committee ◦ Typically 2 cycles per year funding 4 – 8 awards◦ $300K-$500K per award◦ To be competitive, technology must be translational

Case Study: Gene therapy for Case Study: Gene therapy for glaucomaglaucoma

Invested ILP funds of $150K Invested $250K from DTP Identified a company (Oxford Biomedica) as a

collaboratorOxB has a proprietary gene delivery technologyFocused efforts to generate data from money

committed by Mayo It offered clear opportunity to partner with an

industry collaborator for patient benefitMoving to Phase I trialValue of technology before and after investing

$400K: ◦ Before: less than $3Million◦ After: >$15Million

What is the “Mayo way”?What is the “Mayo way”?

Seed capital funds managed by MCVThoroughly evaluate the opportunities to investPartner with industry at the earliest opportunityCo-invest venture capital fund with large VCs to

provide larger investments Leverage Mayo’s large clinical capabilities

Questions?Questions?

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