Grant funding for biotech-academia collaborations

1. Grant funding for biotech-academia collaborations April 23, 2019

2. My career path • PhD Rockefeller University (1988) • Post-doc Mount Sinai • Post-doc UCSF • Research Assistant Professor UCDavis • Galileo Pharmaceuticals (1999) • L2 Diagnostics (since 2002)

3. L2 Diagnostics • A rarer type of biotech business model • Started in 1998 by the Section of Rheumatology at Yale, as a diagnostics testing company focused on Lyme disease and lupus • R&D branch now much larger than the diagnostic reference lab. 15-employees, 3,500 sq. ft. facility • Focused on (very early) pre-clinical research on a wide variety of topics • Mostly grant-funded

4. L2 Diagnostics – Research areas • Infectious diseases • Diagnostics: Tickborne diseases, Pseudomonas, Zika virus, Kawasaki disease,… • Vaccines: Tickborne diseases, mosquito-borne diseases, Leishmania, malaria, … • Anti-infectives: Tuberculosis, S. aureus, Pseudomonas, dengue virus • Cancer • Hepatocellular carcinoma • Breast • Glioma • Inflammation • Anti-MIF compounds • Diagnostics • Chemical-triggered asthma, response to radiotherapy, biomarkers of autoimmune attacks

5. L2 Diagnostics – Grant funding • Most grant funding mechanisms are open to for-profit businesses • (Surprisingly) sustainable STTR/SBIR ONLY

6. A primer on small-business grants (1) • SBIR • 2.5% of extramural research budget for agencies with a budget >$100M • PI must be with small business concern. No need for academic partner • Small business concern must accomplish 50-100% of the work • STTR • 0.3% of extramural research budget for agencies with a budget >$1B • PI can be with small business concern or with academic partner • Academic partner(s) must accomplish 40-60% of the work

7. A primer on small-business grants (2) • Phase I: 1 (or 2) year - $225K-300K per year total costs • Phase II: 2 (or 3) years - $1-3M total costs • Funds are split according to work proposed, within mandated guidelines • (Usually) reviewed by specialized study sections. Review criteria are (meant to be) the same as for academic grants • Success rate: 20% for Phase I, 40% for Phase II. Only about 10% of Phase I progress to Phase II • Must have a product as a final product. Market can be a small one • No dilution of equity. No reach-through provision for intellectual property

8. L2 Diagnostics – Grant funding STTR/SBIR ONLY

9. Grant-funding in biotech • Impact on culture (publications, conferences) • Impact on scientific activity • Agility • NIH is much less controlling than VC • Grants can fund efforts peripheral or preliminary to main focus (e.g. Sanaria) • Need to be on cutting edge • Need not address a large market • Impact on lifestyle • Time spent writing • Salaries

10. No, we are not unique Ambergen, Inc. Watertown MA

11. Biotech-Academia collaboration • Collaboration, as opposed to licensing and running with it • This process has consequences on multiple fronts • Type and scope of projects • Funding considerations – Role of small-business grants • A meeting of cultures

12. Collaborating in the “valley of death” • Reproducibility • Breadth of applicability (animal models, bacterial strains, human populations) • Scaling up • Production / stability issues • Cost • Toxicity • False positive / False negative rates

13. Biotech-academia collaborations: a meeting of cultures • All collaborations involve a loss of control Communication Expectations TRUST