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Innovation and Global BioBusiness

Gurinder Shahi, MD, PhD, MPH March 14, 2008. Innovation and Global BioBusiness. The best way to predict the future is to invent it. Alan Kay. Strategic Overview. Technology Innovation Introduction to BioBusiness and BioInnovation Adoption of Technology Innovation

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Innovation and Global BioBusiness

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  1. Gurinder Shahi, MD, PhD, MPH March 14, 2008 Innovation and Global BioBusiness

  2. The best way to predict the future is to invent it.Alan Kay

  3. Strategic Overview • Technology Innovation • Introduction to BioBusiness and BioInnovation • Adoption of Technology Innovation • Technology Assessment (and Economic Considerations)

  4. Technology Innovation There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle Albert Einstein

  5. Directions in Science and Technology in the 21st Century "There are three great themes in science in the twentieth century - the atom, the computer and the gene." - Harold Varmus, Former NIH Director What are the great themes for the 21st century? Proposed: • Integration of our knowledge base incorporating the atom, the computer and the gene (in the context of solving problems and generating value-added solutions) • Translational Research and Technology Innovation • Synergistic Partnerships and Alliances – across disciplinary, regional and international boundaries • Value and Wealth Creation through Entrepreneurship and Enterprise Development Source: Gurinder Shahi, Osaka Innovation (2004)

  6. Some Definitions of Interest Innovation • The process whereby ideas for new (or improved) products, processes or services are developed and brought to use. Technology: • The application of scientific advances to benefit humanity • Application of knowledge to develop tools, materials, techniques, and systems to help people meet and fulfil their needs (including those for survival, comfort level, and quality of life). • Human innovation in action that involves the generation of knowledge and processes to develop systems that solve problems and extend human capabilities.

  7. Understanding the BioBusiness Innovation and Commercialization Pipeline responding to market realities Increasing Value Proposition Decreasing Execution Risk Focus on management and business development Focus on science and technology Concept Technology Validation “Productization” Commercial Product and Service Devt Business Case Validation Market Entry and Rapid Growth Research (new insights and understanding) Development (translation of insights to practical reality) Application (commercial and social application) Source: Shahi, 2004

  8. Drivers of Technology Innovation Market-Driven Innovation • well-defined market opportunities • gaps and unmet needs in the marketplace Technology-Driven Innovation • availability of appropriate technologies • availability of skilled personnel with appropriate knowledge and understanding Point to consider: The existence of investors and communities of interest who are prepared to invest time and effort can potentially help accelerate the innovation development process

  9. Introduction to BioBusiness and BioInnovation Discovery is seeing what everybody else has seen, and thinking what nobody else has thought. Albert Szent-Gyorgi

  10. About BioBusiness Definition Commercial activity based on an understanding of life sciences and life science processes: • Biomedical (including healthcare, pharmaceuticals, medical devices, diagnostics, etc) • Agri-veterinary and Food • Environmental/Industrial • Related Areas (bioinformatics/computational biology, bioengineering, nanobiotechnology, etc) Market BioBusiness already constitutes over 25% of global GDP and employs some 40% of the world’s labor force: • Accounts for nearly US$12 trillion (2005) • Employment figures skewed by > 50% engaged in subsistence level farming and low wage food processing in developing countries (including China and India)

  11. Global BioBusiness – Market Size (2001) BioBusiness Sector Global US$ billions South Asia US$ billions East Asia (ex Japan) US$ billions USA US$ billions Agriculture 2,611.4 223.2 362.1 529.4 Healthcare 2,933.8 33.5 108.6 1588.2 , Food Sector 3,288.4 100.5 277.6 1016.5 Biotechnology 40.0 1.4 4.1 25.0 BioBusiness-related R&D 257.9 2.4 12.1 105.9 Other BioBusiness 644.8 15.9 48.3 211.8 Total BioBusiness 9,776 (30.3%) 376 (47.3%) 812 (33.7%) 3,476 (32.8%) Est. GDP 32,239 797 2,414 10,588 Source: GS Shahi, BioBusiness in Asia, Pearson-Prentice Hall, 2004

  12. BioBusiness: Opportunity/Need for Value Creation Global South Asia East Asia (ex Japan) USA Agriculture US$2,331 US$410 US$731 US$35,293 Food US$7,340 US$1,046 US$2,372 US$49,825 Healthcare US$11,459 US$1,674 US$4,023 US$110,291 Biotech US$20,833 US$1,944 US$5,694 US$173,611 R&D US$20,149 US$1,993 US$6,705 US$147,055 Table: Estimated Annual Economic Contribution (per worker), 2001 Source: BioEnterprise Asia, 2003 (Primary data derived from UN Statistical Division, 2002, World Bank 2002, ILO, 2002). Published in GS Shahi, “BioBusiness in Asia: How Asia Can Capitalize on the Life Science Revolution” (Pearson/Prentice Hall, 2004)

  13. Some Key BioBusiness Opportunity Areas With Health and Development Implications Biomedical BioBusiness Healthcare Pharmaceuticals Biomedical biotechnology Herbal and traditional medicine Medical devices Diagnostics Agri-Veterinary and Food BioBusiness Agriculture Fisheries and aquaculture Animal husbandry Biopharming Pets and recreational animals Forestry and lumber Agri-biotechnology Food processing Environmental and Industrial BioBusiness Management of biodiversity Environmental bioremediation Waste management Environmental biotechnology Marine biotechnology Industrial biotechnology: bioenergy, new biomaterials, etc Other BioBusiness Related Activities Bio-IT and the application of ICT in the life sciences Bioengineering Nanotechnologies as applied to life sciences Life science and biotechnology education Life science and biotech R&D Life science and biotech contract services Source: Shahi, 2002

  14. Some Global Opportunities and Challenges with Potential BioBusiness Implications • Globalization - and the rapidly growing global economy (and growing inequity between “haves” and “have nots”; solving the 80/20 conundrum) • Healthcare and Biomedical Sciences - Advances in healthcare and the biomedical sciences, the genomics revolution and the move toward personalized medicine (and the need to manage the cost of healthcare as populations age) • Feeding the World – increased interest in more nutritious and less chemically tainted foods (and the need to feed more people in the face of ever diminishing arable land) • Renewables and Sustainability - Increasing demand for renewables and more sustainable production technologies – biofuels, new biomaterials (and solving the problems of global warming, environmental contamination and waste management) • Responding to Threats – responding to natural and human generated threats to economic development and stability (from pandemics, to natural disasters, to concerns about bioterrorism)

  15. Simplistic View of Life Science Technologies Core Competencies Technologies Gene Mapping/ Sequencing Enabling Technologies High throughput sequencing Microarray Comparative Genomics Structural Genomics Others Bioinformatics/ Computational Biology In silico modeling Genotyping Supporting Technologies Animal/ Plant Microbial Human Transgenic animals Functional Genomics Bioprocessing Toxicology Transformation Technology Proteomics/ Proteins Clinical Trials Applied Proteomics Structural Proteomics Functional Proteomics Others Others Source: Ad-hoc Working Group Report on Genomics for MTI, Shahi et al (2001)

  16. The BioBusiness Innovation Landscape Valley Opportunities: Commoditized, many competitors, low barriers to entry, low margins, “old” economy principles apply. Low interest for BioEnterprise unless innovative approach C C S C S Summit Opportunities: Technology and knowledge intensive, few competitors, high barriers to entry; high margins with well-developed business case, “new” economy principles apply. High BioEnterprise interest V V Recommended Approach: • Focus on “Summit” opportunities – putting people, technologies and resources together to capture the value proposition Cloud Opportunities: Technology and knowledge intensive, few competitors, high barriers to entry, business case not well developed, “future” economy principles apply. “KIV” interest

  17. Understanding Innovation 101… It is pretty simple: You do some stuff. Most fails. Some works. You do more of what works. If it works big, others quickly copy it. Then you do something else. The trick is the doing something else. Thomas Peters

  18. Our Analysis: Successful BioBusiness Innovation Critical Success Factors (given good infrastructure, facilities, policies, etc): • Smart People • Smart Ideas • Smart Money (immaterial if public or private sector driven: Silicon Valley model – driven by private money; European model – driven by public money) • Smart Alliances and Partnerships (throughout the world) Key Differentiator - The quality of money: Smart Money versus “No Brainer” Money. Note: Access to capital alone not sufficient!

  19. Adoption of Technology Innovation

  20. Technology Adoption Challenges • This is cool. I want it – does not matter how much it costs • We'll be the first institution in the region that has it. Makes us look good. Let's get it! • Can we afford it? How will we recover our costs? • Can it pay for itself? Is it reimbursable? Show me the money. We need to have this reviewed. Source: Moore, 1995

  21. Technology Adoption Landscape Source: Gartner Group, 2004

  22. BioPartnering

  23. BioPartnering: Capturing the Value Proposition BIOMEDICAL Encourage public-private partnership Work for win-win Researchers Industry Academic RegulatoryBodies Entrepreneurs INDUSTRIAL AGRIBUSINESS DevelopmentAgencies Finance Professional Services Legal /IPR, Media, Recruitment etc Make smart investments Bet on people ENVIRONMENTAL Source: Shahi, BioBusiness in Asia… (Pearson Prentice Hall, 2004)

  24. Some Priority Areas for Cooperation and Collaboration: Government-Academia-Industry • Meeting National/Regional/International Economic/Technology Developmental Priorities • Contract Research Initiatives • Facilitating Commercialization of Publicly-funded R&D and Managing IP • Bioethics • Regulatory • Public Health • Biosecurity • Incentivizing BioInnovation and BioEntrepreneurship • Raising Funding and Investment for Biotech – including Cultivating Public Markets for Biotech Stocks, and the development of a viable VC industry • Public Education/Communication and the Training of Life Science Personnel

  25. Some Thoughts on Rethinking Roles for Public Versus Private Sector Partnership Role for the Public Sector: - honest broker - regulator and information resource provider - quality standards enforcer - defender of the weak, the poor, the tragically ill - provider of safety net Partnership Role for the Private Sector: - partner in international/national health development enterprise - focus on those who can afford it - work with public sector to provide facilities and resources on a cost-sharing basis - private sector to take full responsibility for commercially viable enterprise - cost-sharing for activities which may not be profitable with support from public sector for unprofitable activities performed in the public interest Adapted from: Shahi, EIU Healthcare Roundtable, 1999

  26. Technology Assessment (and Economic Considerations)

  27. Technology Assessment Technology Assessment: a multi-disciplinary field of policy analysis, which studies the medical, social, ethical and economic implications of development, diffusion and use of technologies. Provides a bridge between scientific evidence, the judgement of technology professionals, the views of the general public, and the needs of policymakers.

  28. 3 Basic Stages in Technology Assessment There are three basic stages to technology assessment: 1) Resolving technical issues: this involves studying the safety, efficacy and when applicable, the diagnostic accuracy of a product. 2) Determining applicability:this involves studying the actual clinical uses and effectiveness of a product. Applicability issues will often focus on how the product complements, or will replace, a currently existing product (e. g. the impact of CAT scanning on skull X-rays and cerebral arteriography in head trauma). 3) Analyzing second-order impact:this involves the economic, social and ethical aspects of the product. It is understood that the drug or product may be on the market even as this stage of analysis is proceeding.

  29. Making Things Happen in BioBusiness • Identify “Summit” opportunities • Recognize that BioBusiness innovation need not always be “long life cycle” • Life science/biotech/Bio-IT investment need not be high risk – if you know what you are doing • More developed countries do not have a monopoly on good science and technology – innovative concepts can be found everywhere • Protect IP assets. Recognize that IP is not just patents – knowhow, knowwhy and knowwho can be just as important • Bet on people not only on technologies - committed and capable innovators/entrepreneurs will always find a way to win

  30. Opportunities multiply as they are seized. Sun Tzu

  31. Open Discussion and Synthesis

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