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From Lab to Market: CUSPE Lecture, Friday 14 March 2014 (Cambridge)

18/3/2014

As ever CUSPE attracted a great audience from all walks of life, a wide age range and a variety of backgrounds.  In fact the audience was a pretty good representation of the types of people needed to make up a good team in order to take a product “from Lab to Market”.  Read on to learn more!

 

There was a good line up of speakers for this event:

cuspe

 

Kelsey Lynn explained how Imperial Innovations convert scientific research into incubation which in turn converts to commercialisation and this is achieved by building a team, which creates a company and then results in a fully fledged spin-out.  She believes that there are 3 key steps to commercialisation:

  1. The commercial reason itself i.e. why do you want to take the product to market?
  2. Intellectual Property (IP): to protect the product as it goes to market and having the technical ability to continue to develop this IP
  3. Passion and desire to bring product to market

In her experience points (1) and (2) invariably leads to licensing out the technology whereas a combination of all three, usually results in a spin-out company.

 

She then went on to discuss the various funding models available for commercialisation:

  • Early revenues
  • Customer financing (crowd sourcing)
  • Grants
  • Angel investing
  • Venture investing

 

Interestingly her recommendation for obtaining funding wasn’t to attract as much funding as possible from the outset but to develop a funding strategy so that you get enough funding to reach a “value inflection point” in order to attract more investment to get to the next stage and so on.

 

This is a common sense approach but sometimes we all need to be told what common sense is!

Stephen Allott spoke about “From Science to Growth” which mirrored the theme of the evening: “From Lab to Market”.  He asked “what is the question we should be talking about?  Is it “how best to commercialise research?’”  No, he believes the question to be “How do you maximise the impact of scientific research on economy?”  So “how does this mechanism work?”  He stated that universities do have an effect on their local economy.  So what are the mechanisms?

  1. Direct spending on economy
  2. Idea-centric – commercialising research
  3. People-centric approach

To demonstrate how Universities have an effect on local economy, he made reference to the “people importing mechanism” citing Herman Hauser as a good example of this: Herman did a PhD in Physics at the Cavendish Laboratory then started on his entrepreneurial career by co-founding Acorn, all of which happened in Cambridge.  So Herman studied in Cambridge and stayed in Cambridge thereby adding to the local economy.

In turn this raises the question of “how to encourage more people like Herman Hauser? … we can do great research to attract more research but not necessarily commercialisation”.  Stephen further expanded this by saying that “happening places happen because happening people go there”.  Of course the challenge is “how to make your place ‘happening’?”

 

Alice Frost of the HEFCE explained how they are the biggest single research funding unit.  She went on to say that universities were created for economic and social reasons with research itself being a “late comer to the purpose of the University”.  She mentioned how, over the ages, universities provided a place where there was “academic freedom for their own interest and curiosity”.  She felt that universities were about “creating connectivity” and that “Cambridge is the best place to do it”.

 

Andy Richards (entrepreneur and angel investor) spoke about the traditional, linear methods of commercialisation from ‘lab to market’ where the focus is on IP flow and not on “social knowledge flow”.  He said how Pharma are moving to open innovation models, looking for ideas to come from outside the company.  Andy encourages a move away from the traditional models and to engage in more complicated ecosystems.  Referring to the 36 ventures he has been significantly involved in starting, he has analysed that:

31% came from academia spin-out
28% from companies
53% driven by entrepreneurs
17% from venture construction

Of the 10 most successful companies, 4 came from Academic IP and 100% came from good teams (and yes, he knows that the percentage figures don’t add up to 100!).

 

Andy referred to “individual risk” and “recycle”.  He explained how you know when clusters are working well because they provide a low risk environment for high risk products to be developed.  UK biotechs have succeeded because of larger companies shutting down and/or scaling back.  Employees from these larger companies have taken their shares and redundancy packages and are willing to take the risk to set up something by themselves.  Interestingly, Andy mentioned that “couples make much better decisions than singles” explaining that when you have one partner/husband/wife in a steady job this then provides the other person in the relationship the security and stability for taking a risk and starting up their own company.

 

As an entrepreneur Andy sees about 3 concepts per week but invests in only 2 per year with each venture taking 6-12 months to get off the ground. 

In his experience:

  • There is a shortage of capital linked resource;
  • There is a shortage of teams who are able to execute;
  • Social knowledge is key;
  • Need to make it easier to facilitate, to encourage; and
  • Need to link together capital, entrepreneurs and ideas.

 

During the Q&A session, Greer Deal, Director of Global Regulatory Services (GRS) commented how she was pleased to hear Andy speak about teams and not just entrepreneurs.  She felt that there is too much emphasis on students having to be entrepreneurs.  Not everyone can be an entrepreneur and surely it is better to develop entrepreneurial teams?  Andy very much agreed with this as did the other panel members.  Greer went on to add that there is fantastic science being researched and new products being developed but that these can get a long way down the line before anyone considers the regulations which they need to comply with.  If they’ve gone too far down a certain pathway, it could mean that their ‘discovery’ is a non starter.

 

Again, there were plenty of nods in agreement not only from the panel members but also from the audience too.  Andy reiterated an earlier comment where he felt it was important that a “28 year old in academia should work with a 28 year old researcher in MedImmune” (as the latter would be more in tune with the necessary regulations).  Greer replied “or a 46 year old from a regulatory consultancy!” causing a ripple of laughter throughout the auditorium.

The final question from the audience was about teams.  In essence they wanted to know if a team will form around an idea? Will a good team create a good idea?  Andy responded that “yes, they will glomerate around it” and that a “really good team will refine the idea”. 

 

So to get a product "From Lab to Market" it's great to have entrepreneurs but a really good team is even better!