The Business of Science

Sorry for the delay in posting this —

This past Thursday, we had a festive social event for all the faculty and students engaged with Regenerative Medicine at Bull & Bones. Thank you to Dr. Michelle Theus and Megan Quesenberry for arranging the party and pumpkin carving!

For our class this week, Dr. Anju Seth from Pamplin College of Business led us in discussion of entrepreneurship and business in science. Was there anything from this week that you found new or surprising? What considerations that come from business perspectives that play into the development of regenerative medicine, particularly related to what you work on?

Dr. Seth will join us for further conversation in a few weeks, so we have that to look forward to.

8 comments:

  1. I really enjoyed Dr. Seth’s discussions this week because they brought a different perspective to RM I had not thought of before. Specifically, when investing into RM companies, its important to look at how they plan on breaking even in the long run. For the PCT company we presented on, they had a way to make money while their drugs went through clinical trials, but on paper their parents company (Caldrius Biosciences) is not breaking even. I also enjoyed Dr. Seth’s personal experience investing in stocks.
    I think people need to understand the business side of things to understand why in the United States (and probably other places around the world) are not prioritizing drug developments that could help save lives. Big pharma companies are trying to get people to invest in their companies, which means they need to get the drugs and treatments that have the biggest bang for the least buck. Unfortunately, this is typically cancer drugs, or other drugs that will be used by a large part of the population. While cell therapy has proven to be useful to treat cancer, it’s hard for investors to see the worth in it when it requires so much time to develop the personalized treatment for each patient, and in the meantime just increasing the overhead they have to reach to get their money back. On the other hand, a drug that is not as personalized may not work as well, but it is easier to use and therefore less costly in the long run. Dr. Seth mentioned cost to risk ratios, and in this example, cell therapy has a high cost and maybe a lower risk, while the drug therapy has a low cost and possibly a slightly higher risk if it does not work as well for everyone.

  2. I enjoyed the business assignment because it is not often that I get to look at the financials that drive the science environment, as we know it. I really liked the risk-o-meter that is published on the NASDAQ website because it highlights the high risk that encompasses regenerative therapy companies. As with any high risk investment there is huge potential for gains when a breakthrough is made. Dr Seth highlighted this when she told us about the success of her personal investment portfolio. However, unlike using a slot machine, investing in a biotechnology company does not have to be a complete gamble. We learnt how to interpret the financial and scientific information and draw conclusions on the investment opportunity of our companies. For developing regenerative therapies, it pays to have an approach that is attractive to share holders. I think that the notion pointed out by Kishgresh above is correct, the amount of investment needed to get returns drives the landscape of scientific discovery. For musculoskeletal disease there is a large number of studies that are developing cartilage-resurfacing techniques. This is because if their product is successful they will be able to sell it to a large market. However, the down side is that there is more competition. From a business perspective, to be successful you either have to be faster or more novel and effective than your competition. However, is it a good thing that scientific discovery is being pushed faster by economic gains? Can financial investment lead to better science? And, is the financial market limiting scientific focus from treating more rare diseases to commonplace diseases that are purely more profitable?

    1. I enjoyed the practical business perspective and the exercises we went through to learn more about biotech companies this week.

      Kishgresh and Sophie both made great points about how we have to have a balance regarding finances motivating scientific discoveries. Otherwise, there is a risk that minority diseases will be ignored and that suffering will not be alleviating simply because it does not bring large financial returns.

      Dr. Seth brought to our attention the need for biotech companies to have back up plans and ways to bring in money independent of their products, especially initially with a flagship product. The model that helps biotech companies partner with hospitals or universities or even larger companies will enable these companies to have some “for profit” products that pay the bills while they pursue other products that are needed (and may be subsidized or funded by the government) but do not have a large pay out.

  3. I liked Dr. Seth’s emphasis on determining where exactly the value and revenue stream for a regenerative medical product/company originates. Scientists (myself included) can sometimes get so involved in individual research worlds that they forget to consider the bigger picture of how different fields and industries fit together to give value (financial and otherwise) to a specific enterprise. From a business perspective, investors make decisions based on the perceived value of a company or product, a value determined by the consistency and usefulness of the product as well as other factors. This concept of value determination can also be applied in research. An intentional focus on big-picture questions—What is the value of this research? What is the end goal? How has this progressed over time? Has it progressed at all?—will only increase the success of scientific research. In my research specifically, I can use this concept as a reminder to maintain focus on the big picture of my field. I need to think about how my work could fit into the larger area of traumatic brain injury and health and how my projects add value (in the form of useful concepts, techniques, or marketable treatments) to the field.

  4. I agree with Dr.Seth on how we need to assess our research studies based on their potential to manifest into a commercial product down the line. Rarely do we think about the business aspect of our basic science research, unless the lab we work in supports translational medicine and is additionally invested in a small business besides academic science. I also agree with my peers on the propensity of some nations to fuel entrepreneurial capabilities in regenerative medicine, and how uncontrolled commercialization should be addressed. In general I think that the potential of stem cell therapy has been overestimated by the business-minded and they fail to realize the downside. We are inevitably comparing biological therapy to drug therapy and surgical treatment, and the former on average doesn’t figure under the category of “aggressive strategies”. It is not uncommon to expect long term recovery or lower benefits versus cost ratios with SCT’s.

  5. While I valued the enterprise aspect, the fact that scientists have to sell their research into a business venture is saddening. Without furthering funding, various treatments that could help those with orphan diseases are placed at risk of not getting any help, even with federal grants.
    Fortunately for me, my own research leads to highly profitable enterprises, as many people need prosthetics.

  6. Business has always played a part in research, be it in the patronage days, or in today’s world of grants and investors. I know scientists like to focus on “the science” and can think that financial, ethical, and communication issues fall outside their realm of expertise. However, these are considerations that need to be built in to the very fabric of every single research plan. If you can’t convince people that your project can make money, then investors will be hard to come by. If you can’t communicate the benefits of your research to the layperson, then your techniques might not be adopted by the public. If you can’t explain how your research is being conducted in ethically-acceptable ways, then you risk censure by federal agencies and perhaps worse in the wider public eye.

    This is not to say that every scientist should become a business expert, ethicist, and suave communicator in addition to their disciplinary expertise, but these thoughts should help guide their research in ways that are beneficial, both to themselves, their research, and to the public. This is especially true in a field like TE/RM, where ethical issues abound, the business of the field is so uncertain, and the possibilities are so exciting. This ties into our earliest discussions about what interdisciplinarity means, and our particular place in it. With all of these various and necessary angles we need to consider, it is all but imperative that we enroll many types of expertise into the TE/RM research world that can inform, mediate, and drive research in positive ways.

  7. Dr. Seth’s talk was a refreshing talk. As someone who looks for ways to make money, it allowed me to look at science as a tool for making money. Dr. Seth talked about one company that she invested in based on the knowledge of a friend. I think the knowledge and understanding gained from the perspective of research may be used by we scientists when it comes to investing in up and coming companies.

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