© Gurinder Shahi, 2007. All rights of reproduction and reuse reserved Working with Tomorrow’s...

© Gurinder Shahi, 2007. All rights of reproduction and reuse reserved Working with Tomorrow’s Leaders in Global Health and Development…

Innovation and Global BioBusiness

Gurinder Shahi, MD, PhD, MPH

March 14, 2008


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

Technology Assessment (and Economic Considerations)


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


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 DirectorWhat are the great themes for the 21st century? Proposed:

o Integration of our knowledge base incorporating the atom, the computer and the gene (in the context of solving problems and generating value-added solutions)

o Translational Research and Technology Innovation

o Synergistic Partnerships and Alliances – across disciplinary, regional and international boundaries

o Value and Wealth Creation through Entrepreneurship and Enterprise Development

Source: Gurinder Shahi, Osaka Innovation (2004)


Some Definitions of

InterestInnovation

o The process whereby ideas for new (or improved) products, processes or services are developed and brought to use.

Technology:

o The application of scientific advances to benefit humanity

o 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).

o Human innovation in action that involves the generation of knowledge and processes to develop systems that solve problems and extend human capabilities.


Understanding the BioBusiness Innovation

and Commercialization Pipeline

ConceptTechnology Validation

Business Case

Validation

Market Entry and

Rapid Growth

Increasing Value PropositionDecreasing Execution Risk

Focus on science and technologyFocus on management and business development

“Productization”

Commercial Product and Service Devt

Research(new insights and

understanding)

Development(translation of insights to practical reality)

Application(commercial and social application)

responding to market realities

Source: Shahi, 2004


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


Introduction to BioBusiness and BioInnovation

Discovery is seeing what everybody else has seen, and thinking what nobody else has

thought.

Albert Szent-Gyorgi


About BioBusiness

DefinitionCommercial 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)


Global BioBusiness – Market Size (2001)

BioBusiness Sector

GlobalUS$ billions

South AsiaUS$ billions

East Asia (ex Japan)US$ billions

USAUS$ billions Agricult

ure2,611.4 223.2 362.1 529.4

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


BioBusiness: Opportunity/Need

for Value Creation

US$173,611

US$5,694US$1,944US$20,833

Biotech

US$147,055

US$6,705US$1,993US$20,149

R&D

US$110,291

US$4,023 US$1,674US$11,459

Healthcare

US$49,825US$2,372US$1,046 US$7,340Food

US$35,293US$731US$410US$2,331 Agriculture

USAEast Asia (ex Japan)

South Asia

Global

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)


Some Key BioBusiness Opportunity Areas With Health and Development

ImplicationsBiomedical BioBusinessHealthcare PharmaceuticalsBiomedical biotechnologyHerbal and traditional medicineMedical devicesDiagnostics

Agri-Veterinary and Food BioBusinessAgricultureFisheries and aquacultureAnimal husbandryBiopharmingPets and recreational animalsForestry and lumberAgri-biotechnologyFood processing

Environmental and Industrial BioBusiness

Management of biodiversityEnvironmental bioremediationWaste managementEnvironmental biotechnologyMarine biotechnologyIndustrial biotechnology: bioenergy,

new biomaterials, etc Other BioBusiness Related

ActivitiesBio-IT and the application of ICT in the

life sciencesBioengineeringNanotechnologies as applied to life

sciencesLife science and biotechnology

educationLife science and biotech R&DLife science and biotech contract

services

Source: Shahi, 2002


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)

Gene Mapping/ Sequencing

Functional Genomics

Proteomics/ Proteins

Genotyping

Comparative Genomics

Structural Genomics

Human Animal/ Plant

Microbial

Structural Proteomics

Functional Proteomics

Applied Proteomics

Core Competencies

Bioinformatics/ Computational Biology

Technologies

Enabling Technologies

High throughput sequencing

Microarray

Supporting Technologies

Bioprocessing

Toxicology

Transgenic animals

Transformation Technology

Clinical Trials

Simplistic View of Life Science Technologies

In silico modeling

OthersOthers

Others

Source: Ad-hoc Working Group Report on Genomics for MTI, Shahi et al (2001)


The BioBusiness Innovation Landscape

VV

S SC C

C

Valley Opportunities: Commoditized, many competitors, low barriers to entry, low margins, “old” economy principles apply. Low interest for BioEnterprise unless innovative approach

Recommended Approach:

Focus on “Summit” opportunities – putting people, technologies and resources together to capture the value proposition

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 interestCloud Opportunities: Technology and knowledge intensive, few competitors, high barriers to entry, business case not well developed, “future” economy principles apply. “KIV” interest


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


Our Analysis: Successful BioBusiness Innovation

Critical Success Factors (given good infrastructure, facilities, policies, etc):

Smart PeopleSmart 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!


Adoption of Technology

Innovation


Technology Adoption Challenges

Source: Moore, 1995

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.

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!


Technology Adoption Landscape

Source: Gartner Group, 2004


BioPartnering


BioPartnering: Capturing the Value Proposition

Professional Services Legal /IPR, Media,

Recruitment etc

Regulatory Bodies

Development Agencies

Academic

Researchers

Finance

Entrepreneurs

Industry

Work for win-win Encourage public-private partnership

Bet on people Make smart investments

Source: Shahi, BioBusiness in Asia…(Pearson Prentice Hall, 2004)


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


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


Technology Assessment (and Economic Considerations)


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.


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.


Making Things Happen in BioBusiness

1. Identify “Summit” opportunities

2. Recognize that BioBusiness innovation need not always be “long life cycle”

3. Life science/biotech/Bio-IT investment need not be high risk – if you know what you are doing

4. More developed countries do not have a monopoly on good science and technology – innovative concepts can be found everywhere

5. Protect IP assets. Recognize that IP is not just patents – knowhow, knowwhy and knowwho can be just as important

6. Bet on people not only on technologies - committed and capable innovators/entrepreneurs will always find a way to win


Opportunities multiply as they are seized.

Sun Tzu


Open Discussion and

Synthesis

© Gurinder Shahi, 2007. All rights of reproduction and reuse reserved Working with Tomorrow’s...

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