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Friday, May 23, 2014

New models of biotech entrepreneurship

Thursday night, the Oxbridge Biotech Roundtable concluded its 2014 Onestart Americas $150k business plan competition. Several dozen contestants, mentors, and one LA-area biotech entrepreneurship professor travelled to the City Club in downtown San Francisco to hear the 10 finalists offer elevator pitches, and then see the money awarded to one of the teams.

Following the initial (2013) competition in London, the American competition began with December's submission of pre-proposals by 150 teams. 35 of these teams (including one led by current KGI MBS students) travelled to a February bootcamp at Stanford for additional training and mentoring, before the 10 finalists were announced in April. One of the 10 finalists, Excell Biosciences, was cofounded by a KGI alumnus.

As in the two previous Onestart Europe competitions, the contestants were required to be aged 35 or younger. As in Europe, the US competition was co-sponsored by SR One, the corporate investing arm of GlaxoSmithKline.

The 10 US finalists reflected an interesting mix of geographies and industry segments. From the leading U.S. biotech clusters, only three teams were from the Bay Area, one from Boston and none from San Diego. The competition also included two teams from Toronto, one from Vancouver and one each from Los Angeles, Denver and New York.

The mix of products was broadly representative of life science startup companies
  • 3 therapeutics
  • 3 devices
  • 1 diagnostic
  • 1 healthcare IT (consumer app)
  • 2 process innovations, for manufacturing and for drug delivery
Most of the startups were in some phase of bootstrap funding, and the judges commiserated with the particular difficulty that therapeutic companies face in raising the tens (or hundreds) of millions necessary to come to market.

Have judged, organized and mentored business plan competitions for years, I was struck by several aspects of the OBR finalists compare to typical (college-based) business plan competitions.
  • Of course, a lll of the plans were about technology. That’s true for our KGI competition but not for the typical b-school competition.
  • Second was the depth of the entrepreneurs’ understanding of their technology. Again, at many (not all) b-school competitions, the entrepreneurs are smart individuals who BS their way through a partly thought out concept. On Thursday, the winning entry — Resilience Pharmaceuticals— reflected six years of work, including the 2013 MIT PhD dissertation by cofounder Retsina Meyer.
  • The judges remarked on the depth of the teams (and that, like VCs, ultimately they had to bet on the teams as much as the ideas). The audience only saw one team member make a presentation, but some teams had five or more official members listed in the program. At least four teams were headed by polished PhDs. Apparently the winning team has attracted Boston veterans to join their team, beyond the founders.
  • Finally, some firms had won equity investment prior to the finals. The winner has attracted a commitment from Third Rock Ventures, a leading biotech VC.
Representing SR One, partner Matthew Foy said that the $150K prize “is not the point of Onestart — it was just the carrot to get people’s attention”. They seem to have succeeded in doing so. Overall, in its second year (and third competition), the Onestart sponsors seem to have moved closer to their goal of creating actual entrepreneurs and startups.

It will take a few months to see how many of these 10 companies will actually launch and — more importantly — how many can succeed in bringing a product to market. Still, in terms of the structure of the program (and the nature of the competitors), the sponsors seem to have already done better than all but a handful of school-based competitions.