Innovation and funding in life sciences are accelerating. According to a Startup Health report, digital health startup funding peaked at $11.7 billion in 2017. This number is expected to be even higher in 2018. Despite this rise in funding, the World Bank reports that more than half of the world’s population lacks access to essential health care services.
Additionally, according to Statista, health care expenditure in the US is on course to reach 18.2% of GDP in 2018, making it the most expensive industry in the country. This data paints a paradoxical picture that insinuates that the more things change innovation-wise, the more they remain the same reality-wise. Where is the disconnect? Why are we not seeing spectacular results from life science innovations?
The answer may lie in the difficulty of commercializing life science innovations. For instance, the hot gene editing technology CRISPR was first observed in 1987 and yet is only now, in 2018, beginning to gain practical commercial applications. This long development cycle, while in most cases insurmountable, may be solved by applying different approaches to life science innovation.
Widya Mulyasasmita is the chief business officer and a founding member of Venn Biosciences, a startup in Silicon Valley that is tackling the area of proteomics through machine learning applications. She recently spoke with SVIC to discuss the challenge of turning life science innovations in commercial success.
Converge Technology and Life Sciences
The fields of life sciences and technology have long been related but run as independent parallel disciplines. However, Widya sees the need for an increased convergence of these two fields if we are to see more life science innovations impact the mass market. “We have the tech people interfacing with the bio people to create something that is now called tech bio instead of biotech,” she says, something that is generating interesting cross-disciplinary synergies that previously did not exist.
Referencing how Venn Biosciences operates, “having the interactions daily between the tech engineers and the biological scientists in the same room is truly very valuable in terms of just understanding how we start approaching biological questions, using computational tools that are available to the team.”
However, this convergence is far from perfect. While health startup funding is growing, it remains tiny compared to overall venture capital funding in the United States. Also, while tech can easily harness rapid prototyping approaches like agile and lean methodologies, life sciences must run through lengthy clinical trials before going to market.
While these challenges remain, Widya is optimistic that technologies like deep learning, Ai, IoT and others may hold the key to accelerating the number of life science innovations that make it to market. Stephen Caddick, the Wellcome Trust’s director of innovation, echoes her sentiments, “Make life science entrepreneurship as cool and as celebrated as technology entrepreneurship; excitement increases take up, and so deepens impact.”
Apply Different Funding Approaches
Widya explains the difference between curiosity-based research and application-based research. “Curiosity-based research is mostly associated with academia, where curiosity and just freedom to imagine things, concepts, is very encouraged,” she says.
Within a startup or corporate innovation setting, however, she says, research must be more disciplined and structured in pursuit of innovations with more near-term commercial viability. This disparity also means that funding structures will differ for each category. She identifies three distinct categories of funding and how each applies to the life science innovation process.
“If we think about investment in innovation and science, there is the government, venture capitalists and industry investors,” she says, “and they each have a different timeline regarding their expectation of getting returns on their investment.” Theoretical innovation research is best funded by government as their investment horizon tends to be longer.
Venture capital is best suited to fund startups that are in the process of turning theoretical innovations into commercially applicable products. Industry investors, on the other hand, have the option to do a bit of both. Because most large corporations are established businesses, they can afford to partner with both academic researchers and startups to find innovative solutions to either specific use cases or to come up with novel products.
Combine Startup and Corporate Strengths
“Corporations and startups approach innovation in different ways,” Widya says. In a corporate setting, many legacy structures and systems act as a limiting factor as to what innovations can be achieved. For example, a company like Johnson and Johnson can only innovate within the confines of its existing business scope.
Startups, on the other hand, are optimized to experiment and pivot based on feedback and collected data. However, she says, corporations and startups are but two sides of the same coin. Where corporations fall short in agility, they make up for in resources, market reach and industry knowledge. Startups too may have agility on their side but fall short in access to markets, resources and the other strengths corporations have.
The solution to faster life science innovation lies in corporations and startups collaborating more. One example of such a collaboration is the recent acquisition of Noona, a healthcare startup, by Varian, one of the largest radiation oncology treatments and software makers in the US.
Through this acquisition, Varian, previously stuck incrementally improving existing products, now has an entirely new line of products. Along these lines, Widya says, corporations need to seek out partnerships with innovative Silicon Valley startups, a move that can help them generate new capabilities without the lengthy and expensive process of creating such innovations in-house.
Beyond the Tip of the Iceberg
“The involvement of technology to support life science will enable so many more innovations, ideas and also products for the lives of many more people and patients around the world,” concludes Widya, a statement that reflects the efforts of so many life science practitioners and startups.
But if this promise of a better tomorrow is to be realized, corporations must be willing to take the bold step of partnering with startups, many of which are pursuing “moonshot” ideas in the hope of creating the life tools of tomorrow.
Silicon Valley Innovation Center supports this mission for a better tomorrow by helping corporations discover and partner with life science startups in Silicon Valley. To find out more about how you can visit Silicon Valley and experience, first hand, the breathtaking life science innovations emerging in the area, click here or call us on +1(650) 274 -0214 to speak to an SVIC innovation tour specialist.