Everyone knows that greater Boston is “what’s happening” in the science and business of life science and biotech. On September 20, 2018, the Boston Bar Association brought together lawyers and scientists in an effort to educate lawyers as to trends in the science, and for lawyers to share business practices that the science is driving.
A quick summary of some of the high points follows.
Big data is coming, which should be no surprise, but at Mass General the application of machine learning and clinical genomics are being regularly used to provide targeted therapies to cancer treatment. No longer do doctors look through a microscope to look at cancerous cells. Rather, originally informed by biomarkers which can be harvested onsite (for example through blood analysis), the General compares these biomarkers through millions of items of data from other tumors. Machine learning improves accuracy of analysis. The genes involved in the tumor are located. Specifically focused treatment follows.
Further, big data is being utilized to test the effect of combining various drugs with disease models to identify possible palliatives. The effort that used to take place in the laboratory, over a long period of time at great expense, to test the effect of possible treatments now can be jump-started by conducting experiments, using big data, right within the computer. One company suggested that its automated biology platform could “conduct” more than 100,000 experiments every week in order to identify likely efficacious treatments.
The conference also addressed the business side of bio and life science. Highlights included: speculation on how best to protect, through patent or trade secret, new modalities of technology; what do you do with the science that permits the printing, by computer, of DNA (did I hear that one correctly?)? How do you protect the AI/big data set, which is typically subject to a software patent which may well be difficult to defend in litigation?
Finally, prospects for raising capital for bio were explored at some length. Major takeaways included:
There is a “raging bull market” to finance promising A rounds. The slowdown in private capital formation seems to be the C round and the D round. This may have ramifications for who makes these kinds of investments; with very long lead times to bring a product to market, even if successful, investment funds with a fixed term of life may not be the best choice of investor. Perhaps strategic investors are better. Also, funds may have a tendency to invest in companies that have benefited from being incubated in incubators in places like Boston, San Francisco, San Diego, etc., in order to shorten the timeline.
Valuations for A rounds and B rounds are creeping up. This may be one reason why there are problems at the C round and D round level. Overpricing the early rounds make subsequent rounds difficult. In 2017 eighty percent of later rounds were “up rounds” while current experience is that up rounds are only at about the seventy percent level.
In terms of financing through public offerings, there were fifty life science IPOs in the first half of 2018 of which eighteen were in biotech. Sixteen of these offerings came out of California and thirteen out of Massachusetts; the source of others were scattered. The pipeline seems full for the second half of 2018.