For those of us who have spent a good deal of our careers in Clinical Trials it’s exciting to see the change and almost dramatic shift in the research & development landscape from big pharma to a constellation of start-ups. Innovation and new treatments are now led by entrepreneurs and funded by angel investors, venture capitals (VC) and VC-backed IPOs. A whole ecosystem has surged on the back of record levels of liquidity and investors sitting on piles of cash recently propelled by US tax cuts. According to the National Venture Capital Association press release, US VC investment reached a whopping $130.9 billion in 2018: Software, Biotech & Pharma stealing the show. The newcomers, who will certainly see increased deals, are medical cannabis startups: Ascend Wellness alone recently obtained $40 million in seed-stage investment. How much of all these funds will eventually reach clinical trial stage is not tracked but it’s reasonable to expect that a good portion will, otherwise these companies would not get funding to start with.
So the money is there, but the reality is that the first challenge biotech & pharma entrepreneurs face, is to be prepared for the financing rounds (speaking from our own experience). The second challenge is delivering on promises and not to be naïve since to receive a chunk of these astronomical figures knowing your business is not enough: you need the numbers. And numbers, i.e.: costing, forecasts, financials, project and cash administration, is not precisely what scientists are good at, nor they should be. Unfortunately, entrepreneurs are underserved in this area with a shortage of finance services offerings. CROs aim at the good old reliable clients and are not prepared to provide startups with the support they really need in terms of the clinical trial processes and quotations. Besides, reaching out to quote development costs with hundreds of CROs is out of the question. Consulting firms like Big Four and the like are a luxury that startups cannot afford. Consequently, many startups deviate precious time and efforts to gather and manage financial data, which is not their core business, and end up being left behind during funding rounds due to their lack of preparation.
Fortunately, the ecosystem is evolving and growing and undoubtedly contributing to phenomenal innovation. However, we need to identify the remaining challenges and accelerate solutions to support these entrepreneurs. That, if we are truly interested in embracing patient access to new treatments.
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