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The Black Hole

Identifying the milestones in your translational venture

When bringing your discovery to market, make sure you construct an investment case, resolve your supply chain and plan your approach.


The following is a transcript from a talk I gave at the medical device development course, Brigham and Women’s Hospital (Boston, MA) on May 12, 2016.

Due to length, I have broken the talk up into seven parts:

Part 1: Why do this? – I describe the pros and cons of engaging in a translational research venture. It is definitely not for everybody.

Part 2: What you need to do before you start – I assumed that we were interested in pursuing science translation through entrepreneurship and discussed how best to start.

Part 3: Identifying milestones

Part 4: Execution strategy

Part 5: Leaving academia

Part 6: Questions and answers 1

Part 7: Questions and answers 2


In Part 3 we begin to think about how investors exit. The whole reason you’re considering advancing your work as a translational venture as opposed to a basic research project is because the sort of infrastructure and resources you need to take your discovery to market – to try to turn it into something people will actually use – probably far exceeds what you can get from government grants alone. Or at least government grants within the context of the university, which means you’re looking at other sources for funding.

Those other sources can be angel investors, venture capitalists or friends and family. Those are all very good people and for the most part, they do want to save lives. But they are also investing their money into seeing something you’re going to do turn into a product and they need to be convinced as to why their money should go to you, when it could just as easily go somewhere else. You’re not existing in a vacuum. Investors are constantly being pitched lifesaving, world-changing solutions, all of which matter. But some of the solutions provide better returns on their investment than others. And so, what you need to do is put yourself in their shoes and think “How am I going to show them that I can turn the money they are putting into the company around and make it profitable for them to do so?” Because that’s what’s really going to drive their decision.

Constructing an investment case

For example, the first place one probably thinks of doing that is: you’ll make platelets, you’ll start selling platelets and the company’s going to become cash-positive and you can pay your investors back with a return. But traditionally, for biotech companies, the timeline it takes to actually get through the pre-clinical work, the regulatory work, is five, possibly seven years, if you’re lucky. That’s just too long for most investors to want to tie up their money with you when they could just as easily put it into an S&P 500 company and see those returns much more quickly. Fortunately for you as well, biotech companies don’t tend to have the product be the major exit point for the original founders. Usually you end up getting acquired along the way by a much larger partner that is able to take it the rest of the way through. Those potential acquisition points become the places where your investors can get their money back. So you need to think about where those fit in along your trajectory because that’s where you start selling your story to get that initial investment to see this whole thing through.

Resolving the supply chain

So, we’ve defined the solution. Now we need to begin resolving the supply chain. You need to answer why this is possible now and why no one else has been able to do it before you, who the major players are and the impact that your discovery is going to make. In our case, it’s a very interesting timeline. It was only in 1994 that thrombopoietin was discovered, which is a cytokine, the major growth factor necessary to drive differentiation of the parent cell, the megakaryocyte, from stem cells. But, like any good manufacturing technology, you need to have a stable supply of starting material to be able to make and manufacture platelets in any sort of demand. That discovery didn’t come until 2006 with the invention of the induced pluripotent stem cell by Dr. Yamanaka.

So now we have a renewable stem cell line, we have a process of differentiating to megakaryocytes and we can make some platelets, but we’re still not making platelets at a cost point that’s anywhere near a thousand dollars a unit. We’re probably closer to $50,000, $100,000 a unit for platelets. So there needed to be an additional invention, and that came – well, at least this is where our lab began working on it – and we developed what we call a bioreactor. It’s a microfluidic device that was able to trigger the megakaryocytes to produce platelets at appreciably higher numbers, so several orders of magnitude higher than what they were doing before. That allows us effectively to divide the cost of producing those platelets down to a place where we’re now within the right order of magnitude. We’ll still need some future advancements to make it possible, but it’s become financially feasible.

Planning your approach

Once you resolve your supply chain, you can begin planning out your approach. You do that by taking your supply chain and finding where the major weaknesses are in your plan. These in turn become major hurdles that you have to overcome, and those hurdles can then be reclassified as milestones. These are the milestones that you need to achieve in order to see a product through to completion. In our case, we needed to – and still need to – source clinical-grade iPSC line, scale platelet yield sufficiently for pre-clinical development, qualify our platelets for an investigational new drug approval, translate the protocol to cGMP, complete our clinical trials, scale our platelet yield further for commercial development and then begin selling and distributing platelets to, hopefully first the United States, and then the world.

Jonathan Thon
Dr. Thon is the Founder and CEO of STRM.BIO. Before STRM.BIO Dr. Thon Founded Platelet BioGenesis where he served as CEO and Chief Scientific Officer. Before Platelet BioGenesis Dr. Thon was an Assistant Professor at Harvard Medical School.
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