There are a lot of business strategies to monetize Life Science products. Things usually start in university laboratories where post-docs and “Back to the future” – type professors develop curve-jumping paradigm-shifting revolutionary technologies that cure cells or lab animals. These technologies are then picked up and used as key components or key mechanisms of action for development of new medicinal products that conquer the world.
It takes a long, very long time (usually more than 10 years) from the first experiment to the first-in-man prototype. From investors’ point of view, the positive part of this long process is that a relatively small amount of resources is usually needed at this stage. If time is not equally counting as a resource, of course. The nightmare starts with phase I and II clinical trials. The absolute majority of prototypes that survived until first-in-man trials usually fail until phase III. So early phase clinical development is usually considered as a risky entry point in the world of an average investor. When phase II is successfully completed and show robust (true) and good results, the risk is getting lower, which attracts virtually everyone who can and want to somehow invest in medicines. The only problem at this point is that an average investor does not usually have the financial muscles to compete with … Big Pharma.
When it comes to phase III, Big Pharma usually also gets very enthusiastic about investing in a product. Big Pharma is usually the one who at that phase has the best thinkable resources. In other words, it can be difficult if not impossible for an average investor to compete for the product at this time.
This is why a less expensive although traditionally more risky project is to invest early, or at least before the first successful and breaking-news human data sees the light. I used the standard Osawa and Miyazaki graph to depict this scenario and explain the typical dynamics of this kind of situations.
Is there a way to trick Big Pharma early and at the same time make a low-risk investment? Well, welcome to the world of reverse drug development. For those who still don’t know, there are endless possibilities to find (and acquire) very well-performing products developed outside the rich West. Here I don’t talk about ideas but the products that are already registered and successfully used in those not-West countries. You know it works because you see it. And you know it before everybody else.
Something similar took place in another, non-pharmaceutical business, when Minuit had purchased Manhattan from the Native Americans. Well, that was maybe not as noble as to develop new medicines that save lives, but the history can certainly teach us very useful and valuable lessons.