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Nanobiotechnology: Unique Commercialization Issues

Laura Faulconer is the Director of Innovation Projects at COIN (Center of Innovation for Nanobiotechnology) and will be on the panel discussing “Nanotechnology IP: Implications of the Very Small” at the Licensing Executives Winter Conference 2011 on Thursday 10th February in San José, California, USA. Panel participants will include Maurice Gunderson from CMEA Capital, Douglas Hutchings from Silicon Solar Solutions and Brent Segal from Lockheed Martin.

The opportunity for significant clinical benefits represented by the myriad applications of nanobiotechnology in medical product sectors is remarkable. For example, nano-enabled drug delivery holds promise to improve biodistribution, reduce the therapeutic dose, reduce toxicity, improve efficacy, and also to potentially offer multimodal or theranostic approaches. However, nanotechnology is not an industry. Rather, it is a set of tools and understandings that are used across myriad industries.

When applied to the biomedical sector, there are unique commercialization issues that companies face. One of the largest issues is the uncertain regulatory landscape, largely from the FDA, but also from other regulatory agencies like EPA and OSHA. There are strategies to accelerate the commercialization process, ranging from building strong relationships with the FDA early in the development process to working with centers like the Nanotechnology Characterization Laboratory.

A significant hurdle to commercialization is funding. Biomedical products generally need significant financial resources in order to complete product development and enter clinical trials. Considering that the typical nanomedicine company’s exit strategy is merger or acquisition, the financial burden of completing Phase 2 clinical trials with positive results, after which valuations become significantly more favorable, can be crippling. Another model is to partner early with a large industry partner and complete product development according to their specifications. This ensures that your product is meeting a market need, but such exclusivity in sponsored research agreements and joint development also have limitations that can have repercussions on the subsequent commercial path.

Government grant and contract opportunities are sometimes viewed by investors as substituting for seed investment. The National Nanotechnology Initiative, which celebrated the 10-year anniversary of the legislation, is the single largest government investment in science since the Apollo space program. However, government grants are meant to develop intellectual property and provide meager support for commercial activities required to build and grow a successful business. It is this gap where seed money is crucial to allow companies to develop products that investors will invest in, instead of simply developing platform technologies. In spite of long cycle times and significant administrative requirements involved in submitting and reporting, this type of non-dilutive funding can validate technology that is too early even for angel investment.

In the biomedical space, the vast majority of products that are funded and under development have strong IP protection. Because of the high cost of development and clinical validation, most companies must also consider whether there will be sufficient life of the patent at the end of product development to entice partners. The 5-year exclusivity granted by the FDA is generally not a sufficient business case. When considering nanobiotechnologies, like diagnostic platforms, this might not hold true.

For example, iZON Science’s nanopores technology would be incredibly difficult for competitors to replicate, and their product is protected more by trade secret than by a patent portfolio. Nanotechnology is generally a platform technology that is enabling. It is not the product, it is what makes the product better, faster, cheaper. Thus it is crucial to establish early in a collaborative relationship what value the enabling technology brings to a product.

About Laura Faulconer

Laura Faulconer
Laura is graduated from VCU Forensics Science program in 2004. She completed her Ph.D. in Biomedical Engineering from the University of North Carolina at Chapel Hill in 2009. Laura started in nanotech by way of a small dissertation project on nanomaterials for refraction contrast imaging that led to an internship with Lux in nanotech business intelligence, and subsequently an internship with COIN (Center of Innovation for Nanobiotechnology).

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