By Scott Meacham
Copyright © 2015 The Oklahoma Publishing Co.
It’s not always apparent just how significant Oklahoma’s opportunity in life science startup companies is.
When we talk about startups, we tend toward information technology or advanced manufacturing deals. Things move faster in those types of businesses. Solutions are easier to understand. There’s simply more to talk about from week to week.
Milestones in life science never arrive quickly. The pace is slow, and extremely nuanced and difficult. In IT, if something isn’t going to work, we can find out cheaply and fast. In life science, there’s no such thing as discovering anything cheaply or fast.
The life science market is well defined. Outcomes are binary. Either the technology works or it doesn’t. Investment dollars are not spent in market development, but in proving out the technology.
It’s exciting that more than a quarter of i2E’s clients and investments are in life science.
Every year, good opportunities to engage in that sector are increasing. But there are also unique challenges.
Finding the millions of dollars in capital to finance the long path from lab bench to pharmacy shelf (which can easily take ten years or more) is becoming increasingly tough.
Historically, life sciences firms have benefited from grants from the National Science Foundation (NSF) and the National Institutes of Health (NIH), or from state or regional sources, like OCAST’s OARS and EDGE funds.
With budget caps on HSF and NIH funding, and cutbacks in state commitments, the gap is widening between where grant funding ends and where big pharmaceuticals or biotech venture funds are willing to step in and invest.
Biolytx Pharmaceuticals is an example of what life science companies go through. Biolytx has developed a novel new drug to fight antibiotic-resistant bacteria. Biolytx’s patent coverage extends to 2035. Big pharmaceutical houses are looking for exactly this type of solution. There are huge incentives to get new antibiotics to market.
The company’s scientific founder and executive team have moved the company a huge way with more than $6 million in non-dilutive grants (including $1.8 million in OCAST EDGE funding). It’s hard to imagine what they could have done better.
Now that Biolytx is on the cusp of concluding the studies that can lead to clinical trials, it’s going to take another million-plus dollars just to get through the requirements to begin those trials. That’s the challenge that every life sciences company confronts.
i2E and OCAST are standing in the breach to help Oklahoma companies like Biolytx survive the gap between grants and venture funding, but we need help.
Additional federal, state and venture investment in life science companies at the critical pre-trial stage can turn what is starting to look like the oft named Valley of Death into the Valley of Life.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at [email protected].