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Turning Biomedical Research into Commercial Value - An Entrepreneur Experience

21/10/2019

A Biotech startup story at Master in Finance USI

Alcide Barberis, PhD

Scientific founder, former Board Member and CSO of ESBATech AG

 

Biomedical research can be turned into commercial value, as we regularly hear from news about successful launches of innovative drugs or acquisitions of pharma/biotech companies by other pharma/biotech companies. However, this is easily said but much more difficult to achieve. Successful stories are indeed relatively rare; many pharma/biotech companies end up closing shop or selling their assets for next to nothing. How do the few "lucky" companies achieve their success? Is there a secret recipe to success? I do not have a comprehensive, general recipe to success, of course. However, I can describe how biomedical research, from the very early steps of establishing a drug discovery technology to the selection and development of drug candidates, was indeed turned into commercial value by ESBATech, a biotech company that I co-founded with two partners in Zurich and for which I have been the Chief Scientific Officer. I will use the ESBATech case to underline some key points that I consider essential for at least getting close to success.

I will start from the end, namely from the announcement of September 14, 2009 that ESBATech had been acquired by Alcon, a US pharma company focused on ophthalmology (Fig. 1). The announcement summary stated that Alcon "gains access to proprietary antibody fragment technology particularly suited to treat eye diseases. - Acquisition establishes sustainable platform for ongoing biologics development. – Deal builds on other recent transactions to expand breadth and depth of Alcon’s development opportunities in eye care in the long term. – ESBATech shareholders retain rights to non-ophthalmic technology and products." There are two particular aspects of this transaction that are worth emphasizing, in addition to the obvious commercial success and return on investment for the founders and all the other shareholders. First, ESBATech Research & Development activities were allowed to continue at the ESBATech premises in Switzerland. This was a smart decision by Alcon (and very much welcomed by the ESBATech co-workers), which was taken in order to acquire not just the Intellectual Property (IP) of ESBATech but also the know-how that inevitably comes with people working at the company. As it is said, "the devil is in the details" and most technologies and R&D processes have plenty of details and know-how that are not necessarily disclosed in patents and are only known (and manageable) by the people who developed such technologies and processes. Second, the rights on the non-ophthalmic application of the technology and the respective products were allowed to stay with the ESBATech shareholders, who used them to create a new company as a spin-off from ESBATech, Delenex Therapeutics. Delenex is indeed using the ESBATech antibody fragment technology to discover and develop products for the treatment of skin disorders and cancer. Delenex was acquired in July 2016 by Cell Medica, a British biotech company.

 

Further information: https://www.cpstartup.ch/website/sites/default/files/media/esbatech_ag_how_to_turn_biomedical_research_into_commercial_value_alcide_barberis.pdf