Grant funding for biotech-academia collaborations April 23, 2019

My career path PhD Rockefeller University (1988) Post-doc Mount Sinai Post-doc UCSF Research Assistant Professor UCDavis Galileo Pharmaceuticals (1999) L2 Diagnostics (since 2002)

L2 Diagnostics A rarer type of biotech business model Started in 1998 by the Section of Rheumatology at Yale, as a diagnostics testing company focused on Lyme disease and lupus R&D branch now much larger than the diagnostic reference lab. 15- employees, 3,500 sq. ft. facility Focused on (very early) pre-clinical research on a wide variety of topics Mostly grant-funded

L2 Diagnostics – Research areas Infectious diseases Diagnostics: Tickborne diseases, Pseudomonas, Zika virus, Kawasaki disease,… Vaccines: Tickborne diseases, mosquito-borne diseases, Leishmania, malaria, … Anti-infectives: Tuberculosis, S. aureus, Pseudomonas, dengue virus Cancer Hepatocellular carcinoma Breast Glioma Inflammation Anti-MIF compounds Diagnostics Chemical-triggered asthma, response to radiotherapy, biomarkers of autoimmune attacks

L2 Diagnostics – Grant funding Most grant funding mechanisms are open to for-profit businesses (Surprisingly) sustainable STTR/SBIR ONLY

A primer on small-business grants (1) SBIR 2.5% of extramural research budget for agencies with a budget >$100M PI must be with small business concern. No need for academic partner Small business concern must accomplish 50-100% of the work STTR 0.3% of extramural research budget for agencies with a budget >$1B PI can be with small business concern or with academic partner Academic partner(s) must accomplish 40-60% of the work

A primer on small-business grants (2) Phase I: 1 (or 2) year - $225K-300K per year total costs Phase II: 2 (or 3) years - $1-3M total costs Funds are split according to work proposed, within mandated guidelines (Usually) reviewed by specialized study sections. Review criteria are (meant to be) the same as for academic grants Success rate: 20% for Phase I, 40% for Phase II. Only about 10% of Phase I progress to Phase II Must have a product as a final product. Market can be a small one No dilution of equity. No reach-through provision for intellectual property

L2 Diagnostics – Grant funding STTR/SBIR ONLY

Grant-funding in biotech Impact on culture (publications, conferences) Impact on scientific activity Agility NIH is much less controlling than VC Grants can fund efforts peripheral or preliminary to main focus (e.g. Sanaria) Need to be on cutting edge Need not address a large market Impact on lifestyle Time spent writing Salaries

No, we are not unique Ambergen, Inc. Watertown MA

Biotech-Academia collaboration Collaboration, as opposed to licensing and running with it This process has consequences on multiple fronts Type and scope of projects Funding considerations – Role of small-business grants A meeting of cultures

Collaborating in the “valley of death” Reproducibility Breadth of applicability (animal models, bacterial strains, human populations) Scaling up Production / stability issues Cost Toxicity False positive / False negative rates

Biotech-academia collaborations: a meeting of cultures All collaborations involve a loss of control Communication Expectations TRUST

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