1. The number one thing entrepreneurs and VCs can do is focus on creating science-driven companies that are committed to making enormous differences in the lives of patients. They should take advantage of the amazingly rapid pace of biomedical discovery from academia and the enormous interest from pharma in true innovation driven by entrepreneurial cultures from biotech. At all costs, avoid the illusion that biotech companies focused on “low cost, low risk” value propositions (e.g., “re-purposing” failed pharma assets) will yield a more assured and/or rapid exit. “Incrementalism” is now the greatest risk. Just look at what patients, physicians, payers, and regulators are demanding. They’re actually screaming, not just demanding. Can’t you hear them?
2. Go for it now! This is a bad time to sit on the sidelines. Sure, there’s some general uncertainty out there, and the number and size of funds will decrease. But, for those investors with the means in hand, this just might be the best time ever to fund great science with great people. And, for those entrepreneurs with unbelievable visions and ideas, the money will be there for you. The “new normal” may mean less money for fewer ideas, but the best money will fund the greatest ideas. Harness the incredible Bay Area resources around you, and feel free to send those of us on the East Coast one of your most pleasant resources—your wine—in return for our excellent and supportive advice!
3. Finally, meet with your friends in Silicon Valley from the IT industry and help them understand that their advocacy for massive “IP reform” could destroy the biotech industry. Indeed, recent judicial rulings and potential legislative and changes at the U.S. Patent and Trademark Office could render intellectual property protection for biomedical research and discovery essentially worthless. Help your IT friends understand how frail our industry actually is, since our business models require the patience and commitment from investors who rely on strong IP protection during the period of 10 plus years and the $1-2 billion in investment required to bring our products to market. The trade-offs here are just not good for society. What might be good for iPods could be disastrous for patients.
[[Editor’s Note: Maraganore’s essay is part of a series of guest editorials we are running as part of the launch of Xconomy San Francisco. It was based on the following question, which we posed to technology leaders: “What 3 things can San Francisco and Silicon Valley entrepreneurs and VCs do to foster a more stable environment for innovation in IT, life sciences, and energy, and become less wedded to cycles of boom and bust?”]]