Monday, October 24, 2011

The Bottleneck: A Classic Hurdle

As we all know, bottlenecks happen constantly, in life and in science. Many are at least somewhat predictable and preventable. There has been discussion recently in life sciences about the pending bottleneck represented by the growing and significant amount of genomic data being amassed by various sequencing companies. Last month, sequencing companies in the US, including Complete Genomics, discussed the need to have a central clearinghouse for all the data we have and the data to come, as sequencing continues on its path to becoming more affordable. The argument—a solid one, and one made elsewhere—is that in order for genomics to realize its potential in personalized medicine, data will need to be easily accessible for all researchers, and eventually doctors. 

With the advent of “cloud” technology, this can become reality, perhaps not as quickly as predicted by the swarm of companies calling for it, and/or working in the field. There will likely be privacy, cost, and regulatory issues to be dealt with first—but this is an idea whose time has more than come. Companies in the sequencing game recognize that their growth and the impact of sequencing is tied to how this data is used. Making it accessible to researchers and scientists will be the key. In this spending-constrained era, most healthcare systems do not have the resources or IT space to develop a large application to run through all the genomic data. The advent of cloud technology has turned this notion on its head.

To this end, several groups have begun developing systems that enable the massive amounts of genomic data to be used by doctors and scientists alike. In theory, the data can be accessed to help with diagnoses, as well as to aid in the development of targeted treatments. The UK has a consortium of groups, led by Eagle Genomics Ltd and partially funded by the Technology Strategy Board, working on developing a “genetics cloud.” BGI, the very large sequencing company based in China, is working on something similar for use with its data. Last week, DNAnexus, a California-based start-up, raised a second round of financing to the tune of $15 million to fund development of its DNA data management and analysis platform. The round was co-led by TPG and Google Ventures. All players mentioned here have a common goal:  to develop a central store for the genomics data being collected every day.

These programs are a start in clearing up the looming bottleneck. The very real promise of genomic data and its uses to improve diagnosis and treatment of a wide-range of diseases and conditions is coming to fruition. Private companies and government entities see the wisdom of putting it together in one place. Of course, there are still matters to figure out—who will own the intellectual property; how are profits shared/divided that are derived from genes that are identified by one group but that are developed into therapeutics or diagnostic tests by another group are two examples.  However, to enable the sorting and matching of tons of sequenced data to help find common genetic links—or to better a diagnosis—is a big step forward in the evolution of sequencing and “personalized medicine.”

Wednesday, October 12, 2011

The Innovator's Dilemma

When I heard that Steve Jobs had passed away last week, I was reminded of how tricky the cult of personality as a management style can be. Mr. Jobs was a visionary and truly changed the way we view the world.  Design and evolution of how we communicate and what we demand of our gadgets was his hallmark. When he took a medical leave in 2010, the stock suffered.  When he stepped down a few months ago, the stock suffered. While there is no doubt that Apple, a well-established global brand, will go on under the auspices of CEO Tim Cook (appointed in August 2011), Mr. Jobs’ absence also underscores the dilemma of what to do when it is time for a charismatic leader to go off the stage.

We have seen this again and again in life science companies. Founders of these companies--most often scientists—take a compelling (in theory) idea and lead a company through the start-up phase. These leaders often occupy the central role in fundraising—the reason the investors are willing to take a chance on promising technology and science.  This is ever more true during the current dire state of affairs the industry finds itself in these days. As a company evolves, the founder often becomes synonymous with the “brand.”  And therein lies the rub. Companies advance and change. In these times, they try to do more with less and seek creative financing avenues. When one person is the brand, rather than a team, risk increases. This is true across technology and biotechnology, and has never been truer than now in life sciences. Companies founded in the last five years, are staying private longer due to a barely existent IPO market for life science companies.

This means that founders—in many cases, a company’s visionary—are staying much longer. Due to financial constraints, teams are smaller. While the current market conditions may be better suited to the entrepreneurial mindset, at some point, running a business becomes more than the selling of an idea, concept or vision to investors. It becomes deal-making and horse-trading with other companies, vendors and potential partners.  As companies mature, the entrepreneurial mindset must give way to operating the business. This does not mean giving up nimbleness and flexibility.  What it does mean is that a company built around a “big” personality” may suffer in the long term. (The investors in the Martha Stewart empire and in Oprah’s fiefdoms are nervous for this very reason.) Balance is essential for a company as it develops. A founder has to be willing to shift roles, allow for growth of key members of his or her team and clearly communicate a succession plan. Apple did this the right way. Life sciences and healthcare are littered with examples of companies and founders that did not.  (See:  board-pressured removals of any number of founders or turn-around CEOs who overstayed their welcome.)

Even in this era of tight financing, most life science ventures cannot survive into the medium term without a plan to shift from entrepreneurial mode to day to day business mode.  This can be a difficult shift for most “visionaries.” In Apple’s case, the company will go on. Mr. Jobs’ and his vision will be missed—and long remembered. He was a shining example of how a founder can shift roles.  It is helpful to remember, though, that he left Apple for several years in the late 90s before returning as CEO of a more established version. He was the example that surpasses the rule.