Side-stepping ‘valley of death:’ a mechanism to breathe life into research investment
BOSTON—Healthcare research hits a “valley of death” before hitting the market, according to David Steinberg, MBA. Entities to facilitate a healthcare product’s progression from basic research to clinical practice could change that.
It’s no secret that healthcare research “often takes 20 years or so to reach patients,” according to Steinberg, who spoke at the 2012 Future of Health Technology Institute Summit hosted by the Massachusetts Institute of Technology.
The problem is that between basic research and commercialization, healthcare products receive too little attention in the translational research phase. Basic research receives about $40 million in various forms of financial support each year and companies spend about $67 billion to commercialize products each year, but only $5 billion is directed toward translational research, according to Steinberg. And the result is that for every dollar spent on basic research, only three cents is spent on licensing the resulting products.
Companies dedicated to the development of specific, promising technologies and treatments that have potential could help bridge the gap between the research-oriented academic and profit-oriented commercial realms, Steinberg suggested. PureTech Ventures in Boston, where Steinberg is a founding partner, is creating these companies by identifying commercially viable opportunities and funding them with a mixture of support from nonprofits and traditional investors.
“Traditional nonprofits are focused way upstream in development pipeline,” Steinberg said. “Traditional for-profit organizations tend to be more focused on getting products to market. We need a mechanism for the two groups to meet in the middle.”
Nonprofits associated with a specific cause that may provide financial support at the academic level could provide further financial support for their cause by investing in focused translational research companies, along with pharmaceutical companies and medical device manufacturers. Restrictions on participation in separate entities and monitoring company expenses as if they were spending grant money could help investors comply with regulations, according to Steinberg.
Now is the time to begin thinking about ways to bring healthcare products to the market more quickly, Steinberg said. “Let’s not wait around; let’s go start the company.”
It’s no secret that healthcare research “often takes 20 years or so to reach patients,” according to Steinberg, who spoke at the 2012 Future of Health Technology Institute Summit hosted by the Massachusetts Institute of Technology.
The problem is that between basic research and commercialization, healthcare products receive too little attention in the translational research phase. Basic research receives about $40 million in various forms of financial support each year and companies spend about $67 billion to commercialize products each year, but only $5 billion is directed toward translational research, according to Steinberg. And the result is that for every dollar spent on basic research, only three cents is spent on licensing the resulting products.
Companies dedicated to the development of specific, promising technologies and treatments that have potential could help bridge the gap between the research-oriented academic and profit-oriented commercial realms, Steinberg suggested. PureTech Ventures in Boston, where Steinberg is a founding partner, is creating these companies by identifying commercially viable opportunities and funding them with a mixture of support from nonprofits and traditional investors.
“Traditional nonprofits are focused way upstream in development pipeline,” Steinberg said. “Traditional for-profit organizations tend to be more focused on getting products to market. We need a mechanism for the two groups to meet in the middle.”
Nonprofits associated with a specific cause that may provide financial support at the academic level could provide further financial support for their cause by investing in focused translational research companies, along with pharmaceutical companies and medical device manufacturers. Restrictions on participation in separate entities and monitoring company expenses as if they were spending grant money could help investors comply with regulations, according to Steinberg.
Now is the time to begin thinking about ways to bring healthcare products to the market more quickly, Steinberg said. “Let’s not wait around; let’s go start the company.”