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The Future of Biotech Innovation
The intersection of academia and entrepreneurship is vital in the biotech industry, where groundbreaking scientific discoveries are transformed into commercially viable enterprises. Last week, Sustainable Times attended the Bioinnovate Symposium at the GSK facilities, hosted by Oxford Venture Capital Network (OVCN). It brought together scientists, students, investors, and industry leaders to discuss key topics such as longevity, startup funding, and the commercialisation of intellectual property.
Julija, President of OVCN, reflected on the uncertainty many researchers face when considering their next steps, and what prompted her to get involved with the group. “A lot of students like myself don’t necessarily know what to do with their PhD,” she admitted. This uncertainty can be discouraging, but knowing there is a future beyond academia makes the journey more motivating.
Many Oxford PHD graduates, who are part of OVCN, are transitioning into fields such as data science, AI-driven drug discovery, and biotech startups. A strong academic background remains valuable in these transitions, as Julija noted, “Having a good university background gives credibility to the science.” She herself was ready to apply her scientific knowledge beyond the academic space once she graduates later this year.
How to recognise an investment ready start-up?
The day involved a wide variety of speakers in the biotech space. Sergey Jakimov, managing partner at LongeVC, told the room how he recognises breakthrough biotech.
Where he was always one to celebrate the wins of science his fundamental message was that brilliant science is not enough to create a stellar business.This distinction between what makes great science and what makes a great business is critical for startups looking to break into the field.
Sergey emphasised,
“Improving the lifespan of mice doesn’t make it a company—it makes it a fun science experiment. What makes it a company is an understanding of the regulatory pathway, a defined pipeline, and a clear disease indication.”
In other words, translating scientific breakthroughs into viable businesses requires a structured commercialisation strategy beyond promising lab results.
Commercialising Biotech
Image credit: https://www.linkedin.com/in/aidenequek/
The commercialisation of PhD research is an emerging trend in the biotech space. Investors seek not just innovative discoveries but clear pathways to market, regulatory understanding, and teams capable of navigating the complexities of biotech entrepreneurship.
Venture capitalists frequently ask startups: “What is the exit assumption?” While predicting the future with certainty is impossible, Sergey pointed out that teams must demonstrate a well-researched long-term strategy.
“We want to know that the team has looked at the market, studied competitors, and analysed how similar companies have exited at a later stage.”
A major challenge in commercialising biotech research lies in the shift in mindset required. Unlike academia, where funding primarily comes from grants, venture capital operates on an equity-based investment model that demands returns. Many researchers struggle to navigate this unfamiliar landscape.
Investors prioritise strong teams as much as strong science. Sergey stressed that even the most innovative research needs the right mix of scientific and entrepreneurial talent to succeed. “We have passed on many deals where the science was superb, but there was no one to commercialise it.”
A well-connected network of experienced founders can significantly impact a startup’s success. Sergey pointed to the biotech ecosystem in Berkeley, where founders and investors can easily connect,
“You find yourself in a community where you can meet these people over lunch, learn from their mistakes, and realise that building a company, while challenging, is attainable.”
Sergey highlighted how finding the right community is paramount. Founders must engage early with potential acquirers, as building relationships with big pharma can take over a year.
“Big pharma has a lot of cash but is running out of patents, creating a seller’s market for teams that can prove a solid mechanism of action.”
U.S. institutions like Stanford, Harvard, Yale, and MIT have standardised their approach to IP commercialisation, making it a significant revenue stream. Unlike traditional academia, where discoveries remain within university walls, spin-outs provide institutions with financial benefits and global recognition.
“Keeping science in the bubble doesn’t put a university’s name against the next big discovery, but spinning out does,” Sergey explained.
Investment Trends
Universities are increasingly fostering an entrepreneurial culture that encourages PhD researchers to explore commercialisation pathways and there has been a significant increase in investment.
Funding differentiation between the US and the UK
In 2024, the UK biotech sector demonstrated resilience by raising £3.5 billion in equity financing, a 94% increase from 2023. This surge indicates renewed confidence and the sector's ability to attract global investment.
However, Britain lags far behind the US.
The biotech investment landscape varies significantly between the U.S. and the UK. In the first quarter of 2024, U.S. biotech startups attracted over $44.5 billion in funding, compared to $3.9 billion in the UK. This disparity highlights the broader capital base and larger funding rounds prevalent in the U.S.
Investor behaviour differs between the two regions. U.S. investors are generally more aggressive and assertive in negotiations, benefiting from a well-established ecosystem with higher funding rounds. In contrast, UK investors have traditionally been more conservative, though they are gradually adopting U.S.-style investment practices.
While British biotech companies perform well in securing early-stage funding, they often struggle to raise subsequent financing rounds. On average, early-stage funding in the UK is $21 million per company, compared to $36 million in the U.S. This funding gap can hinder = scaling operations.
There are also distinct differences between the approach to Intellectual Property (IP). The Bayh-Dole Act of 1980 allows U.S. universities to retain ownership of federally funded inventions, leading to the establishment of Technology Transfer Offices (TTOs) that actively manage IP commercialisation. U.S. universities typically take smaller equity stakes in spinouts, around 5%.
In contrast, UK universities have historically taken larger equity stakes in spinouts, averaging 19.8%. However, recent trends show a reduction in university equity claims to encourage founder and investor engagement. European institutions have shifted toward the U.S. model of university ownership of IP, departing from the traditional “professor’s privilege” system.
Mishcon De Reya on the importance of IP
Sustainable Times reached out to Mishcon de Reya, a law firm with expertise in business, biodiversity, climate change, and human rights, to gather insights on what PhD research groups should consider before filing a patent. Paddi Farrant and Conor McLaughlin, provided valuable expertise.
“Patents give a significant amount of exclusivity. This means in the life sciences world that patents which protect medical products are very valuable."
Many drugs sold by pharmas originate not from their internal early-stage research efforts but rather are licensed in from biotechs. Accordingly, academic institutions are perfect breeding grounds and development pipeline. For this reason, academic institutions need to ensure their early-stage research and discovery work are protected by patents. This ensures the highest possible return to the academic institutions and to their academics.
PhD research groups must carefully consider patent ownership. Under English law, inventors initially own their inventions, but rights automatically transfer to their employer if created during employment. In commercial settings, ownership is usually more clear and legally defined.
Identifying inventors in a collaborative setting can be difficult, making it unclear where the chain of title begins. Many group members, such as students, are not employees, meaning their rights do not automatically transfer to the university. Others may have ambiguous employment status, further complicating ownership.
Additionally, research is often funded by multiple parties, each with expectations regarding IP ownership. This creates a uniquely challenging environment where entitlement to inventions can become messy. Clear documentation of ownership and aligning expectations early on are crucial—failure to do so can lead to costly and damaging disputes.
PhD research groups must also consider (i) their institution’s IP policies, which affect ownership and revenue sharing, and (ii) any grants or funding that contributed to the IP’s development
Another pressure that impacts PhD research groups disproportionately is timing of filing for patent applications. PhD research groups are motivated to publish their research, and to do so quickly. However, any such publication before a patent application is filed for that same research will put the prospects of obtaining successful protection of that invention at risk (given the patentability requirements of novelty and inventive step). Drafting a strong patent application to robustly protect an invention can take some time, however. Therein lies a tension for PhD research groups that must be navigated carefully to ensure inventions are suitably protected whilst not inhibiting publication opportunities.
Conclusion
As biotech innovation continues to evolve, understanding both the science and the business is essential for success. For aspiring founders, the message is clear: great science is just the beginning—building a company requires vision, strategy, and the right people to bring groundbreaking ideas to market. For investors: look for these attributes.