Children's Hospital Boston last week unveiled a technology-development fund designed to help move early-stage biomedical technologies from the research hospital to the market, according to the hospital.
The fund will dole out proof-of-concept grants worth as much as $50,000 and technology-development grants worth between $150,000 and $200,000 to research projects at Children's. Awardees will be chosen by an external advisory board comprising members of the pharmaceutical, biotech, medical device, and investment communities, the hospital said.
Select members of the advisory board will then help form a commercialization plan for the chosen projects and hire contract-research organizations to conduct the work that is necessary to develop the technologies to the point where they will be attractive licensing or investment targets, Children's said.
The hospital, which serves as the primary pediatric teaching hospital of Harvard University, has thus far committed $1 million per year over the next two years to the fund, but may eventually bump up that commitment to as much as $1.7 million per year, Erik Halvorsen, director of technology and business development at Children's, told BTW this week.
Halvorsen helped launch the new fund after joining Children's in late 2007 from Harvard, where he served as director of business development at the Harvard Stem Cell Institute and the Harvard Office of Technology Development.
Halvorsen said that that he was involved in the early stages of Harvard's Technology Accelerator Fund, which awards similar gap funding awards to early-stage research projects with commercial potential at the school.
"When I came to Children's, I said this is something you need to do — to create a mechanism by which you can invest money in technologies, but also invest time, effort, expertise, and the right people to advance the development of the technologies in a way that you can't currently within the limitations of your institution," Halvorsen said.
"If you don't, it's becoming harder and harder over the last decade or so to license these early-stage technologies," he added.
So Halvorsen spent most of last year examining other funding mechanisms at universities and research hospitals around the US in order to make a recommendation to Children's about how it should structure its own tech-development fund.
"We looked at everything and then created our tech-development fund with a very specific focus and framework to do what I thought needed to be accomplished based on the types of research and technologies, and their stage of development, at Children's Hospital," Halvorsen said.
Those technologies most typically include therapeutics, diagnostics, devices, software, and research or drug-discovery tools.
"The research tools and drug-discovery area, they are kind of ready to go and you can transfer them," Halvorsen said, while diagnostics, devices, and software typically require some further investment.
Therapeutics, on the other hand, "are an area where you might have a hit or lead compound, but we don't really have the ability to do a lot of follow-up chemistry here, or any substantial pre-clinical testing such as ADME-tox," he said.
Another area that Halvorsen sees as needing a boost from the new fund is the development of biomedical technologies that are suitable for pediatric patients.
"We have a lot of doctors who see these patients on a daily basis, and a lot of times they're working with things that are designed for adults, and they're sort of retrofitting it or jerry-rigging it to deal with their smaller patients," he said. "They see firsthand where the gaps are, and can sketch out what they need, but they're not going to draft and design something. And we don't have prototyping facilities here. But there are plenty of CROs out there that can do that."
Halvorsen said that the Children's Technology and Innovation Development Office, formerly called the Intellectual Property Office, will administer the grants. A newly appointed technology development manager, Monique Yoakim-Turk, will work with members of the advisory board, who will also play a "mentorship role" by coordinating the projects between Children's, the investigators, and CROs, Children's said.
The tech-development fund advisory board includes:
• Dean Banks, CEO, Connective Orthopedics
• Alan Crane, venture partner, Polaris Venture Partners
• Russ Granzow, vice president of strategic business development, Phillips
• Stanley Lapidus, director/founder/chairman, Helicos Biosciences
• Larry Miller, founding partner, Mediphase Funds
• Stuart Pollard, vice president of scientific and business strategy, Alnylam
• Ken Rhodes, vice president of discovery neurobiology, Biogen Idec
• Jay Schnitzer, associate CMO and vice president, Boston Scientific
• Joseph Smith, vice president of emerging technologies, Johnson & Johnson
• Beverly Teicher, vice president of oncology research, Genzyme
• Josh Tolkoff, managing director, Ironwood Capital Management
• Daphne Zohar, founder, managing partner, PureTech Ventures
Halvorsen said that although members of the advisory board benefit by "being in the know" about new, cutting-edge technologies emanating from Children's research labs, they "will not get preferential access to technologies."
"We have a participation agreement, signed by all advisors, that very carefully manages any conflict of interest that may arise from their participation," Halvorsen said. "We went through this process, and considered saying that if someone sits on the advisory board, we cannot license the technology to their company or let them invest. But if we took that hard of a line, we'd be putting together a B-team advisory board."
Instead, if an advisory board member's company has an interest in licensing a technology, Children's "has to make the case they are the best potential licensee. And the person from the company must remove themselves from the process if we choose that route."
The Technology and Innovation Development Office first solicited Children's researchers in March and received around 30 applications for funding. These proposed projects have been whittled down to a "select group" of undisclosed applications, Halvorsen said, and that group is currently working on full presentations to make to the board in late June.
"We have a lot of good projects that need investment, but the unfortunate part is we have more projects than we have the ability to invest in," Halvorsen said, declining to disclose how many projects would be expected to receive funding. "But we won't be investing in any bad projects. The advisory board will have a great deal of discretion in terms of what is funded."
Should funded projects go on to be developed into a product, Children's has an evergreen mechanism in place to keep the fund going. Specifically, Children's normal royalty distribution policy awards undisclosed portions of the royalties to its inventors, the hospital department, the hospital, and the Technology and Innovation Development Office, to cover overhead. Halvorsen said that under the tech-development fund, the portion that would normally go to the hospital and half of the portion that would go to the department would go back into the fund.
"That said, and as I presented it to the hospital, if you do the math, this is year one," Halvorsen said. "The projects are meant to be a year long. If I am able to license a technology the very next day to a company, if it's a therapeutic, it's seven to 10 years before that therapeutic hits the market, and … less than 10 percent of them even hit the market.
"If you're talking about devices or diagnostics, it's a little bit shorter," he added. "But with all of that built in, we have a mechanism for this to be evergreen, but at best case scenario it's not going to be evergreen for 10 to 15 years."