Intellectual property, regulations, and attorney fees
Boston, an area of 124 square kilometres has a remarkably large number of attorney firms with new firms established frequently. One would wonder how so many lawyers could be established in such a small space and still be profitable, but when one looks deeper into the Boston biotech ecosystem, the reasons become rather obvious. This is because in an area of just over 124 square kilometres, there are at least 900+ companies with some big brands such as Vertex established here.
Moreover, in the same space are 8 research universities and 46 other institutions of higher education, including some of the Ivy League universities like Harvard, MIT, etc. all creating a critical mass of intellectual capacity for innovation. Insight into an incubation space at Harvard revealed that of the 16 companies incubated to date in the biotech industry, 14 have seen relative levels of success and raised over $28 million in seed funding from Venture Capital Funding. Therefore in such an ecosystem, law firms have ideally positioned themselves to provide services such as IP protection, VC investment fundraising, collaboration agreements, license agreements, mergers and acquisitions and for those that make it big, IPOs.
For some of these firms, the model is rather simple: attorney fees are paid when the company has made it rather than during the start-up phase of the company. This model is welcome to start-up companies that do not necessarily have funds to pay for attorney fees in the early stages of development. Our team was privy to some of the key issues that start-up companies in the biotech space should be cognizant of, especially at inception phase. The first of these is the value of IP. It was made very clear that in the biotech space, it is very difficult to succeed if your technology cannot be patented, therefore scientists and inventors must be careful on what they disclose in publications. This is of course not to undermine the value of peer reviewed publications in support of both technology and career development. Secondly, it is very important to ensure that collaboration agreements are in place from the onset where multiple partners are involved with clear terms of the collaboration stipulated. Similarly, where a technology is taken from the university, the license agreements should be in place with clear terms and conditions negotiated before the technology is transferred. Aside from IP is the issue of raising capital, and the Boston area is second in the US in terms of deal flows in the Venture Capital landscape.
One observation in this landscape is that the majority of the deal flows are towards technologies in therapeutics while diagnostics falls third or fourth down the line. This is a key consideration, particularly for innovators in this sector who may seek Venture Capital Funding in the United States. It must be noted that Africa has some unique challenges, and investments in technologies that address these challenges are likely to happen with investors that have a good understanding of the African landscape, as at a global scale the market for some technologies may not be big enough for investors.