When Scientists Become Social Entrepreneurs

21 January 2012
Posted by Julia Fan Li.

Academic pursuit in the search for greater knowledge has always had an uneasy relationship with business.  Should scientists be concerned with applications and impact of their research on society? But what if this greater knowledge has a direct therapeutic application that can help solve unmet medical need?

For many scientists working in the life sciences at the boundaries of bench and bedside, translational science can easily combine with entrepreneurship.  In the last three decades, scientist-entrepreneurs such as Dr. Herbert Boyer (pioneer of synthetic insulin and human growth hormone using genetically modified bacteria) and Nobel Prize Winner Dr. Donald Glaser (physicist turned molecular biologist) went on to found Genentech and Cetus Corporation respectively, vanguards of the growing the biotechnology industry.

By advancing genetic engineering technology and innovation within commercial ventures, the biotechnology giants brought society therapeutic products such as insulin for diabetic patients and monoclonal antibodies to fight against a variety of cancers including personalized medicine for breast cancer patients.  Howard Stevenson, Professor at Harvard Business School, defines entrepreneurship as “the pursuit of opportunity without regard to resources currently controlled.”

This definition also applies to scientist-entrepreneurs.  Research scientists may not always have the available resources (or inclination) to take a promising drug candidate through the lengthy process of clinical trials and regulatory approval, but they often partner with external resource providers such as investors and venture capitalists to develop an innovation from initial through proof-of-concept, to development and finally to delivery to patients.  The subsequent organizational form of this investment in innovation is to take the idea and incorporate it into a business venture.  “Impact” in academic research and business is measured differently and the speed of innovation, as put forth by innovation scholars such as Schumpeter is greatest when pursued by entrepreneurs who can harness the powers of “creative destruction” brought along by technological innovation.

If innovation is faster in an entrepreneurial firm and the firm has access to more external resources, there is an underlying assumption that the invested resources are using market discipline to enforce an economic return from the investment.  The commercialized products from the biotechnology industry, although meeting unmet medical needs, do not come cheap.  Biomedical innovations are usually under strong patent and intellectual property protection allowing for commercialized products to enjoy monopoly pricing for a number of years.  The profits of the firm are then distributed between the shareholders and re-investment into further research & development for new biomedical innovations.  The traditional biotechnology business model requires that patients are able to pay for the innovations to realize the benefits of better health.  But in light of the United Nations Millennium Development Goals and the four billion of the world’s population who live in middle and lower-income countries, what happens when the patient cannot afford to pay for the therapy?

The Global Forum for Health Research attributes 90% of global health expenditures to serve only 10% of the global disease burden and is concentrated in rich countries.  Macroeconomists who study the development of nations have long recognized that poor health directly decreases productivity and is a leading contributor to the perpetuation of the poverty cycle.  Can scientist-entrepreneurs also help innovate for the poor? Over the past decade in an effort to achieve the UN Millennium Development Goals (four out of eight which are focused on health), new momentum has been spurred into R&D on tropical and neglected diseases that primarily affect poor countries.

Dr. Helen McShane is a Professor of Vaccinology at the Jenner Institute at the University of Oxford and leads the tuberculosis (TB) vaccine program.  MVA85A, the original new TB vaccine was developed by Dr. McShane during her PhD and was the first new TB vaccine to enter into clinical trials in 2002.  This entry into the clinical phase past the laboratory was a big step as the original TB vaccine and the current gold standard utilized around the world to vaccinate children is the Bacillus Calmette-Guerin (BCG) vaccine and was first designed and commercialized over 100 years ago.  Tuberculosis, an infectious bacterial infection, although largely eliminated in the UK, is still a killer of 1.8 million people a year, mostly in cramped urban areas of developing countries.  To progress clinical studies of vaccine safety and efficacy past Phase II, the University of Oxford entered into a joint-venture structure with Emergent BioSolutions (a publicly listed biotechnology company on NYSE) to form the Oxford Emergent Tuberculosis Consortium (OETC).  OETC has also assigned commercializing rights of any resulting product in the development world to AERAS, a global non-government organization focused on TB vaccines and the ability to distribute the potential vaccine for as low price as possible. 

Half way across the world is another scientist-entrepreneur working on TB vaccines, Dr. Li Zhongming, Founder & CEO of Shanghai H&G Biotechnology Ltd.  Instead of a prime-boost strategy utilized by Dr. Helen McShane, Dr. Li employs another mode of biomedical innovation in efforts to design a therapeutic DNA vaccine for the treatment of multi-drug-resistant (MDR) TB.  Dr. Li is a Chinese medical doctor, and completed post-graduate studies in the US.  He remained to work for the US Food and Drug Administration for 10+ years on infectious diseases.  In 2003, inspired by a Nature paper on the potential immunotherapy of DNA vaccines against TB[1], Dr Li returned to China to start his biotech venture and states “my goal is to make affordable vaccines for the masses.”  Dr. Li’s company, like OETC is part of the Global Stop TB Partnership.  In the global fight against this infectious killer, the Stop TB partnership, housed at the World Health Organization plays a coordinating, advocacy and oversight role for the global TB vaccine R&D pipeline. 

Although OETC and H&G Biotech are two companies concentrating on tuberculosis, the two companies are funded very differently.  OETC is headquartered in a developed country and is funded partly privately, but relies on two donor organizations, Wellcome Trust and AERAS to fund clinical trials currently being conducted in South Africa.  H&G is headquartered in a developing country, where TB is still considered a high-priority public health problem.  It is one of three infectious disease placed high on the government’s federal agenda.  Therefore, its primarily funding is derived from government grants in the 5-year Chinese Strategic Plans.  H&G also collaborates heavily with government-sponsored research laboratories and biomedical incubators set up through strong Chinese industrial policy.

So are Dr. McShane and Dr. Li the new faces of biomedical social entrepreneuralism? Is there even such a term? Social entrepreneurs are defined as creating “new models for the provision of products and services that cater directly to the basic human needs that remain unsatisfied by current economic or social institutions”.[2]  Up to now, no new TB vaccine has been developed for over 100 years and with over 9 new million cases of the disease each year and on average 4900 deaths per day[3], most would agree the severe lack of biomedical attention and innovation in this area is unacceptable. 

I would argue that yes, Dr. McShane and Dr. Li ARE social entrepreneurs.  Although unconventional, their business models are attempting to reconcile the challenges of innovation with access and cater to patient needs.  They also fall under the larger umbrella of entrepreneurs in general, and per the definition above, are continuously in “pursuit of opportunity without regard to resources currently controlled”.  Unlike entrepreneurs who already have existing products, both entrepreneurial firms face challenges in obtaining technical and market resources.  First, the science behind TB vaccines is uncertain and difficult and second, upon commercialization who will pay for the product and at what prices? – these are also questions with uncertain answers. 

However, just because uncertainty exists, it does not mean we can stop innovating. It just means we have to work a bit harder – and simultaneously on the biomedical innovations as well as the business model solutions that link supply and demand. Academia (in the life sciences) needs to have a relationship with business and business in turn, needs to have a relationship with people...


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