Why Investors are Speaking to Academic Scientists

26 Feb

By Max Klietmann, VP of Research, LSN

The academic scientist is playing a more critical role in the commercial life sciences space than ever before. This is due to the fact that large pharma is replacing early-stage drug development initiatives with M&A and in-licensing of technologies emerging from academic labs, strategic investors are aggregating early stage asset portfolios, and CROs are seeking to create relationships early to pre-emptively establish market position for the future.

It is obvious why early stage investors such as angels are interested in establishing dialogue with academic scientists, but even late-stage investors are in a continuous dialogue with academic scientists today. What makes this group of innovators so critical to the industry? Fundamentally, it is because they represent a crystal ball forecasting the long-term, groundbreaking industry trends that will affect the entire industry.

Academic innovation and commercialization are closer than ever, and this trend is accelerating. Academics were once all but irrelevant to investors because their work was often decades away from market potential, and most scientists didn’t care about or even consider commercializing their work. Academics wanted to be respected by other academics, and lived by the mantra “publish or perish.”

All of this began to change in the late 90’s, when a massive surge in academic publication occurred that led to a huge rise in patent registration around various technologies. This made investors suddenly aware that academic scientists were not just professors in labs trying to impress their peers – they were sources of deal flow/investment opportunities, market intelligence, and could point out disruptive technologies before they reached the “commercial realm.” The big pharmas, investors (early and late-stage), and even secondary constituents like insurance firms all maintain dialogue with academia precisely for these reasons. Academia is the industry’s oracle, and has the most future-oriented perspective on emerging trends in the space.

The line between academia and commercialization is blurring and the two, once-disparate realms are becoming tightly intertwined. As such, creating relationships with academic laboratories and innovators is a critical piece of market intelligence for all constituents in the space. Creating strong relationships with research institutions will be a vital to the adroit navigation of an increasingly complex space moving forward.

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