Time to value and biotech: to be or to take decades?

The long game of biotech and the shortcuts we’re not thinking of.

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There are many factors that shape startup’s valuation. To name a few: technology, intellectual property (IP), stage of development, market and revenue potential, team, funding history, partnerships, and collaborations. In biotech, we also have to consider regulatory pathways, market readiness, and clinical trials.

But recently, I came across an article and a few case studies talking about another metric: time to value.

At first, I brushed it off. Biotech is a very, very long and risky game. You’re lucky if the product reaches the market at all. Talking about time to value just didn’t seem applicable.

But then I looked at it from a different perspective: are there other ways biotech startups can deliver value as they develop their drugs and platforms?

Why would that be an interesting exercise? Well, who wouldn’t want an extra revenue stream and some brand- and trust-building activity along the way?

Without further ado, let’s play with time to value.

What is time to value?

Time to Value is a metric that considers the amount of time required after starting to use a product for the user/customer/buyer to begin experiencing meaningful results,” - Aaron Dinin, PhD in A Powerful New Metric for Evaluating a Startup’s Potential for Success

In other words, how fast can your customers derive value from your product?

The faster they get the value, the more satisfied they feel and the less questions they have if it was worth their time or money. No surprises here.

From an investor’s perspective, the longer the time to value, the more capital is needed. The more cash is needed, the more funding rounds and equity dilution is going to happen which makes everything riskier.

Ok, also no surprises here.

The biggest question is: “How can one decrease time to value?” You create something that isn’t a product, but serves your customers and supports the main value proposition. For example:

  1. You can create a community. The fancy name for it is social engineering.
  2. You can gate some of your content or capabilities, call it a membership, and charge money for that.
  3. You build anticipation and educate your audience with emails, updates, and guides.

That’s all great, but creating a membership program to receive a cancer drug deserves to be a plot of a dystopian sci-fi book, not a pitch deck.

So how does any of that relate to cash-intensive, high-risk biotech?

Development cycles take decades. Getting approvals and complying with regulations is a pain. Selling cycles are long. Drugs take some time to show significant improvements in patients. There is pretty much nothing one can do to speed it up.

Unless instead of asking the regular startup question “How can I speed up time to value?”, you ask a different one.

Are there other value channels to support our ongoing development?

A good place to start would be to frame a question or a problem your customers face. What causes them pain?

Here are some examples:

  • We need to capture more and better quality data;
  • We’d like to enhance the patient’s experience;
  • We need to improve participation in clinical trials;
  • We need to streamline processes;
  • We’d like to manage symptoms better;
  • We really need to get consents faster.

A key thing to remember here is that patients are only part of your target audience. Another part consists of healthcare providers.

Many of those things above can be solved with quite simple and available digital solutions – as simple as websites and apps.

Does solving those pain points go against your core mission? I doubt that. But they can add a layer of value to patients, hospitals, healthcare providers, and to your startup.

Let’s take a look at the patient engagement.

Increase patient engagement

Let’s massage increasing patient engagement as an example. What does one need to address this challenge?

You could streamline communication between patients and investigators. Solutions as simple as secure messengers and patient platform can do that.

You could facilitate a flow of relevant and contextual information. Partner with a relevant IT company. That’s solved with some data capture and UX.

What about supporting clinical trials and improving the quality of results? You can offer complimenting visits to sites, tele-visits, and in-home solutions:

  • at-home lab diagnostics can help track and ship supplies;
  • better coordinated nurses visits can increase the quality of care;
  • connected devices can asses patient’s health in real-time. Think of sensors, wearables, blood pressure monitors, glucose monitors, imaging, spirometry.

The great thing is that they all already exist so you can either partner or re-invent a simpler wheel.

Supporting with clinical trials

Clinical trials involve a lot of challenges. Some pain points are:

  • discovery and selection of the trial;
  • patient recruitment and engagement;
  • data collection.

But their challenges are opportunities for technology to solve. It doesn’t need to be complex and a lot has already been created. The question is finding an application for it that is right for you.

To give you an example, let's look at discovery and selection.

It's a big struggle for people to find the right trial. It's unbearable when it's a health emergency. And when they find one, they have to figure out a maze of approvals and criteria boiling down to if they are dying slow or fast enough for this particular trial. Sorry, bad joke, but you get the point. That's patients' side.

In the opposite corner, we have trial providers. They struggle with identifying patient’s populations for marketing. Then they need to explain the trial requirements and gain consents.

Now, if you were in marketing, discovery is the domain of search engine optimization (SEO). To be discoverable, you create content that offers solutions: useful links, directories, or available contact info.

Solving this issue doesn't require building a product – just writing content.

Requirements and approval are UX issues. How efficiently can they receive the needed information?

Consent and compliance is the question of choosing or developing the right tool. In a nutshell, trials can be improved with SEO and UX.

Now let's take a look at some examples.

Symptom-tracking app for pharma

Take a look at this case study shared by Irrational Labs.

Irrational Labs created a symptom-tracking platform for a large pharma. There are tons of trackers and templates to build from so that was far from being a new idea.

But what they did was they used behavior science to improve the process and the quality of input data:

  • They created a two-tier symptom reporting: they simplified the process of reporting symptoms in the moment, and they kept a longer survey for a weekly reporting.
  • They infused a weekly reporting with patient's history.
  • They rewarded people for logging symptoms. It took a shape of advice on symptom management from similar cancer patients. That tapped into developing a community and establishing a sense of belonging. Community is a value driver on its own.
  • They incorporated reminders from family members and doctors to encourage logging in symptoms.

That made the tracker deeply valuable: it was custom to that specific group of patients.

No magic or complex tech. Just understanding the user and applying some behavioral nudges. The outcomes are: better patient support, better data, and, in the long run, better drugs.

In other word, better serving patients and more revenue.

23andMe

When I wrote this article 23andMe wasn’t bankrupt. I wrote it and didn’t publish it. Why? I got busy. Happens to anyone. Although 23andme isn’t the best role model at the moment, there are some useful insights and things to learn from. So I still decided to keep them here.

Now, 23andMe is a great case to reverse engineer. What could a drug discovery do on the side to generate more data, more money, and more opportunities to pivot?

23andMe started as affordable testing kits (although, not from the beginning). Those kits helped customers learn about their health ancestry. But with all that spit in their mail, they ended up collecting an enormous amount of human data. Now, they could use it to develop drugs.

Why not flip their approach? Come up with a kit or a product to gather data for the research. It's interactive and fun for the user, and valuable to the company. Developing a kit doesn't have to take a decade and it can bring revenue faster. Consider it a short-term project in your pipeline for business continuity.

There is a podcast on their journey by Sequoia Capital on 23andMe journey that is worth checking out.

Key takeaways

So, going back to the question above, what could be additional sources of value in biotechs and drug discovery:

·      Symptom trackers

·      Communities and support groups

·      Diagnostics tools

·      Digital health trackers and monitors

·      Telehealth and remote monitoring solutions

·      Collaborative research platforms

·      Sites to navigate clinical trials

·      Consent tools

·      Tools to improve data collection

·      Solutions for better communication between patients, doctors, and investigators.

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