Hi, and welcome to business concepts for
life sciences strategy course.
I am Deb Dauber, I have a PhD from UCSF
and I'm currently a competitive analysis consultant.
And I'll be taking you through part one of this
course. Here are the course objectives.
By the end of class today,
you should be able to
one, define strategy and how scientific
enterprises use strategy.
Two, identify the value proposition
of a scientific enterprise.
Three, determine key stakeholders
for a scientific enterprise.
And four, discuss how organizational context
impacts budget and resource allocation.
Let's start by defining what a scientific enterprise
is. For the purposes of this course, we'll be using
some scientific enterprise to describe both research
labs in academia, as well as companies in a business
setting, as an umbrella term. Because we know that
you're interested in both settings.
What is strategy? Strategy is a term
that's often used and rarely defined.
Either in the business setting or in
academia. Strategy is how a scientific enterprise
plans to conduct activities in order
to achieve a set of overarching goals.
Or put more simply,
strategy is where the enterprise would like to be
in the long-term and how they plan to get there.
The purpose of the strategy
is to help guide decisions, and establish
boundaries on the scope of work.
Or in other words, to make sure
that the day to day activities are
taking that enterprise in the right direction long-term.
Now strategy may be formulated
differently depending on the context.
So for example, in biotechnology, the strategy
will describe how the company plans to achieve
their clinical goals, as well as their financial
goals. Whereas in academia, the strategy
may determine what research questions the lab
wants to pursue and what grants they decide
to apply for.
There are two foundational concepts
to understand when thinking about
strategy. The first is value proposition.
The value proposition describes the technology
of that enterprise and the value that it has
within the market of that enterprise.
Second, organizational context describes the enterprise
itself, what are its capabilities, its structure,
its funding, et cetera.
What are the limitations of that
enterprise within the context of what they'd like
to get done. Together, these two pieces of
information drive the context in which
a company or enterprise can form a strategy.
I'm going to start by talking about value
proposition in this part of the presentation,
and then Sandy Ruggles will come in
and talk about both organizational context
and strategy in part two.
So let's talk more about value proposition.
There are three core questions that drive
the creation of value proposition.
The first question here is why?
Why is the work important?
What is unique about the technology or product being made?
And finally, who has a stake in the outcomes?
And importantly, what do those people value most?
Let's start with the why.
Why is the work important?
Well, ideally, a scientific enterprise
is looking to meet a market need.
That's a gap, that something is missing from the marketplace.
In the world of health, this could be a drug,
a disease that has absolutely no drug to treat it.
In the world of science, this may be an unanswered
scientific question. There are a couple different
forms of market need. One option on meeting
market need would be to meet an unmet need.
This would be an example, as I mentioned earlier,
a disease with absolutely no treatment available
today. Alternatively, the goal may be
to build a better mousetrap.
Perhaps there are treatments for that disease
today, but they're not very safe.
They cause toxicity and a company may
set out to create very similar drugs but with
less toxicity for the patients.
Similarly in the generic market,
a company may set out to make
exactly the same product that's available
already, but they can make it for cheaper,
they will sell it for cheaper, voila!
You have generic drugs.
Here's an example of a company that
was founded based on the why.
Why is this important?
Akashi Therapeutics is a very small
biopharmaceutical company that was
founded with the mission to develop treatments
for Duchenne muscular dystrophy and
other rare pediatric diseases.
Let me tell you about Duchenne muscular dystrophy,
it's a particularly debilitating form of this disease,
it's hereditary, and hits boys only. It puts them in a wheelchair
by their teenage years and they end up dying very
early. Currently the only treatment
for Duchenne muscular dystrophy is steroids,
which are not fun to take and also slow the disease
only minorly at best.
Akashi recognizes that this is a need and
their long-term goal is to be able to provide
better treatments, or even a cure, for Duchenne
muscular dystrophy. They're a why company.
Our second question is what.
What is unique about the technology?
Now the first question I'm going to ask about
the technology is, what is its efficacy?
Does it work? This is a critical question
and this is a pay to play question.
Because if the technology doesn't work,
the enterprise either needs to find
a new technology or shutter their doors,
because there's no progress forward with the technology
that doesn't work. Clearly.
But there are a couple other questions we can ask
about the technology that help you understand
if this is a good long-term strategy
or not. First of all, what's the potential
for portfolio growth?
Is this technology a single drug
to treat a single disease
that's never going to grow to be anything more.
That's a very small portfolio.
But the technology may be a platform
that can be used to develop many different drugs.
Or it may be one drug that once it shows proof
of concept can actually be used
to treat many diseases. Those are both
great strategies to build a larger portfolio
in the long run. The second question is
what is the competition today?
What other enterprises have similar technology
that may be used in similar ways?
And how do the technologies compare to
each other. Does the enterprise you're interested
in have a technology that's an advantage
in some way shape or form, relative to
its competition?
The third question is about barriers to
entry for future competition.
Does the enterprise have a patent
or a world expert or a trade secret
that makes it difficult for a future competitor
to come in with similar technology
and work towards the same goals.
Or, is there going to be competition in the future?
Let's take an example of a what company.
And here I'm going to look at Catalyst Biosciences.
Now you'll hear a little bit more about Catalyst later
on, because Sandy Ruggles worked there early in
her career. I'm just going to talk about when they were
founded. Catalyst was founded as a what company
with a technology platform of protease
engineering. Catalyst scientists believed they had
a great new technology that they could use
to engineer or select proteases to hit
novel disease targets.
They were founded as a technology company because
they were looking at a wide sort of diseases
with one kind of technology.
So we've talked about two different ways
to start building a strategy. One is a need
based strategy, or why.
And the other is a technology based
strategy, or what.
Whichever way an enterprise starts,
they need to ask both questions.
So a why company needs to get to the what
at some point early on.
And a what company needs to get to the why
at some point early on.
And both Akashi and Catalyst
should've done this.
So Akashi founded to find treatments for
Duchenne muscular dystrophy went out
and identified the rights to compounds
they felt would be promising treatments for
Duchenne muscular dystrophy and are now
working on developing those compounds.
Catalyst started with an interesting platform
to engineer novel proteases, reviewed a wide set
of disease states, identified those disease states
they felt would make the best targets for their proteases,
and are now selecting and developing products
in their market.
So we've been talking about the why
and the what, but those two together
are meaningless if you don't also think
about the stakeholders. Who has a vested
interest in the outcomes of the scientific
enterprise. And specifically, what do they value?
What's important to them?
As a little thought exercise, I want you
to take a few moments to think about
whether it be in a lab setting or a biotech setting
some stakeholders that have a vested interest
in the outcome of an enterprise.
If you've been thinking about an academic lab,
here's some example of stakeholders you may
have been thinking about. They range from students
in the lab to peer researchers outside of the lab,
all the way to granting agencies that fund the work
being done in the lab. And as you can see
in this slide, I've started to group the stakeholders
into sets of common interests.
For instance, students, postdocs, and lab managers,
can all be grouped together as employees of the lab
because they all have a vested interest in the overall body
of work being done in the lab, whether or not
they're doing every last little bit of the research.
I can even take a step bigger
and group these stakeholders into internal versus
external stakeholders, based on where they
are relative to the lab.
Now the grouping is really helpful because
as enterprise creates its strategy, it may not
want to develop a strategy for every single group
of stakeholders. By grouping, it can set strategies
for groups of stakeholders, instead. Making
the work a little bit simpler.
This complexity gets even more critical
when you think about pharma industry
stakeholders. As you can see on the lab,
it gets very complex. Now we still have
employees as a group on this lab. And we
still have funders, although on this slide, we're
now calling them investors.
There's still the people funding the work
being done in the lab. Now we have new
levels of complexity, and I want to really
zoom in on the customers
group of stakeholders. Customers for the pharma
industry could include providers,
patients, or payers. And each of those groups
have very different interests, with respect to
the company and the drugs it's selling.
And even within each of those
subcategories, I can divide it down further.
For instance, a provider could be a doctor
or a nurse, or it could be a pharmacist. Or a
provider could be a hospital or even a hospital
system. So you can see this group
of customer stakeholders is a very,
very complex set of people and as you might
imagine, pharma companies spend a lot of
time thinking about their strategy
with respect to each of those customer stakeholder groups.
Why do we care about stakeholders?
We care because it's their perception
of the enterprise and the work being
done that creates value. And each of these
stakeholder groups value things differently.
Let me start with patients, a drug company,
with the drug company as the enterprise,
the patient cares very much about the drug
that they're buying. They care about the efficacy
and safety of that drug. They care about the
convenience of that drug. And of course
they care about the cost and how much they
have to pay for the drug. Think about investors,
an investor cares about all those
things, but they care about it on the portfolio
level. They care about how robust is the
portfolio, how much revenue is the portfolio
bringing in today, and what's the stability
and growth of that portfolio long-term?
Employees on the other hand,
care in some ways about all of those things,
but they also really care about the mission
of the company and what is being done.
Because they spend a lot of time there,
so they want to be excited and proud of the work
that they do. They care about the culture
because they spend a lot of time at that company
every day. And of course, they care about
the long-term sustainability of the company, as well.
Because this is their livelihood and they want to
make sure they're going to be able to pay their bills
and take care of their family in the years to come.
It's really critical to understand
each of the stakeholders, think about what they value
and think about how to communicate with them,
when to communicate with them,
and what to communicate to them,
as part of an overall company strategy.
So, let me recap all the different
topics we've covered as part of the value
proposition. We've talked about why is the work
important. We've talked about what
is unique about the technology or
work product. And finally, who has a stake
in the outcomes of the work and what do they value.
Now some of you are interested in pursuing
careers in business, so I'd like to give you some advanced
topics, in case you'd like to do some more
research on your own after this course.
Much work is done in support of the development of
a value proposition, including competitive analysis,
market research, and stakeholder or customer mapping.
In addition, companies often use tools
such as the SWOT analysis
to consider their value proposition
and its strengths and weaknesses
both with respect to their competition, as well
as the market in which they're operating.
In addition, the value proposition itself
drives articulation of mission and vision,
product or brand positioning, and messaging.
All of which are really critical components
of that company's strategy.
Now I want to think, if you're moving into an
academic lab, there are a lot of parallels to
academia. So we're going to do a little thought
exercise, think about your academic lab
right now, and I'm going to pose you a few
questions. First, would you consider your lab
to be primarily need based or technology
based? Is it a why lab or a what lab?
Second, how do you think about the why's
and the what's of your lab's research program?
And third, who are the stakeholders that you think
about the most? And can you think
about ways in which you might address
different stakeholders in different ways in
different times?
This concludes part one of our course today.
Thank you very much for listening.