Lack of standards is still impeding preclinical deals

📈 A company like Formation Bio is reinventing clinical development right where it creates the most value: Phase 2, where you show that not only does your candidate not kill patients, it also meets clinical endpoints in a small patient population. That’s enough to boost the value of the asset considerably, where it can be picked up by a player that will run the larger, more expensive trials and possibly take it to market. 👏 So kudos to these guys for taking on a really hard problem where a disproportionate amount of value is created. One advantage of acquiring shelved post-Phase 1 assets is that public information is available and the preclinical package passed muster with the FDA to get an IND. So there’s that.

⚡ But sometimes a cleverly designed Phase 1 with the appropriate biomarkers can reveal efficacy, in which case the value creation migrates to the left, so to speak: acquiring and developing the right preclinical asset through Phase 1 can also generate a disproportionate amount of value.

🗝️ The key here is that there is no interoperable format for representing preclinical assets and, even if there were, a lot of that data/information is buried inside the vaults of pharma, biotech and academic organizations. Plus there are orders of magnitude more preclinical assets, most having incomplete preclinical packages. Finding the RIGHT preclinical asset to acquire or in-license with confidence is hard.

💡 But it is with that idea in mind that my colleagues Alph Bingham, Aaron Schacht and I published a short manifesto in Harvard Business Review in 2010. We advocated for a set of agreed upon standards for representing assets, a “common operating picture” that would enable a more efficient exchange of information and fuel asset transactions.

It is amazing how little things have changed. Formation Bio may be onto something by skipping the foggy preclinical world.