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get access to that data, to have the privilege to be in peoples’ daily lives and capture those insights in the least intrusive ways.
When I think about the number of times in a day, week, or month that I’ll disclose private information for some convenience… take Amazon, for example. I’m a voracious reader, I love a more filtered set of recommendations. It’s also a lot of credit card information; they know what I’m doing on my vacation.
Or, I’m in my car a lot. I’m willing to accept the fact that Waze [a traffic-report app] and Google know where I’m at 24/7.
X: So you weren’t surprised by the initial excitement to share personal health data through the Apple ResearchKit?
NK: The promise of better health care experience is an exciting one. It didn’t surprise me so much. That said, my jury is still out about how much true value is going to be delivered from aggregating and analyzing those data beyond the exciting novelty value.
X: During the recession, the mantra was that the biotech venture model was broken, and many VCs vowed to fix it by being more capital efficient. Has that actually happened?
NK: Inherently there has not been a dramatic transformation of the cost of drug discovery, or drug development, of going through clinical trials. It’s probably gotten more expensive, not less. Some of this is due to new technology: more diagnostics, data imaging, and data collection.
There have been efficiencies in the “data knowledge” economy, like research publishing more quickly, or more rapidly identifying the right patients, but the jury’s still out on the magnitude of savings.
X: It’s been a bad few weeks for the biotech markets. Is this just a political moment, or is the reality of drugs being too high priced finally sinking in?
NK: It’s hard for $40 billion of lost market value not to sink in. We need to focus on value and make value our test. That’s not something Martin Shkreli was thinking about, and it was a foolhardy thing to do. It’s certainly a trend or practice in the industry: companies that don’t have an R&D engine, that rely on creative marketing or commercial strategies. I’ve never been interested in investing in incremental therapeutic innovation. It’s not a great business model. I want to justify my returns on the basis of driving new therapeutic value. I don’t think you would argue it’s poor value when you’re delivering a life-saving antibiotic or gene therapy.
X: Wende Hutton said earlier this year that venture is still a boys club. How can you change that?
NK: I have my pet projects. One area is board cultivation, spending time and energy thinking how to cast a broader wider net for company boards. Bring more women into the boardroom; you can see more women in companies at the VP level but not in the “C-” suite, so that’s one strategy for tipping the gender scales on the industry side.
Often we (in the industry) set our criteria at a certain level of prior experience and seniority, someone who has been a CEO before. You’re less likely, then, to see many women in the mix. That’s a place to broaden the reach and get more inclusive candidates, even if you’re not going to get the experienced CEO.
On the venture side, it’s a vicious cycle: The fewer women there are, the fewer opportunities there are. It’s really a mentoring and apprenticeship business. Venture isn’t something people generally think about until later in careers, so perhaps we need to do more at the undergraduate and business school levels.
X: But the drug industry has a bad reputation in the general public. Does that make it harder to pursue mentorship, to convince younger people to go into a biopharma-related business?
NK: I know about those numbers for the general public. But if you talk about biotech to people in the Bay Area, Boston, et cetera, pharma is not vilified to the extent it is in the lay press. Biotechs are routine at the top of the lists of best places to work. It’s more about explaining to people inclined to work in the life sciences that venture is one of those areas.
To nurture the venture ecosystem you have to nurture new entrepreneurship, new leadership. I’ve spent a lot of time with the Kauffman fellowship program. I was mentee to SPARK and also to the StartX fund. I’ve also spent time with Springboard Enterprises and Blueprint Health.
X: Many life science venture firms couldn’t raise new funds after the recession, and it seems there haven’t been the same number of new firms emerging to replace them. What’s happening with traditional biotech venture?
NK: On the life science and pure biotech side, you’ve seen a concentration of capital under management, with fewer and larger funds. It’s about having the capital to weather tougher financing environments. The opposite of penny wise, pound foolish. Even with the huge correction the past 10 days, a lot of companies are well capitalized to fight not just another day, or month, but two, three, or four years.
There’s been creative work by pharma companies to be early stage participants, and entrepreneurs are cycling back [to startups] a second or third time, choosing to take earlier stage risk because of the excitement around the science. So companies are getting scaled up professionally—that is, with high quality people and assets.
There’s obviously been a huge amount of public crossover into private companies, and there’s no small amount of speculation there—trading on the expectation of quickly becoming public. But it’s been a wonderful spigot of capital flowing into the industry, and it has helped capitalize these companies to do their science and studies right, to prove their hypotheses and see if there are good new therapies to come to market. People are quick to talk about easy money, but it’s also incredibly smart money.