Chapter 11

Technology Opportunities:
Evaluating the Idea
Craig Shimasaki, PhD, MBA
CEO, BioSource Consulting Group and Moleculera Labs, Oklahoma City, OK, United States

Chapter Outline
Sources of Biotechnology Product Ideas 152 Is Product Development Feasible Using Today’s
Research to Commercialization Chasm 152 Knowledge and Systems? 157
Technology Transfer Offices Manage Large Portfolios of Is This a Single Product or a Core/Platform Technology
Intellectual Property 152 with Multiple Products? 157
So Why the Gap? 153 Evaluate the Product’s Market Potential in the Best
Experimental Paths: Basic Research Versus Translational Market Application 158
Research 154 The Technology Must be Directed Toward a Market
Technology is a Solution Seeking a Problem to Solve 154 With the Greatest Unmet Need 158
How to Determine if a Product Concept is Worth Pursuing Is There Market Demand That Is Not Met or Addressed
as a Company 155 with Substitutes? 159
Three Initial Criteria for Assessing Technology Product How Big is the Estimated Market for This Product? 159
Opportunities 155 Don’t be too far Ahead of the Market Need 159
Initial Assessment Criteria for Technology and Product Is the Target Market Highly Competitive With Minimal
Concepts 155 Differentiation Between Products? 160
Evaluate the Underlying Science and the Technology Team 155 Is there a Reimbursement Pathway for the Product
The Quality of the Underlying Science is Foundational 156 that is Readily Available and Accessible? 160
The Quality of the Researcher and the Technical Team 157 The People Factor 160
Be Sure the Underlying Biology of a Disease or Condition What to do Next? 161
is Sufficiently Understood 157 Summary 161
Reference 161

Entrepreneurs in the biotechnology industry build compa-
nies based upon novel technologies that yield products
they believe will be successful in providing value to a
specific group of individuals. There are also venture capi-
tal firms that have a specific focus on identifying novel
technologies in which they utilize to form start-up compa-
nies themselves. How do they choose which technology
concepts and product ideas may be destined for success,
and which ones to reject because they may not be future
winners? The answer to this question is important for
entrepreneurs, company leaders, and managers when
determining which ideas have the best opportunity for
success. These decisions have long-term impact because a
group of individuals will then commit an enormous
amount of time and resources to the development of this
product concept. The information in this chapter will pro-
vide you with a framework to more effectively evaluate
new product technology ideas and understand how to
assess their likelihood for future commercial success. If
you are an entrepreneur who is looking to license technol-
ogy from an academic institution, or if you are a professor
or postdoc wanting to know whether your discoveries are
viable for starting a company and developing a desirable
product, this chapter is for you. If you are working in an
academic technology transfer office (TTO), this informa-
tion will help you evaluate the potential opportunities you
have in the pipeline and recognize which ones may, and
may not be strong enough to go very far.
When one evaluates technology, an internal analysis
must take place to determine whether or not the

Biotechnology Entrepreneurship. DOI: https://doi.org/10.1016/B978-0-12-815585-1.00011-5

Copyright © 2020 Elsevier Inc. All rights reserved. 151
152 SECTION | IV The Innovative Technology Component
technology product concept is more than just a good
research project but has potential as a valuable product.
Any technology evaluation process must include an exam-
ination of the soundness of the science, an appraisal of
the supporting scientific and medical literature, and an
evaluation of the scientific and technical team who will
be participating in the early development of the product.
If the underlying technology and product concept is not
sound, no amount of marketing, capital, and team talent
can overcome flawed science. The research and discover-
ies that support the product concept must be able to stand
up to criticism, naysayers, and pessimists, all of whom
predictably appear when individuals move forward with a
new idea. In order to complete a technology assessment,
it must also include more than just an examination of the
technology and the research team. Once the underlying
science is validated, before proceeding further, one must
also evaluate whether or not this product concept will sat-
isfy an unmet market need.
Sources of Biotechnology Product Ideas
The majority of innovative biotechnology products can be
traced back to basic research that began at an academic or
research institution over the course of several years, possi-
bly decades. If you examine the original source of most
successful biotechnology products, you will find that the
vast majority of them originated from the basic research
conducted by a scientist, professor, physician, or engineer
at an academic or research institution. This is true because
a fundamental goal of institutional research is the acquisi-
tion and discovery of new knowledge. Basic and aca-
demic research focuses on exploring new ideas, testing
new concepts, and better understanding previously
unknown processes in biology, science, and engineering.
Unfortunately, for the commercially minded, academic
research objectives rarely include product development or
commercialization goals. As you will learn in the subse-
quent chapters about licensing and technology transfer
processes at universities, increased efforts are being made
to advance basic research ideas toward the early stages of
product development while they are still at these institu-
tions. Nevertheless, academic and research institutions do
not typically possess the depth of expertise in biotechnol-
ogy product development and often are not well equipped
or experienced in assessing the potential for which tech-
nology concepts may become blockbuster products. Very
few products have been fully developed within academic
and research institutions. This is because their goals are
not the same as in industry, and they possess limited
experience in moving product concepts efficiently to
product development and precommercialization proto-
types. As a result, many good technology product con-
cepts accumulate but lay dormant at these institutions.
Research to Commercialization Chasm
A great chasm exists between the large body of excellent
research conducted within the laboratories of academic
and research institutions, and the translation of these ideas
into commercial products. One reason for this chasm is
that basic research expertise and commercialization
expertise are segmented, and the interface between these
expertise holders is rarely linked. While the best scientific
research is most often conducted at top-notch academic
and research institutions, the finest product development
work is most often performed in the commercial enter-
prises. These entities operate independently of each other
and rarely overlap in any cross-functional way, and cer-
tainly not on a frequent basis. Due to this segmentation of
expertise, knowledge and ability, academic institutions
may have as much as 75% 80% of their entire patent
portfolio sitting on their shelves with no commercial
entity showing interest in these assets. During this time,
these institutions pay patent prosecution fees on pending
applications and maintenance fees, translation fees, and
taxes on intellectual property (IP) that remains on shelves
unrecognized and unlicensed.
Due to this chasm and the abundance of technology
opportunities, academic and research institutions are the
best places for entrepreneurs to uncover myriads of great
ideas for future biotechnology products. For those inter-
ested in pursuing a path of biotechnology entrepreneur-
ship, one great way to “discover” potential product ideas
is to talk with the staff and management in TTOs at vari-
ous academic and research institutions, including federal
laboratories. There you can find some of the best life sci-
ence, agricultural, and biofuel research being conducted.
These institutions have numerous product opportunities
for entrepreneurs who have the skill, seasoned experience,
and drive to forge company opportunities based upon
these technology and product concepts. When approach-
ing a TTO, be sure to define the technology areas or mar-
ket opportunities you are interested in and the fields
where you believe you can recruit experienced help for
your product development.
Technology Transfer Offices Manage Large
Portfolios of Intellectual Property
Although every academic and research institution and fed-
eral laboratory will admit that a chasm exists, it is not
necessarily because the TTOs are not actively soliciting
potential suitors for their portfolio assets. Stanford
University owns the IP that became “Google” and in the
early days attempted to out-license this IP to many of the
web companies over a period of time. The inventors, then
graduate students, Sergey Brin, and Larry Page, were
completing their PhD work and realized that none of the
 Technology Opportunities: Evaluating the Idea Chapter | 11
likely industry players were interested enough to license
the IP. These inventors decided to commercialize the
technology if no one else would. The TTO said that they
were willing to grant a license, but they felt that the pair
did not really know much about commercialization. These
two nascent entrepreneurs learned some things along the
way, and we all know the rest of the story.
Licensing offices at research and academic institutions
are recognizing what methods work most effectively for
out-licensing more of their technology assets. Stanford is
one of the more prolific institutions in successfully licens-
ing its technology and IP to commercial entities. It is
interesting to note that Stanford’s Office of Technology
Licensing (OTL) employs mostly technical staff with
backgrounds in industry and often individuals with MBA.
The J.D.’s they have on staff appear to be managing con-
tracts rather than negotiating licenses. It has been said of
the Stanford’s OTL office that while outside legal counsel
is available, such oversight is not required if an agreement
does not deviate from the university’s standard practices
of granting no warranty on an invention and total indem-
nification by the licensee. Ms. Katherine Ku has been the
director of the OTL since 1992. She came from a small
biotechnology company, and most of her associates have
similar backgrounds. She has been quoted as saying, “We
feel we are a marketing office, not a legal office.” The
technical background and training of her staff have been
effective in negotiating licensing agreements because suc-
cessful negotiations require an understanding of the tech-
nology. Several video lectures are available on the
Stanford eCorner, which are helpful for other TTOs look-
ing for help in building a successful TTO model.1
In an article by Fisher [1] about TTOs, Jeffrey
Labovitz, who was the acting director of technology
licensing at the University of California at San Francisco
at that time, said, “A lot of technology-transfer offices are
built around patent attorneys, and they lead with the
agreement, as opposed to the deal, so it is very hard for
them to negotiate. Deal-making is very much a creative
endeavor, so the more you know about the variables, the
more creative you can be.”
So Why the Gap?
I believe that there are many reasons for the accumulation
of IP at academic and research institutions in addition to
those we have discussed. These include the following:
1. Seasoned entrepreneurs who possess the ability to
build a company around a technology may shy away
from licensing an academic institution’s IP because of
the perceived, or real, issues that hamper their ability
1. ,https://ecorner.stanford.edu/. [accessed 12.02.19].
153
to quickly and economically license a technology
from the institution.
2. The most likely licensee organizations for these patent
assets may not be interested in acquiring outside tech-
nology because they have already devoted internal
research and development (R&D) resources toward
internal projects that already address their market
interest.
3. Industry executives may not be aware of the diversity
of IP opportunities available in academic, research,
and federal laboratories, or they may not be willing to
pay a license or royalty on future products that their
company would commercialize.
4. The IP assets are based upon excellent technology
concepts but the product application chosen and tested
by the scientist, engineer, or physician is not the ideal
market opportunity due to existing competitive pro-
ducts in that market.
5. The TTO has the bulk of their resources focused on
prosecuting patents filed with the Patent and
Trademark Office and they have limited resources
remaining to find and solicit licensees for the IP tech-
nology they have.
6. The TTO may not have the resources or budget appro-
priations to hire the type of staff with the skills and
expertise, or their current staff may not have the lib-
erty to effectively negotiate deal structures that would
attract the type of licensee partners needed for their
assets.
7. Many first-time entrepreneurs who may be interested in
the IP assets do not have the skill set and experience to
proceed with commercialization and may not demon-
strate enough know-how for the institution to confi-
dently license the technology to these individuals.
Due to these and other issues, the chasm remains.
However, more TTOs are working to address these issues
and facilitate the licensing of more of their IP assets to
the best suitors. The issues still remain, so the commercial
entities and entrepreneurial teams must avail themselves
to these untapped opportunities because they possess the
greatest ability to commercialize products from these IP
assets. Together, the academic institutions and commer-
cial entities and entrepreneurial teams must develop
financial models that make licensing IP assets a viable
alternative to conducting all of their own internal R&D. It
is also helpful for entrepreneurs who are seeking to
license technology from a particular institution to become
acquainted with the individuals who are responsible for
licensing technology. It is equally important for the poten-
tial licensee to outline their product development plans
for the TTO as to how they intend to move a licensed
154 SECTION | IV The Innovative Technology Component
product concept toward commercialization. There are
plenty of good product ideas waiting for good homes, and
TTOs will be receptive to hearing from entrepreneurs
who have credible commercialization experience and
strategies.
Experimental Paths: Basic Research
versus Translational Research
It is important to recognize that research conducted at
academic research institutions by nature has a different
goal than translational research performed at a biotechnol-
ogy company. Academic research is performed for the
purpose of gaining new knowledge, publishing discover-
ies, and securing grants to support further research.
Whereas, the translational research conducted at compa-
nies is to develop a useful product. To casual observers,
academic research experiments can appear, on the surface,
identical to the translational research in commercial labo-
ratories. However, the basic research and translational (or
applied) research programs differ markedly in their deci-
sions on the types of experiments to be conducted and the
time spent on a particular experimental direction. For
instance, in basic and academic research, a team may dis-
cover a new mechanism for cell signaling that triggers a
unique inflammatory response. Future research choices by
the academic research scientists may include identifying
the receptor, determining the crystal structure and protein
sequence, elucidating the triggering mechanism for stimu-
lation, and uncovering the precise stepwise cascade
involved in this inflammatory process. However, the ulti-
mate experiments for industry researchers would be to
screen chemical compounds that inhibit this inflammatory
process for the development of drugs to treat rheumatoid
arthritis or other inflammatory conditions. The industry
researchers conduct similar types of experiments as aca-
demic researchers, but the underlying purpose is differ-
ent—whereas they can use this knowledge to ultimately
produce a product. Due to the difference in goals, the
entrepreneurial team or evaluator of a technology must
see beyond the actual experiments and look for the best
commercial application of this research. For instance, if
TABLE 11.1 Basic research versus translational research.
Basic research
Driven by Curiosity and questions
Motivated by Expanding and acquiring knowledge
Questions answered How things work, why things work
academic research has uncovered a new biological mecha-
nism of action, ask youself the question, what potential
applications would this mechanism-of-action have in
other disease conditions, diagnostics, or new medical
devices? In other words, what other applications can this
discovery be applied toward?
Although all academic universities and research insti-
tutions have large IP portfolios that are idle, the research
that underlies this IP is not necessarily idle. It is the com-
mercial development of the product that is idle because
the scientist or the professor will likely continue their
focus on more basic research to uncover new discoveries
and to better understand the science. This is where crea-
tive and experienced biotechnology entrepreneurs come
in. There are vast technology opportunities housed within
great academic institutions awaiting entrepreneurs who
have the creative skill, technical expertise, and market
understanding to develop desperately needed products.
This academic research resource can be a treasure chest
laden with valuable future biotechnology products (see
Table 11.1).
Technology Is a Solution Seeking a
Problem to Solve
Successful biotechnology entrepreneurs appreciate great
scientific research, but what they keenly understand is
that technology is simply a solution seeking an important
problem to solve. If the problem that the technology can
solve is extremely significant, there will be great interest
from customers if this is a truly unmet need. If the prob-
lem this technology solves is minor and insignificant,
there will be limited customer interest. Most people are
amazed by the remarkable advances achieved in any field
of technology. Moreover, it is true that sophisticated,
leading-edge technology can enamor us with its novelty,
complexity, and the amazing things that it can achieve.
However, entrepreneurs must be cautious not to be overly
charmed by the technology and forget that the most criti-
cal aspect of any product’s value is the problem that it
solves. It is helpful to keep this in perspective by realizing
that the customer is not principally interested in the
Translational research
Developing useful products or services
Solving practical problems
What inventions can be made with this knowledge
 Technology Opportunities: Evaluating the Idea Chapter | 11
technology or scientific method of how their problem is
solved, just that your product delivered its promise and
their problem is solved.
How to Determine if a Product Concept
is Worth Pursuing as a Company
There are many technology projects that are worthy of
consideration. These projects usually have a product con-
cept in mind that may have some value. However, the
entrepreneur must determine if this is simply an interest-
ing research project or can this product idea establish the
basis for a viable company. A research project will be
considered successful if the research idea is novel and the
technology is interesting enough to be funded. These cri-
teria are not enough to consider a company successful.
Although the company’s product development must also
be funded, the resulting product must also provide enough
value to a target market of customers such that they
would gladly purchase it and use it. Regrettably, some
young biotechnology companies are founded with the
belief that success will follow if the research idea is novel
and the technology is interesting enough to be funded.
The criterion used for determining a successful research
project is not the same criterion required for building a
successful company. Research projects are considered
successful if they achieve their intended specific aims,
whereas companies are only successful if they produce
products that are successful in the market—these ultimate
goals are different. The decision for the biotech entrepre-
neur is to carefully assess the product idea and determine
whether it is simply a good research project or if it can
become a great company. Properly assessing the technol-
ogy is critical as once this is done the technology will-
move into product development, which will either result
in “doing things right” or “doing the right things.” In
other words a company can be established upon any
research project concept, but if the resulting product idea
has limited market value, no amount of “right” method
development or “right” project planning can solve the
absence of a true market need for the product.
Three Initial Criteria for Assessing Technology
Product Opportunities
The biotech entrepreneur must carefully evaluate (1) the
underlying science, (2) the future product concept and the
best market application, and (3) the people factor, which
will be discussed at the end of this chapter. A scientific
assessment of the technology is the first critical step, and
it is the foundation upon which a future company will be
built. If the science is not sound then no matter how great
the market interest is for such a product, it cannot be
155
delivered. However, scientific assessment by itself will
not predict the likelihood of product success. One must
also evaluate the market potential of a product in order to
determine if it has a basis for a viable business. Initially,
the following criteria should be evaluated when consider-
ing a product concept or a technology license from an
academic institution. The evaluation of future product
concepts must not end with only these two criteria but
incorporate additional factors such as the company busi-
ness model and the five criteria for assessing a company,
which are discussed in Chapter 12: Understanding
Biotechnology Business Models and Managing Risk.
However, these criteria should serve as the basis for the
initial assessment of the science and product concept.
Initial Assessment Criteria for Technology and
Product Concepts
1. Evaluate the underlying science and the technology.
2. Evaluate the product’s market potential for the best
market application.
3. Evaluate the people factor (see Fig. 11.1).
Evaluate the Underlying Science and the
Technology Team
What aspects of the science and technology make it worth
creating a company to support the development of this
eople
The p
fa tor
c
t
arke
uct m
Prod tential
po
g
rlyin
Unde ce
scien
FIGURE 11.1: Three initial assessment criteria when evaluating tech-
nology product concepts for licensing.
156 SECTION | IV The Innovative Technology Component
product idea? I believe that there are several qualities that
help determine a technology’s viability as a product con-
cept. These include
G
the quality of the underlying research and the technical
team involved;
G
the breadth of scientific information understood
about the disease or condition, or the biological
certainty of the targeted application for the product;
G
whether or not the product is capable of being devel-
oped within the knowledge and systems available
today; and
G
whether this is a single product idea or a platform
technology with multiple future product applications.
The Quality of the Underlying Science Is
Foundational
A thorough evaluation of the quality of the science and
the underlying research is critical before making a deci-
sion to license or move forward with any product concept.
Know that a major portion of a biotechnology company’s
early value is based on the science that underlies the
product concept and the credentials of the inventors
and researchers of the technology. Consequently, if the
science is mediocre, the company will not have much
value. If the science is top tier, then the company will
be perceived to possess a great asset. As the company
achieves and reaches product development milestones,
additional value is apportioned to the company based
upon the increased likelihood that the product will be
commercialized.
One good method to assess the quality of the science
is by reviewing published articles about the research in
peer-reviewed journals. The originating scientist, engi-
neer, or physician can provide you with some references
to begin your search. You do not need to be an expert in
this research, but you do need to be able to glean whether
or not the conclusions are supported by the basic tenets of
the underlying research. It is also important to conduct a
literature search for other researchers working in this
field, as you may also find out whether others are further
ahead, or if they have disproved the research conclusions.
Find out to what extent others cite this inventor’s research
papers and whether or not the conclusions are generally
believed and supported by others. One noteworthy point
is that any new research concept that is a sharp departure
from previous understanding is often resisted by others
until enough research is published, and many researchers
are working in this field. When new or “radical” concepts
are proposed in science, if they go against current under-
standing, they most often will meet resistance. This was
true for Stanley Prusiner and his proposed existence of
nongenetic infectious agents called “prions.” He was
greatly criticized for his theory and his experiments that
were later proved to be true, and he received the Nobel
Prize in 1997. When peptic ulcers were proposed to be
caused by bacteria, there were challenges in the medical
and scientific community until enough scientific evidence
supported this theory leading to the ultimate identification
of Helicobacter pylori, the causative bacterial agent.
Although countercurrent research arises, most ideas and
scientific concepts are built upon stepwise and incremen-
tal research advancements expanded from previous dis-
coveries in science, biology, medicine, engineering, or
physics.
When conducting a review of the scientific research,
be sure to meet with the researchers and inventors them-
selves to assess the confidence they have in their research
conclusions. Ask them about any conflicting research
studies and whether the science has a controversial nature,
and if so, what aspects. You can gain valuable insights by
talking with them about their research. Another good way
to assess the quality of the scientific research is to request
to read any grant applications that resulted in awards to
the researchers. Moreover, find out how many grants and
granting agencies have funded their research. Having
been awarded multiple federal grants is a good indicator
that both the researcher and the research are respected by
their peers. In addition to the scientific review and meet-
ing with the researchers, for medical products, you should
have discussions with academic and medical opinion lea-
ders who would be prescribing, testing with, or utilizing
the proposed product. If the proposed product is in the
agricultural biotechnology industry, ask farmers, consu-
mers, and regulatory agencies for their impressions of
such a product idea. Key opinion leaders’ impressions of
a new product concept can impact the receptivity by
others in the industry. Be sure to assess the receptivity of
the key opinion leaders when making a technology
assessment.
If you are the inventor and you are also considering
being the future entrepreneur, it is too difficult to objec-
tively assess your own technology, so the best advice is to
get assistance in obtaining an unbiased opinion about the
technical merits of your research leading to your envi-
sioned product. Most researchers tend to not be as critical
of their own research as others may be, so it is advisable
to recruit the help of others for feedback. If the research
is performed at an academic or research institution, it is
possible that your TTO may have conducted some type of
technology evaluation when they were preparing inven-
tion disclosures or patent applications. If the institution
does not have this type of assessment available, find a
business person, consultant, or even another entrepreneur
in a similar biotech sector who would be willing to assess
the merit and likelihood of the research resulting in a via-
ble product. This can help you decide whether or not to
 Technology Opportunities: Evaluating the Idea Chapter | 11
pursue the product concept, modify the product concept,
or obtain a license for the technology.
The Quality of the Researcher and the
Technical Team
Great scientific research is associated with talented
researchers who are of high caliber and respected in the
scientific community. Typically, they will also have tal-
ented technicians, postdocs, and other researchers work-
ing in their laboratories. Practically speaking, the science
and the scientists are not mutually exclusive. In other
words, talented scientists tend to conduct impressive
research. When you assess the science, you should also
assess the quality of the research team who developed the
underlying technology that supports the product concept
you are considering. Often a good way to assess the team
is to have face-to-face discussions, but when that is not
possible, be sure to have plenty of telephone or video/
Internet-based communications before making a decision
to license a technology. Once you have concluded that the
underlying science is solid, and the research team is of
high caliber, you must be sure that this team is willing to
spend time working on the commercial application you
are interested in developing. If there is limited time for
this team to devote to product development due to
research and teaching responsibilities, grant commitments,
or other administrative duties, it will be challenging to get
the momentum you need to move the company forward.
In the beginning, you critically need the expertise of the
researchers who developed the technology so that they
can help train or transfer the technology to others who
can continue translational development of the product.
The technology only remains viable as long as those who
have developed it remain associated with its development
in some capacity. It is imperative, for a period of time, to
retain the inventors and researchers when negotiating a
technology license. There are creative ways to work out
arrangements with the discovering scientists even if they
do not plan on being cofounders or employees of the
company.
Be Sure the Underlying Biology of a Disease or
Condition Is Sufficiently Understood
For instance, in the medical sector, there are several tech-
nology concepts being advanced for the treatment of
Alzheimer’s disease, which is a degenerative process
albeit not completely understood. There is great market
interest and need for products to treat this condition.
However, to the degree that any product correctly targets
the true underlying cause, to that same degree the product
will have a high likelihood of being successful. When
HIV was first discovered and its association with AIDS in
157
the early 1980s, the infectious cycle of the virus and
knowledge of immunology were not totally understood.
As the mechanism of the HIV infectious cycle and its
evasion of the immune system were elucidated, better and
more effective treatments were developed. At the outset
of any technology endeavor, you want to start with rea-
sonable certainty that the future product is directed
against the underlying pathway of the disease or
condition.
Is Product Development Feasible Using Today’s
Knowledge and Systems?
Often a biotechnology product idea may appear initially
intriguing, but as you delve deeper into the science and
technology, you may uncover systems or methodology
challenges that must also be overcome before the product
can be developed. For instance, oral administration of
peptide and protein-based drugs are typically degraded in
the gut. If the market requires your product to be orally
administered but there is no delivery method available for
the drug to become systemic except by intravenous injec-
tion, the rest of the product development process is moot.
In another example, if you are developing a drug that
works effectively in the brain but you do not have a
method that permits it to cross the blood brain barrier,
the product development process is academic. Ensure that
there is not a major roadblock in product development,
which cannot be solved or resolved by the knowledge and
systems available today.
Is This a Single Product or a Core/Platform
Technology with Multiple Products?
When assessing the technology, be sure to explore
whether or not this is a single product or a technology
platform that can produce multiple products. This may
take some time to determine, but most product concepts
in biotechnology have an underlying scientific basis that
is applicable and transferrable to other applications.
Spend some time to uncover the underlying scientific
basis and work to identify additional product opportu-
nities that have significant market value. Sometimes, it is
subtle whether a technology can yield multiple applica-
tions. It is possible that the product development process
may be the technology platform which can generate
diverse products having related characteristics. For exam-
ple, an innovative method for rapidly producing highly
specific humanized monoclonal antibodies may be the
core technology, and the original product application of
the core technology may be, for example, a treatment for
glioblastoma. There are multiple disease targets that
would benefit from highly specific humanized monoclonal
antibody treatments. In another example, the product
158 SECTION | IV The Innovative Technology Component
application could be the development of a hepatitis vac-
cine, but the platform technology provides the ability to
rapidly produce vaccines in mammalian cells in a fraction
of the normal time. This core technology process could be
adapted to rapidly manufacture influenza vaccines for the
next season’s strain since part of the problem for flu vac-
cine manufacturers is to quickly generate product once
the World Health Organization and the Centers for
Disease Control predict the next season’s strain. For an
example, in the molecular testing industry, let us say that
a product application is a combination of gene signatures
that predict the recurrence of breast cancer. However, the
know-how generated during the development of this prod-
uct could be leveraged to rapidly develop another gene
signature for colon or prostate cancer recurrence. When
you are searching for additional product applications, do
not overlook the know-how generated during the develop-
ment of the first product as an asset for accelerating other
product opportunities. Often a single specific product
application may have been the focus, but in reality, all
biotechnology products operate with an underlying scien-
tific basis that enables that product application to work.
Your ability to attract investors increases with the likeli-
hood that the technology can produce multiple products
from the same research. Investor interest increases
because they understand that follow-on products grow the
future business, and a one-product company has limited
long-term success. If the technology is absolutely
limited to a single product, this does not mean that the
technology is second rate, or that the company cannot
raise capital for the product development. In fact, if
the product is successful, there is a high likelihood that
this single product may find other indications for use
the longer it remains in the market. Spend time talking
to individuals in the field such as scientists, physicians,
clinicians, medical specialists, hospital staff, and labora-
tory directors, because these discussions can help you
identify additional useful applications even for a single
product.
Evaluate the Product’s Market Potential
in the Best Market Application
When evaluating technology, it is not uncommon to find
that the research has a solid scientific basis, but some-
times, the initial product application is directed toward
a subpar market, or to a market that is already filled
with competitive products adequately serving the
customer’s needs. To produce a successful product the
technology must be wisely applied to the best product
opportunity that is directed toward an underserved market
having a great need. Aspects of these criteria include the
following:
1. Determine if the product application is directed toward
an acute market need that is not currently being met
or suitably addressed by other products or substitutes.
2. Determine whether the technology has the ability to
deliver the market-needed product features.
3. Assess if there is an existing reimbursement pathway
for the product.
4. Assess if the market is already saturated with multiple
competitors having very little differentiation in value,
even though all are meeting this need.
The Technology Must be Directed toward a
Market with the Greatest Unmet Need
As will be discussed in more detail in Chapter 13:
Directing Your Technology toward a Market Problem:
What You Need to Know Before Using the Business Model
Canvas?, understanding the market interest for a product
is critical to the success of any biotechnology company.
The choice of the first product application of any technol-
ogy is key. Often biotechnology companies only get one
chance to develop a product even though they may have a
number of other good product application opportunities
using the same technology. A single product failure for a
well-capitalized pharmaceutical company will quickly
get shelved, and another will take its place in the devel-
opment without missing much of a beat. Whereas,
development-stage biotechnology companies do not have
cash reserves to support multiple product development
programs through to commercialization. If a biotechnol-
ogy company’s first product fails anywhere along the
development path, it is challenging to recover and have
a second chance, irrespective of how great the other
applications may be.
Ensuring that the first application of any technology is
appropriately directed toward a market with the greatest
unmet need is essential. For example, in the medical
device and diagnostic sector, there is an unmet need for
assay methods to determine the most effective chemother-
apeutic agent prior to the treatment of a patient’s cancer.
These chemosensitivity assays could serve a great need
by predicting the most effective chemotherapy for a spe-
cific tumor biopsied from a patient without having to
resort to trial and error. If a researcher developed a che-
mosensitivity test that worked on a certain tumor tissue
type, but selected a tumor tissue target based on the avail-
ability of tumors from collaborators, not based upon the
market need (problem to be solved) the choice of this first
product application will be directed toward a suboptimal
market. For instance, in some cancers, there may only be
one or two treatment choices that are effective, therefore,
a chemosensitivity device specifically targeting for that
type of cancer would not solve a significant market prob-
lem. Whereas, if this device tests for a tumor type that
 Technology Opportunities: Evaluating the Idea Chapter | 11
has 10 treatment options, each with varying degrees of
success in different individuals, this would meet a signifi-
cant market need. Be sure that the first product applica-
tion of the technology is directed toward an unmet and
significant need in the market.
Two additional criteria for evaluating the market
potential of a product application include the following:
1. the acuteness of the market need for that product and
2. the competition or substitutes in the market now and
in the near future.
These and other assessment criteria are essential to
examine before starting a company or business based
upon any product concept. Recognize that the greater the
product market need, the increased likelihood that the
company can also raise the capital to fund development.
When choosing a product concept to build a company
upon, be sure to optimize your chances of success and
minimize your risk of failure.
Is There Market Demand That Is Not Met or
Addressed with Substitutes?
Another key question to be answered before considering
the licensing of any technology—is there significant mar-
ket demand that is not addressed by competitors or substi-
tutes for this product? World-class technology directed
toward a product that is only “useful” will not guarantee
that anyone will want to purchase the product once it is
developed. For many biotech entrepreneurs, the analysis
of market need and substitutes does not always rise to sig-
nificance at this early stage, even though it should. This is
a grave mistake because the level of market interest in the
product impacts a multitude of other issues—especially
your ability to raise capital for the company. For example,
suppose you find a novel licensing opportunity with a
product application for peptides that possess powerful
antibiotic properties against a limited number of Gram-
negative bacteria. The science may be novel and the
results may be fantastic, yet there are dozens of antibio-
tics in the market (substitutes), which are very effective
against Gram-negative bacteria and certainly economical
to use. This project’s lackluster market appeal makes it
difficult if not impossible, to generate much interest from
biotech investors, which hold the capital needed to
develop any product through to commercialization.
However, suppose the same technology produces a pep-
tide with antibiotic properties against methicillin-resistant
Staphylococcus aureus (MRSA). The market for such a
product would be tremendous because of the lack of
effective antibiotics that work against MRSA. Raising
money for this product would be less difficult than the
first. Recognize that no matter how stellar, novel, excit-
ing, or ground-breaking the science is, if there is not a
159
significant and acute market need for the resulting prod-
uct, which is not addressed by substitutes, the endeavor
will be futile.
How Big Is the Estimated Market for This
Product?
Having a large market for a future product will help
attract the type of investors needed to fund your product
development. But there is also great interest in certain
niche markets and especially those that can gain “orphan
drug” status. If the product is for AgBiotech markets, the
niche market strategy is not likely to be successful
because of the low profit margins for most of these pro-
ducts. Regardless of where the technology is directed
toward, whether it be AgBiotech, therapeutics, medical
devices, molecular diagnostics, or industrial enzymes, be
sure that you know the size of the total market for your
future product and the size of the “target” market which
is the highest likely group of customers who have the
most acute need for that product. In the end, an acute
need for a product is even more important than the size of
the market. The need for a product must be acute and
unmet in order for a future product to have great success.
The greater the need for the product, the greater will be
the receptivity. Conversely, if these customers are satis-
fied with the currently available products and substitutes,
there will be minimal demand for your product.
When assessing the technology, determine if the pro-
posed product features provide superior value to the target
audience and that substitutes or alternatives are not
already satisfying customer needs, or at least be sure the
alternatives are inadequate or minimally effective in satis-
fying the needs of potential customers. This includes veri-
fying that there is an existing unmet customer demand for
your product because it is extremely difficult to sell a
product for which you first have to create a demand.
Successful products are launched to meet an existing
unmet market need. If you must also create customer
demand, it requires first educating the customer that they
“need” the product when they do not know this. Creating
market demand for a product is more difficult than pro-
ducing a product that meets an existing unmet need.
Don’t Be Too Far Ahead of the Market Need
Because of the lengthy biotechnology product develop-
ment time frame, it is good to anticipate future product
market needs. However, there is a potential problem in
being too far ahead of any market need because products
take time to be accepted if they are too far ahead of need.
Technology adoption, customer interest, medical prac-
tices, and societal norms constantly change, and it is diffi-
cult to predict where demand will be far into the future.
160 SECTION | IV The Innovative Technology Component
Premature products move very slowly along adoption
curves. Sometimes, these types of products may also cre-
ate ethical concerns or face unknown consequences that
would limit their market acceptance. For example, gene
therapy has tremendous potential and should ultimately
be effective for many debilitating conditions, but recog-
nize how many decades it has taken to see the beginning
of acceptance, whereas the first companies were too far
ahead of medical adoption. Getting the timing right for a
new product is just as important as choosing the right
product application itself. Evaluate the market need for
the future product before licensing any technology, and
this will greatly improve your chances of success.
Is the Target Market Highly Competitive with
Minimal Differentiation between Products?
You do not want to plan on entering a market that is cur-
rently saturated with products having minimal differenti-
ating features because biotechnology products do not
make good commodities. Biotech products are more com-
plex, more expensive, and are breakthrough in nature.
Companies with the most potential for success are target-
ing markets where there are very few, if any, existing
competitors, or they are targeting markets where competi-
tor’s products do not fully meet the customer’s needs.
Is There a Reimbursement Pathway for the
Product That Is Readily Available and
Accessible?
In the medical biotechnology industry, there are typically
three customers who must see value in a product: the
patient, the physician, and the payer. We discuss more
about these three customers in Chapter 32: Biotechnology
Products and Their Customers: Developing a Successful
Market Strategy. In order for a medical biotechnology
product to be successful, there needs to be a value propo-
sition for the “payers” that cover some or all of the cost
of these products ordered by the physician that are used
on, or used by, the patient. Because most countries have
some form of a third-party payer system, it is critical to
know if each payer system has a mechanism to cover the
costs of your future product and that they would be will-
ing and inclined to do so. More information about reim-
bursement issues is covered in Chapter 33: Biotechnology
Product Coverage, Coding, and Reimbursement
Strategies. Even though there may be an unmet market
need for your product, if there is not a reimbursement
pathway that is available and accessible for your custo-
mers, this future product will likely have many challenges
in the market.
The People Factor
Before you finally decide that you should proceed for-
ward with a particular technology and product applica-
tion, there is one intangible factor that also needs to be
addressed and that is the “people factor,” as it is the next
critical predictor of success. What I mean by the people
factor is the “chemistry” between you and the stake-
holders in the entire process and value chain of the tech-
nology development and the building of the company.
This is something that must be inwardly evaluated
throughout the process when talking to the inventor, the
research team, and others who are associated with the
technology. This evaluation may include other individuals
who have authority and responsibility for the development
process throughout.
In reality, the majority of the real know-how for any
technology is not contained within the IP, but inherent
within the inventor and the technical staff. If you can
communicate well with the inventor and the technical
staff, and they are enthusiastic about the commercializa-
tion of their research, this is a favorable sign. If it is chal-
lenging to communicate with the inventor and their staff,
or to get answers to various questions, it is not likely to
get much better when the pressure of meeting product
development goals is added. The ability to communicate,
work well with, and to quickly resolve issues is important
because there are a myriad of challenges a biotechnology
entrepreneur will face during the product development,
fundraising, and growth of the company. Therefore, the
quality of this interaction and the cohesiveness of the
team are vital. If there are constant disagreements result-
ing in the inability to quickly resolve issues, these are
what I call “artificial problems.” These are internally gen-
erated issues among the team members instead of external
issues between the team and the environment. When arti-
ficial problems arise, they consume an inordinate amount
of time and energy to resolve. Artificial problems detract
from progress and reduce the ability to focus and resolve
the true problems that the company will face during its
product development. The ability to work effectively and
efficiently as a team is like glue for a woodworking proj-
ect. You may join all the right parts and pieces, but if
they do not stick together, there will be no product.
Knowing you can work well with all the stakeholders is
an strategic advantage, and this will help accelerate rather
than slow down the product development process.
It is rare, and highly unlikely, to find that all indivi-
duals within a group are happily cooperative and enthusi-
astic about every decision that is made. However, learn to
recognize the situations and the individuals that create
unresolvable disputes and insurmountable challenges.
There are enough challenges you will face when develop-
ing a biotechnology product and building a company, you
 Technology Opportunities: Evaluating the Idea Chapter | 11
do not want to add more problems by creating teams that
are not meant to work together.
If you determine that the people factor is positive,
then before you are ready to move forward with licensing
the technology, you need to have a discussion and agree-
ment as to what level of involvement the inventors and
research team will have. At a minimum, if the inventor
and team are not part of the company, there needs to be
an understanding that the inventors will consult for the
company or possibly even conduct some product develop-
ment activity within their own laboratory for a period of
time, and for a fee.
What to Do Next?
Once you have made a decision to move forward with the
technology concept and to obtain a license to the technol-
ogy, you must then negotiate with the institution that
owns the IP rights. Academic institutions that conduct
basic research have a TTO or Technology Licensing
Office staffed with individuals who are trained to license
their technology and to work out a deal with the licensee.
As mentioned previously, there can be significant differ-
ences in the philosophies of various TTOs. There are stan-
dard terms and conditions when licensing technology but
there are also terms that are negotiable. You may be able
to find out what to expect in the deal terms from a partic-
ular institution by talking to others who have licensed
technology previously from that institution. Additional
information about licensing terms and licensing conven-
tions are reviewed in Chapter 15: Licensing the
Technology: Biotechnology Commercialization Strategies
Using University and Federal Labs.
Summary
The first step in starting a biotechnology endeavor is to
be sure that the technology and product concept is foun-
dationally sound and properly evaluated for the underly-
ing science, literature support, and the inventor and
technical team. This technology evaluation process is
essential, and determines whether or not the future prod-
uct will provide true value to the target audience and
whether the concept has a high likelihood of success sci-
entifically. A detailed analysis of the scientific merit of a
technology is essential during a scientific review. If the
basic research conducted at a particular academic institu-
tion is reputable and known for excellence, the majority
of their IP available for licensing may likely be of high
quality. That is why you should always work with high-
quality and reputable institutions when seeking to license
technology and future product concepts.
161
Of note, do not be misled into believing that high-
quality research automatically guarantees a useful or
marketable biotechnology product. In other words, entre-
preneurs should understand that excellent research is not
a surrogate for medically useful or marketable products.
There are multitudes of laboratories filled with excellent
research, much of which never results in a successful bio-
technology product. This is because there is more to pro-
ducing a successful biotechnology product than
conducting great science. The most successful products
absolutely are predicated upon quality science; however,
conducting quality science alone does not assure a suc-
cessful biotechnology product. Spend adequate time eval-
uating the science and consulting industry and clinical
experts in the field.
Remember that the evaluation process must include an
assessment of the future product’s perceived value to the
target audience. It is often the case that the technical staff
and founders become enamored with their technology, but
they must remember that technology is simply a solution
looking for a problem to solve. If the problem that is
selected is not selected based upon a true unmet need,
then there will be limited opportunity and interest in the
future product. The final and most telling assessment is
the people factor: the ability to effectively communicate
with each team member to address and resolve issues
without creating “artificial problems” that are distracting
and take away from the focus of the organization towards
reaching its goal.
We have discussed three initial criteria that are impor-
tant when evaluating a technology product concept or
idea: (1) the underlying science and technology; (2) the
product’s market potential; and (3) the people factor.
These three critera are critical when assessing any tech-
nology product idea and they serve as the basis for
screening potential technology product ideas. When con-
sidering building a company around technology owned by
academic or research institutions, be sure to evaluate the
underlying science, technology, and market application.
When building a company and raising capital, the investor
and interested partners are also looking at the future pro-
duct’s value. If you build a company on sound science
and the product addresses an acute unmet need, and the
team can work together to quickly resolve problems, you
will have minimized many of your early risks.
Reference
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