Dual-use technology can accelerate commercial industries and national security, but navigating the challenges of partnering with the U.S. government can be complex. Our own Austin Walne dug in with the leaders of three very unique ARTIS portfolio companies that have one thing in common - they have all forged multi-million-dollar government partnerships and have insightful information to share with any company considering a similar path.
The larger discussion, which can be watched here, featured:
Peter Dixon, founder and CEO of Second Front Systems, building the first digital prime defense contractor to bring commercial technology to the defense and national security communities in record time
Paul Garofolo, founder and CEO of Locus BioSciences, revolutionizing the treatment of bacteria across infectious disease, the microbiome, and beyond
Chris Kemp, founder and CEO of Astra, reshaping how the space industry works to enable a wave of innovation in low Earth orbit
The following condensed interview details just what makes it so difficult for private companies, especially startups, to partner with the government, and how to do it successfully, without losing sight of your mission.
Partnering with the private and public sectors requires similar stamina where you can count on about a 1-2 year sales cycle with multiple rounds of diligence with different layers of the organization.
BARDA charters front line countermeasures that would be human health related in all kinds of attacks (i.e., chemical, biological, nuclear). Biotech startups can tap into this resource if they are developing relevant solutions, and this could potentially lead to larger partnerships by selling into the nation’s stockpile of defense solutions.
Paul, you and Locus Biosciences have signed both a major partnership with the government, but also with the largest pharmaceutical company in the world. What is similar and what is unique about navigating partnerships with both extremely large private enterprises and with the government?
Paul: The deal process is actually fairly similar. It takes a year to two years, there's tons of rounds of diligence and each level of diligence is sort of with a different layer of the business, so to speak. The process is so long that you also have to advance your technology through those discussions because you can’t sit still over a year period.
I think what's different is there is some semblance of desire to understand on the government side that the business is going to still be an entity when they are done giving you all of the money. On the commercial side for our deal with Johnson & Johnson, after the technology diligence was complete, a lion's share of the focus is now on the commercial opportunity, the markets you could reach, the penetration tactics to get into that market and so on. So there is, I think, a little bit of difference inside of that commercial focus, but surprisingly, at least to date, the breadth of involvement from both a major pharmaceutical company and the U.S. government is really quite similar.
Coming from the biotech industry, what is your perspective on if working with the government can pigeon-hole a company?
Paul: Drug development is typically a 10 year multibillion dollar pursuit, which is why our $140 million joint co-development program with the Biomedical Advanced Research and Development Authority (BARDA) division of Health and Human Services is so crucial for us. We're really fortunate to have a BARDA program under our belt, as it gives us great flexibility to advance our lead asset, which is combating urinary tract infections caused by E. coli. This co-development program will advance that asset through to approval for commercial use. However, the most important thing to know about our platform is it blasts straight through any microbial resistance (AMR) or multi drug resistance (MDR). And so the AMR or MDR threat, depending on how you want to categorize it, is one of the things that BARDA works to address for the citizens of the U.S.
For additional context, BARDA is charted with the front line of coronavirus countermeasures. This is the group that has the medical supply and medicine stockpile that's used to help support the nation in times of crisis, like the recent COVID-19 outbreak. Everything from PPE gear for hospital staff to respirators was dispatched from that safety stockpile. BARDA is also chartered with front line countermeasures that would be human health related in all kinds of attacks, think chemical attacks, biological attacks, or nuclear attacks, but most importantly for Locus, it's also chartered with pandemic response as well as emerging infectious disease countermeasures.
For those fortunate enough to do drug development with BARDA, the really nice part of this, and probably something Peter and Second Front can help us with eventually, is we not only work to get approval of this product, but at some point hope to sell that end drug into that stockpile. BARDA has the authority to buy experimental drugs to be able to address threats that are out there before drugs and other medical devices are approved, so there can definitely be bigger opportunities when partnered with the government.