I once spoke to a doctor that was trying to raise funding for a lab to develop a drug that he'd been working on and take it to the next stage.
I asked "How much are you trying to raise?"
"Oh, about $300 million."
I had to rehinge my jaw.
Apparently physical labs are expensive.
This is just one second hand data point. Does anyone else have experience in this space? Are setting up labs and development/manufacturing environments for relatively early stage bio companies really this expensive?
There are a places you can rent a wet lab biology bench for <$1K/month in both Boston and SF. You still need to buy equipment and materials but you'll have lab infrastructure/permitting OK. If you just need to do really bare bones basic molecular biology (no major equip needs) I think you can get off the ground for $50-100K per year for lab/materials. Once you get any real traction will get more expensive.
labor costs are going to swamp this unless you're assuming volunteer/low cost. And in that case, it's hard to get a good throughput because people are... well, volunteering and that rarely works out well.
yeah, founder salaries would be on top of that - I was just talking about lab/materials. Fortunately if you are coming out of PhD program you're used to working for low cost.
at $300 million, I would expect this person to be going into clinical trials.
At that stage, you are dealing with things like FDA GMP compliance[1] and then actually putting molecules into humans and monitoring them for several efficacy end points as well as toxicity. And often you are doing this at multiple sites.
If the doctor wasn't looking to do trials, then he was being ripped off. And if he wasn't looking to do trials for a major disease, he was also being ripped off. Trials for orphan diseases are often cheaper because they are limited by the number of people who even have the disease.
Also, with the rise of CROs[2], you can often find one that will "risk-share". The CRO will lower your bill, often significantly, in exchange for some of the upside on the molecule.
In oncology, once you have a molecule lead, you should be able to do preclinical in 200k or so if you really pinch the purse. Typically clinicals will run you on the order of $20 million, not 300.
I asked "How much are you trying to raise?"
"Oh, about $300 million."
I had to rehinge my jaw.
Apparently physical labs are expensive.
This is just one second hand data point. Does anyone else have experience in this space? Are setting up labs and development/manufacturing environments for relatively early stage bio companies really this expensive?