Digital Health and Better FDA Regulation

A recent New York Times article, F.D.A. Faulted for Problems With Drug Tracking, points out the flaws in the FDA’s post-approval monitoring process for therapeutics. As genetic testing becomes more commonplace and treatments are able to be targeted more specifically to individuals because of our increased understanding of how therapeutics interact with individual genomes, regulation will need to be expedited to reflect this fundamental shift in medicine. Expedited approvals will require effectively monitoring therapeutic results which the FDA currently cannot.

The entire process of drug discovery must be reexamined as treatments are developed more rapidly and are more specifically targeted. Specifically, a process suited to approving a few blockbuster drugs a year needs to shift to a system where hundreds of individually targeted ones are approved annually. The only way to address this is to shift from extensive pre-approval testing to better post-treatment monitoring. Fortunately for the FDA, digital health platforms are ideally suited to providing this, especially as sensors and bio-assays get more accurate and the software data and notification platforms get more sophisticated and robust.

The future of medicine will increasingly be focused on the specifics of the individual patient. Current drug discovery and medical technique is focused on the the average patient, and drugs are considered efficacious even if they only are beneficial to a minority of the population. As the mechanism by which most drugs impact a patient is unknown, effectiveness can only be determined by trial and error – give the patient the treatment and see if it works.

As we increasingly understand the human genome, and experimentation shifts from broad trial and error studies to understanding the mechanisms by which treatments are impacted by specific individual genotypes, the patient’s micro-biome, their environment and health history, etc., extremely personalized therapies will provide much greater treatment outcomes. But developing those therapies will be costly, and next to impossible in the absence of a radical restructuring of the FDA approval process.

The first step in enabling such a restructuring is in ramping up post-treatment monitoring. This provides confidence in both efficacy and safety. As an initial step it is crucial, because the development of the software and data infrastructure to safely and confidentially support such monitoring underlies all the promise of digital health. Better mechanical and biological sensors will enable a physician to monitor crucial parameters of individual health, better analytical software will assist them in making correct decisions, and sophisticated monitoring will enable real-time notification of potentially dangerous conditions.

HTL Life accelerator is suited to develop, alongside treatments, software and hardware platforms that enable the real time monitoring necessary to complement the expedited processes required for individually targeted treatments. One of the many advantages to our model, in our working inside the La Jolla Institute for Allergy and Immunology and having access to their validated IP and lab and mentoring support, is that we can offer to our portfolio companies access to this platform, shortening development times and improving the chances of FDA approval.

A Novel Approach to Early-Stage Biotech Investment

The Silicon Valley-developed model of startup acceleration – expedited development and an extreme growth-focused investment methodology – was developed for software and simply isn’t suited to the hard technology space. HardTech Labs (HTL) hybrid acceleration model targets proven IP-protected research – focusing on scientific validation as the first step – and works with researchers and entrepreneurs to transform the technology, getting to proof of concept quickly, and supporting with follow-on funds to ensure a solid post-acceleration valuation.

As I outlined in an opinion piece in the U-T, differences in the cost and speed of development dictate differences in development methodology and investment strategy. The software model of rapid development – the constant iteration allowed by an inexpensive development environment followed by prodigious growth spending – does not allow the scientific validation required for products that effect human health and wellness. A scientifically driven development path is required for hard technology to ensure replicable results that prove both efficacy and safety.

Approach

Our novel approach begins with a selection process – we seek scientifically validated research that we believe has both meaningful positive impact on human health, wellness, fitness, lifestyle or food supply and has an enormous potential market. By partnering with the La Jolla Institute for Allergy and Immunology (LJI), we have access to remarkable technology and exceptional researchers who can mentor and guide our entrepreneurs.

This hybrid model gives us the best of two worlds: a solid scientific foundation and a commercially focused development path, catalyzing the strengths of each partner. We focus on technologies that have short or no FDA approval cycles, meaning the time to market is only beholden to the development cycle. This is optimized by the working environment: co-working, a hardware prototyping lab and biotechnology lab all in a comfortable workspace inside LJI’s facility.

A key is in the combination of biotech, software, and hardware. With a keystone technology from LJI, and via a series of agreements we have with research institutes and incubators domestically and internationally we have access to hundreds of technologies and companies that can be combined into comprehensive platforms tackling the full spectrum of a particular problem. An example of such a platform would be a biotech assay embedded into a connected hardware diagnostic device managed by a wellness digital health app with a analytics backend feeding from a data repository. Each a separate technology, brought into the accelerator and united in a constellation of products. Full spectrum solutions from a full spectrum approach.

Model

Our corporate family, with the IP commercialization entity HTL Biotech at one and the HTL Life accelerator at the other, ensures powerful interaction between entrepreneurs and researchers, and technology and business:

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This structure is built to maximize the value of the IP we control and to bring the best technology, entrepreneurs and companies from outside. Combining them in the accelerator adds even more value to what are already far-reaching innovations. Bringing the subsequent products to market quickly and in close proximity magnifies their valuations.

Our vision is to seize the opportunities in biotech early-stage investment by combining the scientific expertise of LJI with the business and venture experience of HTL – concentrating talent and technology from around the world into a complete lab-supported workspace, guiding through world class mentors and lecturers, and letting time and constant interaction catalyze the next health care giants. We believe this novel, hybrid approach will become the standard in hard technology startup development.

Hard Tech Requires a Supportive Ecosystem

Silicon Valley’s increasing focus on hard tech like biotech, health, energy and other areas that require extensive research is a departure from its typical lean, fail-fast software-focused model. 

Sam Altman’s recently announced $10 million research initiative, Andreessen Horowitz’s $200 million biotech fund, and the growing attention paid to hard tech in accelerators like Y Combinator indicate a realization on the part of Silicon Valley leaders that these technologies are the wave of the future. Though current biotech and hardware development is partly driven by advances in software development and computing capacity, scientists and researchers still face the fundamental problem that sound development requires a longer term model suitable to scientifically validated products. 

Most Silicon Valley startups use a methodology that emphasizes going to market quickly and constantly iterating to find consumer fit. The cost of iteration is small, and startups have relatively small numbers of employees and low levels of funding in the development phase. Once they do find market fit, they often attract enormous investment to fund spectacular growth to ensure they become functional monopolies. Breakneck development, constant trial and error to iterate quickly, low initial costs and then huge expenditure to fund growth on market fit, that is the Silicon Valley model. 

This model does not work where scientific validation is key. The most potentially lucrative areas of biotechnology and life sciences require a foundation of research that has been the métier of universities and independent research organizations. Basic research is costly and long-term, but is necessary for the development of safe, scientifically validated products. Once such research produces valuable ideas, they need to be identified by a proficient tech development team. A company intent on commercially developing the product needs to spend time and funds on proof of concept and scientific validation, and often an FDA regulatory cycle. This is not a rapid iteration process. Only at the time of market entrance and scale does the process track with the Silicon Valley model. 

In contrast, San Diego culture is steeped in this process. Scientific validation is fundamental to a biotech-focused ecosystem. What has not been created is our ecosystem to develop and fund companies at an early stage. This is the mission of HardTech Labs – we solve the problem of ensuring scientific validation by partnering with a top independent research institute, locating our health and wellness focused accelerator in their facilities in the UCSD Science Research Park. 

This collaboration with the La Jolla Institute for Allergy and Immunology (LJI), combined with funding and a complete workspace with hardware labs and access to biotech research facilities for our portfolio companies at LJI supports complex biotech, hardware and software integrations in health and wellness, agriculture and other areas. HardTech Labs’ companies can focus on validating their research, developing products and getting to market expeditiously. By starting with the validation, we ensure that products are solid before they are taken to the market in the growth phase. 

What is most powerful is that San Diego can focus on its strengths in hard tech, and build companies that will be ready for the expertise that Silicon Valley provides – growth capital and go to market strategies. Together we can create an ecosystem that compliments each regions’ strengths – resulting in a vibrant landscape rich with successful start-up companies.

Derek Footer is CEO and Managing Partner of HardTech Labs, a fund and manager of HardTech Labs Life accelerator, a joint venture with the La Jolla Institute for Allergy and Immunology, focused on health and wellness companies developing biotech, hardware and software products in the San Diego/Baja region.