Nutricosmetics – Snake Oil or Biotech Opportunity?

Perusing the pages of Fast Company, I came across a series of articles profiling the new trend of “nutricosmetics.” What exactly is nutricosmetics? According to Nestle’s Chief Beauty Officer (yes that’s a real title) Kimberly Cooper, it is the fusion of “food, nutrition, and beauty,” and the notion that “what you consume does affect how you look and feel.”

Nestle has turned that description into Glowelle, which it describes as a “Beauty Drink.” Available only at places like Bergdorf Goodman and Neiman Marcus, at first glance the whole concept seems like a fleeting trend for those with more money than sense. But Datamonitor, a market researcher, projects that nutricosmetics will be a $1.3 billion category by 2012.

 Now you may be wondering how this all relates to biotechnology. It does not appear that the FDA has any oversight, and Nestle is not exactly a pharma powerhouse. That is what makes BASF’s entry into the market more intriguing. Certainly, the world’s largest chemical company’s involvement lends some level of scientific credibility to nutricosmetics. The $79 billion company has been creating high-end nutricosmetic ingredients for companies such as Estee Lauder and L’Oreal.

Serge Rogasik, who heads up the nutricosmetic effort for BASF, and is a biochemist by training, sees nutricosmetics as part of a movement in “in which holistic treatments replace toxin-based ones.” In the Fast Company article, he references advances made in skin care by using food-science technology, such as dill extract to treat aging skin, and expects to see breakthroughs in within the next 36 months.

Wow, what a concept. Instead of plastering Clearasil on before bedtime (been there), you could just sip a chilled mango-guava beauty smoothie (just made that up, but it does sound tasty) that treats your pores from the inside. Here’s the problem, where’s the science? How does Nestle’s Chief Beauty Officer, previously a brand manager, prove that Glowelle  does anything, other than cleanse your pockets of cash?

Now anyone who’s been in a GNC knows there are many products that make outlandish nutritional claims without FDA approval. Are nutricosmetics similarly going to be able to fly under the FDA’s radar and sell “health” products without FDA interference?

Well, if the case of Diet Coke Plus is any indication, maybe not. As a quick tutorial on gross drinks, Coca-Cola describes the drink as “a sparkling, calorie-free beverage with vitamins and minerals. In addition to providing great, refreshing taste, Diet Coke Plus is a good source of vitamins B3, B6, and B12, and the minerals zinc and magnesium.” 

Katie Bayne, senior VP, Coca-Cola Brands, Coca-Cola North America is quoted as saying”we wanted to offer [consumers] the convenience of a calorie-free beverage that is a good source of several essential vitamins and minerals, and one that delivers on the great taste that they have come to expect from us.” (here’s the whole press release http://www.dietcoke.com/press_032207.pdf)

Sound familiar? A little nutricosmeticish?

Well the FDA shockingly issued a statement saying that Diet Coke Plus’ labeling is misleading, and in particular, that the nutritional claims are misleading.    More specifically, the FDA says Diet Coke Plus violates the Federal Food, Drug and Cosmetic Act, and that it is misbranded because the nutritional claims do not meet the criteria for such a claim.

The consequences? Coke has to correct the violations, and if they don’t, the FDA will take its own actions, including seizures or injunctions. (For more details, check out this article http://www.consumeraffairs.com/news04/2008/12/fda_coke_plus.html).

So what’s my point? Two things:

First, it appears the FDA may finally be reigning in some of these products that make unsubstantiated nutritional claims, and therefore nutricosmetic manufacturers would be well advised to support their claims with solid science.  Afterall, if Coke can’t prevent the FDA from bringing the heat, who can?

Second, there may be a niche for start-up biotechs to take advantage of this burgeoning area, and create data-backed nutricosmetics, or license such technology to the Nestles of the world who don’t want to undertake the hard science. Besides, who wouldn’t get a kick out of getting funding for developing a chilled mango-guava beauty smoothie. I know I would!

 

 

 

International Society for Stem Cell Research Finally Releases Guidance Document for Clinical Translation of Stem Cells

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]

On Dec. 3^rd, 2008, the International Society for Stem Cell Research (ISSCR) released its long awaited document on the Guidelines for the Clinical Translation of Stem Cells. This document is a first step towards establishing the much needed regulatory standards missing from the Stem Cell and Cellular Therapies industry. Guidelines, in essence, are recommendations founded on general principles. In this case, said guidelines are established by both academic and industrial professionals whose collective experience on the subject matter is unquestionably comprehensive. The following is a summary of the recommendations offered by ISSCR as they pertain to thee particular areas of translational stem cell research: 1) cell processing and manufacture; 2) preclinical studies; and 3) clinical research. It is these thee areas that will be the focus of today’s entry. For brevity, some of the less intriguing recommendations have been omitted:

Cell Processing and Manufacture

Recommendation 5: In the course of development of stem cell-based products, it is imperative to validate surrogate markers of the identity and potency of cell products.

Recommendation 7: Acknowledging the limitations in current assays, scientists and regulators must work together to develop common reference standards for minimally acceptable changes during cell culture, to ensure quality and safety of cell therapy, and to facilitate comparisons across studies.

Recommendation 9: To facilitate international collaboration and universal access to stem cell-based treatments (both during clinical trials and when established as standards of clinical care), there is a need to develop appropriate quality management systems for donation, procurement, testing, coding, processing, preservation of stem cell potency, storage, and distribution of the cells. For extensively manipulated stem cells (either autologous or allogeneic) destined to clinical application, the ISSCR recommends adherence to GMP procedures, which includes minimizing risks to patients from unwanted cell products.

Pre-Clinical Studies

Recommendation 15: The need for studies in non-human primates should be evaluated on a case-by-case basis, and performed only if the studies promise to provide necessary and otherwise unobtainable information for experimental therapeutic application of stem cells or their progeny in patients. All studies involving the use of non-human primates must be conducted under the close supervision of qualified veterinary personnel with expertise in their care and their unique environmental needs.

Recommendation 17: Criteria for release of cells for transfer to patients must be designed to minimize risk from culture-acquired abnormalities.

Recommendation 18: Risks for tumorigenicity must be assessed for any stem cell-based product, especially when extensively manipulated in culture or when genetically modified. A clear plan to assess the risks of tumorigenicity for any cell product must be implemented under the direction of an independent review body prior to approval for human clinical use.

Clinical Research

Recommendation 23: The peer review process for stem cell-based clinical trials should have appropriate expertise to evaluate (a) the in vitro and in vivo preclinical studies that form the basis for proceeding to a clinical trial and (b) the scientific underpinnings of the trial protocol, the adequacy of planned end-points of analysis, statistical considerations, and disease-specific issues related to human subject protection.

Recommendation 25: As a general principle, a stem cell-based approach must aim at being clinically competitive or superior to existing therapies. If an efficacious therapy already exists, the risks associated with a stem cell-based approach must be low and the stem cell-based approach must offer a potential advantage (for example, better functional outcome; single procedure (cell administration) versus life-long drug therapy with associated side effects; reduction in long-term cost).

Recommendation 26: Clinical research should compare new stem cell-based therapies against the best medical therapy currently available to the local population.

Recommendation 31: To advance scientific understanding, research subjects should be asked, in the event of death, for consent to the performance of a partial or complete autopsy to obtain information about the extent of cellular implantation and its morphological and functional consequences. Any request for an autopsy must consider cultural and familial sensitivities.

Recommendation 33: Researchers should publish both positive and negative results and adverse events. To ensure the integrity of scientific information and to promote the highest standards of professional conduct, researchers should present their results at professional scientific conferences or in peer-reviewed scientific journals before reporting their research to the lay media or to patient advocacy groups and associations.

We’re a long way from realizing the full potential of stem cells…at least a decade away from a widely accepted stem cell-based therapeutic to treat a non-quality-of-life disease. Regardless, developing regulatory standards now is critical to long-term success. Should a patient lose their life on account of a stem cell therapy (Clinical Trials or Open Market), the set-back would be monumentally devastating to the industry as a whole.

Slainte Mhath!

The Double Meaning of Business Execution

I just finished reading an excellent book called “Execution” by Larry Bossidy, Ram Charan, and Charles Burck. My father gave it to me, and I’m usually wary of the latest “sage” business books but I said I would take a look. I literally could not put it down. It is so well written, and on such a simple, but not so simple to do, premise: In order to succeed, you must become a master of execution.

It also really got me thinking about how the lack of execution by today’s business “leaders” has at least partly brought us into this death spiral economy. Until now, being qualified to be CEO of a major American corporation has only entailed having the schmutz of corporate leadership on you. Never mind whether you have actually been successful in leading a company. If you fit a certain profile, you were going to be paid handsomely, even if you have previously lead a company down the tubes.

Take for instance, Chrysler CEO Robert Nardelli. He has been in the news the last couple of weeks for asking Congress for an auto-industry bailout. Now, here is a guy that wants billions of dollars to save a failing corporate icon. In early 2007, when Chrysler was searching for a seasoned executive to lead the struggling auto-maker back to glory, you would expect they would pick someone fresh off a victory lap of leading some other company back into prosperity.

Not so, in August 2007, they instead chose to go with Mr. Nardelli, who had most recently been the CEO of Home Depot. So what did he do at the Depot de Case? I think an article Fortune did on Chrysler’s pick summed it up quite nicely:

Nardelli angered Home Depot shareholders when he refused to take questions during a shareholder meeting in May 2006 as the stock was floundering. His rich pay package drew fire; he earned $38.1 million last year. Ultimately he was forced out of the company in January 2007, but left with a $210 million golden parachute in cash and stock options that included a $20 million severance payment and retirement benefits of $32 million.

To be sure, plenty of executives before Nardelli have gotten away with big paychecks and imperious behavior. In the end, it was the stock price that got him. As Bernie Marcus, co-founder of Home Depot, told Fortune after Nardelli’s departure, “if the stock had doubled, who would have cared? Instead it went nowhere, and that’s what this is all about.”

By the time Nardelli left the retail chain, its shares were trading at about the same price as when he arrived in 2000. Moreover, analysts said that the stock had actually lost about 40% of its value because a series of stock buybacks had reduced the amount of shares available. (Go to http://money.cnn.com/2007/08/05/news/companies/chryslernardelli.fortune/index.htm for the full article)

So in August 2007, Chrysler went with a guy covered in leadership schmutz who lowered the stock value of his previous company by 40% and walked away with a $210 million golden parachute, instead of a guy who actually executed a strategy and would not accept failure.

So fast forward to December 2008, and Mr. Nardelli has not only failed to turn around the prospects of Chrysler, he is now asking us to bail them out.

What we need now more than anything is a leadership renaissance. From local government, to the halls of America’s most hallowed companies, we need change in which real leadership is measured by what someone sets out to realistically accomplish, and what they ACTUALLY get done.

Even on a tremendously smaller level, many start-ups never realize their full potential because they are big on dreams, ideas, and even intellectual property, but short on execution. Whenever I work with a client, the first thing I say is that we need to set out a plan of what we are specifically going to do, and how we are going to do it. Not in theory, but in real concrete steps. Do we need independent testing of results? Great, who specifically can do that for us? Do we need to get funding? Awesome, which venture capitalists, or what NIH grants are we going to focus on?

If on the other hand you prefer to rely on ”high level” strategy and setting amorphous goals, the only executing you will be doing in the long run is killing your entrepreneurial dreams.

Interview on Securing Funding

I was interviewed last week by Dawn Obermoeller who is the Co-Founder and Prinpal Consultant for Red Bridge Marketing(www.redbridgemarketing.com), a new generation marketing firm that specializes in the life science industry.

Our interview focused on ways bio-entrepreneurs can raise funding for both start-ups and established companies. The interview is posted on Dawn’s blog, the Life Science Entrepreneur. Check it out: http://lifescienceentrepreneurs.blogspot.com/2008/12/bioventis-consulting-helping-biotech.html

Wise Men Learn from the Mistakes of Others

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]

Inspiration:  www.nature.com/bioent/2004/040301/full/bioent796.html

Someone once told me that “smart people learn from their mistakes, while wise people learn from the mistakes of others”. Of course, it takes time and effort to research the blunders of others, valuate them, and apply the new found wisdom to your own life. Well, recently, Nature Biotechnology interviewed some the biotech world’s start-up ‘greats’ on what drives a scientist to start a company. Nature unearthed the following pearls of wisdom:

1) “Mature companies are interested in product development and have an intense need to get products to market; they just don’t have the time to dabble in new technologies. That’s what happened with recombinant DNA—large pharmaceutical companies relied on small ones to carry out development.”

2) “I had the opportunity of working in large pharma but felt that an inherent conservatism in these large organizations would delay bringing the technology to the discovery process. I believed that starting my own company was the only viable option.”

3) Greg Winter, founder of Domantis, saw founding a company as a way of expanding his group out from the confines of academia. With little prospect of enlarging his group, he decided to start a company instead. “It may not be the best reason for creating a startup company, but I needed more hands at the bench, as there were huge technical challenges.”

4) Balancing investor expectations with realistic timelines for technology development was a constant battle. In Biotech, ‘quick money’ is rare. It is best to start small and let the company grow gradually, establishing commercial contracts to keep the company afloat.

5) The high level of uncertainty associated with a startup makes retaining staff, who are key for R&D, very challenging.

6) “It is important to have enough cash in the bank…I have learned that it is a good strategy to raise money, even when it is not needed, so that there is always a sufficient cash cushion for when the market is uncertain.” Further, it is suggested that companies take advantage of every financing opportunity, because, more often than not, you are going to have to work miracles with very little money.

7) With respect to “people”, hire them for their attitude, not just their expertise. Focus on building a team with diverse backgrounds. In other words, do not forget about conducting a gap analysis. Further, never underestimate the importance of a strong management team. Having one allows a company to adapt to adverse conditions. Early on in business development, try hard not to forget about the benefits of collaborations.

8 ) Try to get your employees to be invested in the company. For example, “incentivize” them with rewards such as bonuses and stock options, which will make them feel responsible for the company’s success.

9) Let businessmen deal with business, and scientists with science. As a scientist, sometimes it is best to remove yourself from management in order to have an objective view of the company’s science. That said, it is noted that in smaller companies, the founder will often have to wear multiple hats. Often, the founding scientist is best suited for a consulting role on the company’s advisory board.

So, what does it take to succeed? Will, ambition, great mentors, and the ability to differentiate between the academia and commercial interests of a company. To quote Jim Collins: you’ve got to maintain faith that, against all odds, you can and will succeed…while always confronting the most brutal facts of your current situation, whatever they might be.

Lastly, the article makes the point that being an entrepreneur is a lot like being a leader: you either have it, or you don’t. It’s not something you learn. Here, nature is the controller, while nature takes a backseat.

Slainte Mhath!

You Wouldn’t Do Your Own Heart Surgery, Would You? Then Don’t Do Your Own Legal Work

There’s a good chance that one of the first three articles you will see on any entrepreneur website will relate to the importance of putting together a solid business plan. While it is definitely true that a well-drafted business plan is important, even essential, I wish more emphasis was placed on retaining experienced legal counsel.

The problem is (well-deserved, I’m not sure) that even sophisticated business people generally disdain lawyers, and more importantly, disdain paying for lawyers. I love Fast Company’s website (fastcompany.com), a definite must read for entrepreneurs, but I was annoyed when I saw a brief survey they did of some CEOs. The question was something to the effect of, “What expense do you dislike paying the most?” Two out of three answered “paying for legal counsel.”

The truth is that retaining experienced legal counsel from the get-go can save entrepreneurs a tremendous amount of problems (and money) in the long run, than only seeking experienced legal assistance when something has already gone wrong. Often times, what is done is not easily undone, or at the very least, not cheaply undone.

For example, let’s use the “simple” task of forming and choosing a business entity. Anyone who listens to radio knows they can easily form their own company on a number of websites. So they go, pay a fee, fill out some paperwork, and like magic they are a company. That was easy, and saved a lot of money in legal fees, right? Well that depends.

For instance, they may not realize that choosing the wrong entity type can have severe tax consequences. One of those consequences is that instead of paying taxes once, they may end up paying taxes twice. At the entity level, and at the personal level.

Another problem with DIY company formation, is that you can potentially make yourselves unattractive to investors. For example, sophisticated investors want to see certain provisions in a company’s corporate documents. If you’re documents make it harder for them to gain control and receive certain equity stakes, you have just made their ability to invest in you more difficult. Ergo, vis-a-vis, one more reason not to invest in you.

On a more personal level, experienced counsel also bring relationships to the table. The simple truth is, private equity and venture capital firms like to deal with people they already know. Unfortunately, most entrepreneurs do not have such relationships. Retaining counsel with ties to the funding community not only gets you in front of those deep-pockets, it also gives you credibility.

Lastly, you may have noticed that I have qualifed the word “counsel” with the word “experienced.” The reason is that inexperienced counsel is sometimes worse than no counsel at all. Everybody and there brother “knows a lawyer who can help you with that.”  Just like no doctor can perform every medical procedure, all lawyers are not able to perform all legal tasks. An inexperienced lawyer will not necessarily be aware of all the legal, and non-legal, issues that come into play. Especially when you’re dealing with intellectual property issues (which are often the heart and soul of biotech companies), it is imperative to have counsel that is well-versed in the issues you will have to deal with.

So do yourself a favor and retain EXPERIENCED legal counsel before you go down the winding path of starting your own biotech company. Anytime someone says , “I hear what you’re saying, but it’s expensive and what I need done is really not complicated, and I can buy a book on how to do it,” I just ask them, “well, if you had a heart problem that required surgery, you wouldn’t do your own heart surgery would you?” I wish more people took my advice to heart (pun intended.)

My first guest blog

I was asked to do a guest blog article on Hopesandcures.org. It’s a great site that focuses on biotech companies that create treatments for life-threatening illnesses.

My article discussed why the down economy is an opportunity for biotech companies to explore SBIR/STTR grants as an alternate funding source.

I enjoyed writing it, so I thought I would go ahead and write my own blog on the business side of biotech companies. You won’t find hard science here, but you will find out more about the business of starting and running a biotech company. From funding sources to clinical trial set-up, I’ll discuss it all.

Anyway, here’s my guest blog article. Hope you enjoy it.

 http://hopesandcures.org/2008/12/10/guest-blogger-afif-ghannoum-biovenits/