It's hard to be an innovator
Innovators in tough conditions
Galina Kostina, "Expert" No. 22-2010.
The purely scientific curiosity of scientists resulted in experiments, the result of which was not only the discovery of some mechanisms of blood clotting, but also the creation of a diagnostic system for practical medicine. Moreover, the diagnostic method turned out to be so revolutionary that the whole world could be a potential market for its application. However, with a couple of experienced diagnostic devices assembled on your knees, you will not conquer the world. First, business angels came to the aid of scientists. But their money was not enough for long, and then the global financial crisis broke out. The team got into a situation that threatened to freeze the project. She urgently needed a venture investor.
Prediction of a blood clotThe head of the Laboratory of Physical Biochemistry of the Hematology Research Center of the Russian Academy of Medical Sciences and Professor of the Department of Biophysics of the Faculty of Physics of Moscow State University Fazli Ataullakhanov decided to solve the riddle of what laws blood coagulation occurs in the body.
For years, his lectures on this topic did not cause him any questions. But at some point he suddenly realized that he did not fully understand how everything was really happening. There was a scheme, there were some mechanisms, but there was no complete clarity. Small breakdowns are constantly occurring in our blood vessels. In order to close up even the smallest holes in the capillaries, nature has come up with a powerful mechanism for blood clotting. A blood clot formed during the clotting process plugs the hole. Then a new tissue appears under the thrombus, and it resolves. But sometimes the clotting system is initiated by dead cells or infection, and blood clots that appear in the bloodstream of the circulatory system can clog some important vessel - and then a stroke or heart attack. In a young body, blood clotting agents constantly working in the circulatory system protect against such situations, but the older a person is, the higher such risks are.
The start of the blood clotting process is carried out by the so-called tissue factor. It is found in all tissues except the one that lines the inner wall of the vessels (if it were there, the blood would constantly clot). When the vessel is damaged, the blood comes into contact with the tissue factor and activates the coagulation system. Thus, a cascade of reactions is triggered, in which various factors of the system accelerate coagulation.
All this was known before. But no one knew how this self-accelerating system, which can curdle all the blood in the body at such a pace, suddenly stops at some point. Ataullakhanov was surprised that no one in the world had bothered to solve this problem with the help of simple experiments, according to him. He decided to simulate the process of blood clot formation in the body on a laboratory table and find out all the details in this way. During the experiments, a paradoxical situation was revealed at first glance – the same protein both started the blood clotting system and initiated its stopping. At the same time, nature came up with a very sophisticated mechanism: the initiation of stopping blood clotting occurred slower than the accelerating clotting process in order to give time for a blood clot to form. (For details on this discovery, see the article "Forty-five microns per minute").
At that moment, Ataullakhanov did not even think about the practical applications of his scientific research. However, when special devices had to be designed for experiments and then interesting information about the state of blood was obtained in experiments, it became clear that a unique diagnostic method could be born.
By now, medicine has learned well how to diagnose one of the coagulation diseases – hemophilia. But this is not a very common phenomenon. A much bigger problem is the tendency of the body to form blood clots, which can lead to many cardiovascular diseases, including heart attack and stroke. As a rule, doctors and patients learn about the presence of such a tendency, which, by the way, leads to one of the main causes of mortality of the population, after the fact. The appearance of a method that allows you to recognize a tendency to thrombosis is really revolutionary – after such a test, doctors have the opportunity to really influence the localization of the most common diseases in the world.
Called graduate students and angelsIn the course of scientific experiments, a team was formed, which included not only scientists from the Hematology Center.
Ataullakhanov's principle is to involve young specialists from different fields of knowledge in all endeavors. This time he took a graduate student in engineering from Baumanka. Sergey Karamzin had to improve the diagnostic device, originally made from an amateur camera and other devices. "With Sergey, as well as with my long–time friend and at that time laboratory employee Vasily Sarbash, we tried to make a diagnostic device from a laboratory device," Ataullakhanov says. Another graduate student of Ataullakhanov was involved in the process – Igor Pivovarov, who by that time already headed the scientific and innovation company "Zhiva", which produces laser medical equipment. His knowledge was useful not only in physics and device design, but also in business. Later, Igor became the lead manager of the diagnostic systems project. To solve another important technological problem – the creation of a special activator of the coagulation process, similar to a natural one – another graduate student, chemist-technologist Olga Fadeeva was involved.
According to Igor Pivovarov, thanks to Fazli, a very harmonious team was born, capable of solving problems at the intersection of sciences: biology, chemistry, physics, software. It was also important that one of the members of the Zhiva team had at least a minimal base for creating the first devices. The only thing the team didn't have was serious money for the project.
At first, at the stage of scientific research, Ataullakhanov's team was assisted by the RFBR. But when applied development emerged from fundamental science, other investors were needed. This is the first bottleneck faced by the streams of young innovative teams. According to the classical scheme worked out in the Western world, at this moment the team should be picked up by business angels. In Russia, if there are people who are willing to risk relatively little money, then they need to be carefully searched. Our team was lucky – numerous connections worked. The fact that the theme of the project was clear and seemingly obviously promising also worked. "Why is it so important for the new team to attract business angels at this moment? The fact is that in order to attract a large investor, a well–designed project is needed, and in order to design a project well, you need money, which, as a rule, scientific companies do not have, - says Igor Pivovarov. – On average, you need to spend about 100 thousand dollars on this design. Some teams may need even more significant amounts, since they will have to hire business managers who are able to lead the project and draw up at least a preliminary business plan required by a potential investor. I know that many scientific teams do not receive their development precisely because of the lack of such seemingly insignificant funding."
Maxim Avdeev and Andrey Khmelinin acted as business angels for the team from the Hematology Research Center, for whom venture is outside the main activity. They contributed funds that made it possible to make an initial version of diagnostic devices and software, issue several patents, and prepare the first business plan. Business angels joined the team of authors of the project. The first devices were able to be attached to leading institutions of the world for testing: one of them was used for several years in the Laboratory of John Holand (American Red Cross) and in the laboratory of the University of Lyon-1 in France.
An experimental sample of the device registers the growth rate of a blood clot, the time of coagulation delay, the density of a blood clot
Photo: Oleg Core
Any innovative company comes to a point when it no longer has enough funds from business angels, and the business angels themselves have a stopper that limits investments in each project. This is the second bottleneck on the path of an innovative company. In world practice, at this stage, the project is usually picked up by a professional venture investor. In our history, such a moment was very unfortunate in the global crisis.
"We are, of course, depressed. There are generally few venture investors in Russia, and after the crisis it seemed very unlikely to find such," Igor Pivovarov continues the story. – True, we applied to the newly formed Rusnano Corporation without any hope and even passed an expert council there, but this did not guarantee that an agreement would be signed with us. It turned out that in order to complete the transaction, you need to do a very extensive organizational work to meet all the requirements of the corporation. Moreover, money was also needed for this organizational work. Someone may simply not have them. In order for the project not to simply hang for an indefinite time, our company Zhiva had to become another business angel." Zhiva collects prototypes of diagnostic devices and manufactures laboratory series of cuvettes where patients' blood is placed. With the help of these systems, more than 12 thousand tests have already been conducted. The work needed, in particular, to create methodological recommendations for the interpretation of research results in order to use devices in clinics.
Pan or goneThere were two possible developments for the company.
The first is if you fail to get a strategic investor. Then – the slow movement of a small company, but in this case only a miracle could lead to success. "Any revolutionary method that has no analogues in the world sooner or later becomes interesting to other scientific groups and companies,– explains Pivovarov. – And you either find money, move your project and get a good position in the market, because you have a head start, or you slowly crawl, they overtake you, leaving only the laurels of an honorary inventor." Of course, the option with an investor is preferable. Moreover, with a private one, because after getting acquainted with the requirements of the state investor in the person of Rusnano, any average venture capitalist looks just like Santa Claus. But, according to Pivovarov, it is almost hopeless to look for a private investor during the financial crisis.
The second option remained – Rusnano. The approvals with the corporation lasted a year and a half. The corporation has a certain scheme, according to which all applicants for financing must pass. It is necessary to create a company in which all intellectual property and founders – authors of technology, as well as business angels will be concentrated. Such a company called "Medical Innovations" was created. At the next stage, this company had to establish a new company specifically created for the project. In addition to Medical Innovations, Rusnano and another co-investor were to join this new company, called the Hematology Corporation. Attracting a co-investor, by the way, is another mandatory requirement of the corporation: if private money enters the project, then this is a sign that public money entrusted to the corporation can also be invested in it. It was also not easy to find a co-investor in the crisis year. Nevertheless, the team managed to attract Sberbank's subsidiary, Sberbank Capital. According to Pivovarov, it is very difficult for many teams to find co-investors also because the corporation requires 50% of the project financing from the co-investor. In this case, given the high social significance of the project, the corporation made concessions and the share of the co-investor was reduced.
Then began a series of bureaucratic procedures related to the transfer of patents from one company to another (it takes up to two months to transfer a patent), several more months were spent on the registration of the company "Hematology Corporation". It took a lot of time to draw up a business plan, because Rusnano was not satisfied with the preliminary and schematic business plan presented. I had to hire professionals – the company "Intellect-Telecom".
"They, of course, tormented us a lot, biting into the subtleties, but we realized this necessity along the way: the fewer surprises you expect during the development of the project, the better," recalls Pivovarov. – It was a pleasure to work with qualified specialists. As a result, we have received a very high-quality product that allows us to describe in detail our actions for the long term." Igor points to the weighty volume of the business plan.
But in addition to fulfilling obligations, a number of subtle and ambiguous legal issues had to be agreed with Rusnano. Many applicants are frightened not only by the rigidity of the corporation's requirements for the creation of the project, but also by the rigidity of the conditions for its development. For example, in case of failure, only the authors' company is responsible for this, and the corporation may require the authors' team to return the money invested by it in an ultimatum form. The corporation can also choose another method of intimidation – to buy out the share of the team of authors for almost a penny. And this share is intellectual property. Igor Pivovarov, for obvious reasons, tries to comment cautiously on these options: "Perhaps the corporation is trying to motivate the team with such strict conditions so that it is afraid of failing the project. It's like the sword of Damocles. It is clear that she is trying to be safe a hundred times, bearing responsibility for public money, but is such super-rigidity appropriate? I think not, because Rusnano was invented as an institution for the development and support of innovations. This rigidity is depressing, because it probably repels a lot of promising projects."
It would seem that more rigidity should be expected from a private investor investing personal money, but, according to some commentators, the requirements of private investors on average in the market are much softer. Another thing is that there are fatally few such investors. That is why the state invents its own institutions to support innovators. But is the support that in case of failure of the venture (!) for example, to throw researchers who have distinguished themselves in science into a debt pit or to sell intellectual property taken from them to more successful businessmen?
Pivovarov and the team agreed to be "rigidly motivated" in the success of the project and therefore continue to fulfill the numerous requirements of the corporation that remained even after the signing of the investment agreement. Until the team checks all the boxes, they will not give money. The new company expects to complete all procedures by August.
Three years for RusnanoMoney is primarily needed to create a complex mold for cuvettes, on which a nanocoating with a blood clotting activator will be applied.
Since the requirements for this consumable diagnostic material are large, such a mold can cost up to a million dollars. Those cuvettes that are being made now are far from perfect – they are suitable for research tests, but not for medicine. Of course, the money will immediately go to pilot and mass production, which will have to meet international quality standards. The priority tasks include the creation of a patent protection plan, and then patenting in those countries where the technology is planned to be distributed. It can also take up to half a million dollars. While there is no money, Pivovarov, in order not to waste time, is already negotiating with potential co-executors. Four companies are developing for the "Hematology Corporation" only for the possibility of receiving an order.
The total funding will amount to 640 million rubles. This money is calculated for the first three years of the project's life. They will arrive in tranches. The first year is the development of prototypes, the construction of a pilot production and the creation of an experimental series of diagnostic devices. The second year – technical and clinical trials, licensing of production, certification of products. The third is the beginning of sales and reaching the break–even point. It is assumed that from this time the company "Hematology Corporation" will start making money and will not need external injections. According to the business plan, the project will reach cruising speed in five years - then the company will be able to supply about 200 devices and 7 million cuvettes to the Russian market. It is assumed that by this time the new business will already be interesting enough for the Rusnano Corporation to exit it with a profit. It has not yet been discussed exactly how, however, in a favorable scenario, the options are standard: selling a stake to a strategic investor or entering an IPO.
Despite the fact that the three-year plan does not prescribe access to the world market, the company will begin to prepare for it from the very moment the money arrives. "We will draw up a separate business plan for entering the world market. This is not an easy task, because only at first glance it seems obvious that the whole world will immediately seize on our unique diagnostics," says Igor Pivovarov. – I do not exclude that small sales abroad will begin without our special efforts, but it will take a lot of work for a mass exit. Nevertheless, I am an optimist and I think that by the end of the third year of the project's development, we will begin to explore the global market." The market for such tests in Europe and the United States, according to estimates, is about a billion dollars a year. But it should be borne in mind that the emergence of a unique diagnostic method will contribute to its expansion, because no one is doing such tests yet.
Portal "Eternal youth" http://vechnayamolodost.ru08.06.2010