Risk in Biotech

Biotech risk includes technical, commercial and regulatory.

1.  This Forbes article (Nov 11) by Bruce Booth (the Life Sci VC) discusses late stage versus early stage risk. He starts with discussing the how perceptions of risk are the driving factor in biotech investing, and goes on to list the risk factors others than the scientific risk.  These include regulatory, financing, liquidity, execution, reimbursement and idiosyncratic safety risk.  He concludes by suggesting that venture capital should focus on early stage investments, leaving larger players with deeper pockets and more resilience to invest in late stage work.

2. In an Xconomy article on use of Twitter in biotech tweets on the subject of risk are quoted which provide insights as to how the different types of risk are perceived.  Technical risk is preferred to regulatory and commercial risk, since technical risk can be understood and mitigated, whilst regulatory risk is seen as ‘random’ and commercial risk is a moving target.

3. Life Sci VC (Sep 12) mentions a much discussed problem, that of lack of reproducibility in scientific research. Figures of 25% and 6% are quoted for reproducibility of studies in the healthcare field.  The article discusses possible solutions, including blind studies, showing all results, repeating experiments, having appropriate positive and negative controls, using validated reagents and using the appropriate statistical tests.

Tips for European Patent Office (EPO) Oral Proceedings

1. Many attorneys speak to fast. If you think this may be the case for you, consciously slow down, especially at the beginning when you may be nervous.
2. Make sure the Division or Board is keeping up with you.  They will need time to absorb complex arguments or to read any document that you refer to, and they will not necessarily indicate when they need more time.  Try and say the same thing in different ways if you are making a complex point.
3. Be ready for anything to happen. Oral proceedings are often full of surprises and a case can easily deviate to, and be decided on, a point that was a side-issue in the written procedure.
4. Have plenty of ideas for auxiliary requests, even if you don’t actually prepare auxiliary requests based on the ideas.  That will help you to be creative on the day and respond better to whatever happens.
5. In inter partes proceedings opposition be ready to deal with arguments that are introduced for the first time at Oral Proceedings.  If they are persuasive they could work.
6. Be on the ball about your last chance to file amendments, and make it clear that when you continue to believe that you will have further opportunities to file auxiliary requests as required.
7. If your client is not there, make sure you know which amendments would be acceptable or not acceptable to them.
8. Try and respond to every point the EPO or other side raises, as you might not necessarily know how the EPO is thinking about each issue.
9. Don’t give up and don’t get tired.  Keep arguing all the way down the requests.
10. Don’t get too upset. If injustice happens, accept it and move on. Don’t be distracted by it.

Technical Points on Patent Claim Drafting

1. It must always be remembered that a claim will be examined, and possibly also opposed/litigated, in many different territories, each having different criteria for validity and infringement.  Whilst there are of course many similarities between different Patent Offices, one needs to think about patent practice outside the territory in which one is based.  This will be particularly relevant when considering claim language for inventions relating to therapy and diagnosis, and perhaps also to situations where a doctrine of equivalents may be applicable.

2. A patent claim should be as clear as possible, and if there are any potentially ambiguous terms definitions of them should be provided in the specification, with the aid of numerical ranges if appropriate.  If, for example, a person is defined in a claim as being a non-smoker, think about whether it would be useful to define non-smokers as having had less than 10 cigarettes in the preceding year.  Clearly features which will be important in distinguishing over the prior art will need to be looked at carefully.  Many Patent Offices (including the EPO and USPTO) are strict on clarity.

3.  A common mistake is for method claims to refer to too many steps, making it less likely that any single party will carry out each step.  For example, taking the following claim:

A method of turning copper into gold comprising:

– heating the copper to 55⁰C, and

-transmuting the copper to gold.

It could be shortened to:

A method of turning copper into gold comprising:

–          transmuting copper which has been heated to 55⁰C.

Thus method claims should be reviewed to see whether any steps can be taken out in this way, which effectively increase their breadth thus providing better protection.

4.  There may be advantages to adding steps to dependent method claims so that they extend to making the commercial product.  Normally the protection afforded to method claims will also cover the direct product of the method.

5.  Don’t make the assumption that long method claims where different steps will be carried out by different parties are worthless.  In some territories, such as the US, these claims may provide useful protection, where for example inducement to infringement can be shown.

6. Whether or not the preamble of a claim is limiting seems to be an open question in many territories.  In the US case there is case law to support both positions. Claims should be drafted thoughtfully with this in mind.

7. Don’t have too many claims.  In many territories this will lead to an increase in costs.  Whilst in many cases claim number can be reduced at regional/national phasing, in some territories that will not lead to a decrease in claims fees.

8. Make sure you have method claims that are equivalent to the use claims that may be present.  Use claims not allowable in certain territories, such as the US, and so in such territories you will need to rely on method claims.

Tips on Running a Biotech Company

1. Life Sci VC discusses the pros and cons of having a Scientific Advisory Board (SAB).  They can provide objective, external perspectives and be a conduit for idea exchange. However they can be expensive and sometimes have difficult dynamics if collaborators are involved.  It should have 3-5 core members with ad hoc members invited as needed. Nobel Prize-winning scientists may help attract investors, but may not make much of a contribution. It’s good to have a mix of backgrounds and experiences.