06 Oct Session D – Entrepreneurship Track

Entrepreneurship Track – The Government as a Customer

Moderator:

• Geoffrey Ling, M.D., Ph.D., CEO, On Demand Pharmaceuticals Inc.

Speakers:

• Captain Joseph Cohn, Ph.D., Chief, Research Program Division, Defense Health Agency
• Michael Ehret, Director of Business Development, ASELL
• Michael Fitzpatrick, Ph.D., President, Cellphire Inc.

QUESTION: What I want to do here is address the issue of when you build business with the government. One area that people focus on is how can I get the funding, right, because it is non-dilutive funding. However, there’s something else too and that is when you do work with the government you’re trying to do things for.

I think the beyond the funding side of things, there is that chance to work on these big programs and arguably some of these programs are such high risk that you never actually are able to get private sector funding to initiate. So, from a scientific perspective, as you get traction, you get to work on some really important work that no one else is going to work with. There’s a lot of really talented smart individuals on that. So from a small company working with the government, you almost get a free scientific advisory panel. You’ll get really good feedback on your technology that you know is unsolicited oftentimes. I think people outside the government will also want your product, and you know the guidance you’ll get will actually help you do both of those.

You’ll hear from a lot of folks that it’s completely different working with the government. Government clients are nothing like working with the private sector, and I think there’s a lot of truth to that. But ultimately, you’re reporting to somebody, you’ve got a board you’ve got investors you’ve got clients of some sort. And the same principles of being successful hold true to the government as well. You got to be a good communicator.

In spite of what you may have heard about working in the government, The government does care about schedules and milestones and budgets, those are all really important. So I think there’s some foundational things that are very similar, but there are a lot of differences. 

QUESTION: How does the government identify some of its big challenges? And then once they identify those challenges, how do they get access to you?

From the perspective of military medical research and development, a lot of what we invest in is focused on developing capabilities that will allow us to manage the challenges of the future. And the way we understand what that future environment is, is that we will be looking at a lot of the strategic documents that are developed across the DoD and across the federal government. Everything I’m going to talk about is available in the National Defense Strategy from 2018.

If you take a look at all of those strategies, they’re not necessarily all focused on medical, but each of them has elements that, if you read between the lines just a little carefully, you’ll see there are many medical challenges that we are looking at addressing now and into the future. So for example, you can see that very likely we will be in environments where we have degraded or denied communication so we limit our ability to do real time reach back, we might have challenges with air superiority right now we don’t have those challenges in the battlespace, but down the road, we make we can’t always assume we’ll have that that level of superiority and so at the end of the day this boils down to having to worry about things like logistics challenges. Also wearable sensors getting ways of understanding at a glance the health of our individual warfighters as they move through their missions. Another area that we focus on is combat casualty care that’s where you’ll find things like hemorrhage control traumatic brain injury management. Forward surgical and routine care research activities.   

I had a good idea of what the needs of the military were, but then my transition into the civilian world showed me that they weren’t unique to the military, those needs were worldwide, and an innovative idea that has a worldwide consequence can improve things. But these things need to be funded and funding is difficult especially for projects that might be considered unique to the military or might have a small threshold of customers and not be highly profitable. Getting private funding can be very difficult.

And the advantage to us has been that because what we were doing was not considered a highly marketable profitable field, the military has been able to fund us through what people consider the valley of death, or the gray zone from private funding. This is where you’re struggling to get into that phase one clinical trial or you’re struggling to get your first commercial acceptance of a product or FDA approval, and the military sees the need, has confidence in you to build that product, and then gets you through that valley of death to where you can become very attractive to private industry.

The military and other government organizations have regulatory experts who have FDA experience or civilian experience. They have patent experience, and you get them for free. You get that great advice for free.

The other thing you have to remember is beyond the military and the government as your customer, Congress is your customer as well because they’re the ones that provide the funds. So we have made an attempt to keep our congressional representatives aware of what we’re doing, not in the way of trying to direct the military to give us money or direct the military to fund our program, but we’re able to keep our congressional group advised of what we’re doing, to see the positive aspects about what we’re doing. And if a question comes up about funding, we know we have their support. And so that’s been a key to our success as well.

QUESTION: So let’s be specific here, how do they know where your interests are, where I mean specifically when and how did they get to you, or some of your people but they’re the appropriate people.

I’m going to do it from a healthcare medical perspective, because that’s really what we’re talking about right now. It’s not enough to just have a brilliant idea, there has to be a way to align what your brilliant idea is to something somebody needs on a back-end. And so, the general approach to doing that is to reach out across the services scooping up ideas and needs and then working them through a process. This can happen on the government side to make sure that there’s a strong enough demand for whatever that need is that it would allow us to then take the next step which is to determine whether or not there’s a simple way to address that need by just going into the open market. In general, the things we need in the department are not easily purchasable just off-the-shelf shrink wrapped and so what we ended up doing is looking at that need in terms of how much research we need to invest in it, versus how much product development activities we need to invest and how those two things marry up, that’s really what that lifecycle management process is so that’s the sort of thing that happens.

So the common ways of doing that are generally through a request for information, request for proposals, and broad agency announcements. So when you see these RFIs, we’re trying to gauge where that market space is and where we need to make our investments. When you see a request for proposal or request or a broad agency announcement that means we’ve already determined where we need to make our investment and then it’s over to industry, academia to work with us to better understand the great idea you have then package it up as a proposal.

QUESTION: How do I convince the government that my idea is something that it needs to fund?

You really want to engage your potential customers as early as you can. And in some cases, things like conferences and industry days let you interact with potential government clients in an informational capacity. Be very careful on procurement, once things go so far along, conversations are shut down to keep the competition fair. 

The government wants to be aware of what’s out there, so find those opportunities. Understand what you are bringing to bear, what is your product, how might it fit in? Then try to identify the government clients who you think might be interested and just see if they’re open to talk at a conference or industry day, that sort of thing. And then request feedback anywhere along the process. So, there’s this formal acquisition process and there’s opportunities to submit white papers and a lot of times clients will give you feedback on that. All those things are really important to get in kind of the head of the government client.

QUESTION: How do you understand the current state of need of the government side?

Their strategic plans are published, and they’re made publicly available. You’ve got to search them out on the web, but they are there. The other place is FedBizOpps which is a website where every federal agency lists the things that they’ve got funding for or need there.