AMED produces guide for university researchers to founding drug discovery ventures — Investor support and IP strategy explained

What does it take to build a business by launching a drug discovery venture based on your own technology and research findings? The Japan Agency for Medical Research and Development (AMED) has produced a startup guide for establishing university-based drug discovery ventures. It can be downloaded from the AMED website.

The role of ventures in new drug development has grown year by year, and in 2023 ventures accounted for roughly two-thirds of all Phase I trials conducted worldwide. Japan, however, has many drug discovery seeds yet sees limited investment in drug discovery ventures and has a low number of startups. For this reason, AMED is advancing support for drug discovery ventures through the Strengthening Program for Pharmaceutical Startup Ecosystem, Cyclic Innovation for Clinical Empowerment (CiCLE) program, and the Alliance program for Innovative Medical/healthcare research by Government-Academia-Industry Collaboration.

Even when researchers consider founding a drug discovery venture based on their own work, many obstacles stand in the way—a lack of adequate intellectual property strategy, unfamiliarity with investment agreements with investors, and more.

The Guide for University-Originated Drug Discovery Venture Startup is designed for university researchers who "want to bring their research and development into society." It covers the significance of founding a drug discovery venture, how to think about support from investors and intellectual property rights, contracts, and where to go for advice.

The guide starts with the reasons why founding a drug discovery venture is needed, then explains in six steps the knowledge and action items required. By following each step, researchers can establish a well-structured drug discovery venture—one that secures funding, personnel, and rights in a way that fits the researcher's own working life.

Step 1 explains the significance and mechanisms of founding a drug discovery venture.

Step 2, "Building a Drug Concept," covers the perspective of a target product profile (TPP) for connecting a seed to development, the data required from a fundraising standpoint, and information on support resources.

Step 3, "Securing Investor Support," explains the action items needed to secure the funding (such as VC investment) and hands-on support that are essential for drug development.

Step 4, "Developing an Intellectual Property Rights Filing Strategy," explains how to think about filing strategy--a critical consideration when looking ahead to the commercial viability of a product and its financing--along with real-world examples. It analyzes and explains filing strategy using actual cases, covering the scope and timing of patent applications across multiple drug discovery modalities, making it useful for a wide range of university researchers.

Step 5, "Signing a Technology Transfer Agreement with the University," explains the checkpoints for contract negotiation needed to obtain an intellectual property license from the university and enable exclusive and continuous business operations.

Step 6, "Completing the University's Side-Job and Conflict-of-Interest Procedures," covers the main internal university rules that must be addressed when founding a drug discovery venture.

President Hitoshi Nakagama of AMED commented: "As supplementary materials, the guide also lists public support programs, VCs familiar with drug discovery ventures, and information on attorneys and patent attorneys, so please make use of it."

Director Takashi Uchida of the Department of Medical Innovation Ecosystem, commented: "There are many differences between research and commercialization—in how data is collected, for example, please consult the 31 VCs registered under the Strengthening Program for Pharmaceutical Startup Ecosystem."