Funding and Commercialization in Science
You can find the concise version featured on the Longitude SoundBytes podcast here: 126 Tips on Science Funding, Communication, and AI | Rowland Pettit Transcript Louis: You studied biophysics as an undergraduate at Duke University, then went on to Baylor College of Medicine, where you earned an MD and a PhD in bioinformatics and artificial intelligence. You also received an MBA from Rice University while at BCM. Why did you choose to pursue an advanced degree in business while already pursuing advanced degrees in science and medicine? Rowland: Well, thanks, Louis, and thanks for having me on. I mean, this is a really great question, and it was one that I debated at the time. I mean, I definitely do believe in the value of formal education. You don't know what you don't know. And I have tremendously benefited from having incredibly smart people take the time to frame things and explain things to me. So, the blanket answer is, I was just curious. But the formal answer would be, I really wanted to understand the commercialization process. I had at that point, this was 2019 when I was considering it, I started in 2020. But I had done a good amount of medical school and PhD graduate school, and I had seen a lot of interesting innovation potential both in science and medicine during training, both certainly in med device coming to market, when I started the PhD, frontier science and its clear applications to both human health and agricultural science, etc. And I didn't really understand how people thought about bringing those to market. I was certainly getting to see how people were reacting to that, how they were, you know, performing clinical trials to test it or think about rolling it out with informed consent and bringing it to patients or otherwise, but I just wanted to understand that. So, I, you know, took the next step and tried to think about if I did want to understand the business side of science and medicine, what would that look like? I was in Houston, which has the Texas Medical Center, a huge medical center. I was very fortunate to train at Baylor College of Medicine, which is a top medical school and also pursued my PhD there. Right across the street is Rice University, which is an enormous resource. They have an excellent entrepreneurship-focused MBA program. So, the long story short of it is, I was able to get a little bit of a discount as a current student and apply for their evening MBA course, which is still an MBA. It's just in person at night, which gave me good flexibility to do my PhD during the day and then from like six to nine at night, learn about commercialization and just the overall business practices with some focus in medicine, but of course, also just the general MBA training as well. So, the long story short is, I really wanted to understand how you get from A to B, right? Not just say, hey, we have a product and here's how we're going to implement it responsibly for, you know, in science or for patients. And so, that's what drove me to pursue the MBA during my MD PhD. Louis: That's an excellent overview, Rowland. We are sure to get into some of your work in those fields. I'd like to start with a high-level question. Could you briefly explain how research in science, technology, engineering, and math gets funded for both public and private sector projects? Rowland: Louis, I love this question. And when you sent it to me, I was really excited to get to talk about it. This is one area that I do think I've had a front row seat in order to see all the areas of funding throughout all stages of the process. And there are several different ways that we could try to think about this. But in the interest of time, I'll focus more on the practicalities of it. But I would, you know, if we need to, we can talk more about it. So, let's start with what I, you know, maybe would consider more, you know, blue sky, primary research for the sake of expanding, you know, human knowledge of the world. And that oftentimes the traditional heuristic would be that occurs in academia. That doesn't perfectly hold true. There's plenty of big biotechs and others that are doing great primary science, as well as startups. But the way the majority of the world works, I would still think, would be in funding academia, which oftentimes comes in the forms of grants. Then there is the commercialization stage funding, which is kind of the bridge where you've got a partnership between academia and industry for some sort of commercialization, with the two working together. Then there's the return on investment models. So, this would be kind of debt-based financing, where you might get a grant that has some requirement to pay back the capital plus a little bit of interest. And then, of course, there's another area that I'm particularly interested in, which is venture capital and private equity, where you're actually going to commercialize a product fully and sell a piece of a company in order to realize its value. So, let's briefly touch on each of these if I can. Louis: Sure. Rowland: So, starting in academia, right, this in theory provides one of the avenues for the greatest degree of research freedom, where academics could do primary research on fundamental problems without having to be focused on some near-term milestone of translation of that science or commercialization of that science. This is just science for the sake of science. And that, if there's no necessarily immediate material realized gain, is primarily funded through the government, honestly, or individual institutions like the American Heart Association or others, right. And the way that works is through grants. These are federal grants delivered through individual agencies. So, as part of the congressional budget, Congress will pass certain amounts of taxpayer-funded dollars that can go to the National Institute of Health, the NIH, the National Science Foundation, NSF, or defense-specific organizations. And based off of where they put money allocations is where those grants can fund research in those areas, right. The NIH is divided up into several institutes. The biggest would be the National Cancer Institute (NCI), but there are all sorts of institutes for pretty much any amalgam of interesting processes. There's one for biomedical engineering, one for the National Heart, Lung, and Blood Institute (NHLBI), and so on. The idea is taxpayer funding goes to these institutes, goes to the NIH or NSF, goes to one of the institutes. And then those institutes receive grant applications from academia saying, "Hey, I would like to pursue research in this space." A review process is done to assess the merit of the grant and what it's proposing. The grant is scored, and in this context, lower is better, similar to golf. And then if your grant scores lower than a certain threshold, let's say in the 20s or so, then it is considered acceptable or suitable for funding. It meets the funding payline, and then funding is distributed to that academic institution. That's a long process. Usually, grants are reviewed three times a year, and it takes almost a year for them to get executed. So, this is a long lead time. It is a significant amount of money. For instance, a primary grant, an R01 grant, could be a multimillion-dollar grant to a Principal Investigator (PI) for three to five years for a specific research initiative. The last point I want to make before we move on is that this involves a large sum of money with relatively little gatekeeping in terms of outcomes. Anything accomplished research-wise must be attributed in publications to the funding source, but there's no obligation to repay the funds. It's purely an investment in primary research, funding and driving the research institutes we see today. When you receive an R01 grant, for example, a $3 million grant supports your lab. What is less discussed but true is that a portion of that grant, on top of the awarded funds, goes to fund the institute itself for … This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit rowlandpettit.substack.com
