BCM Technologies: An Interview with Caroline Popper, M.D., M.P.H.
Baylor College of Medicine strives for excellence in research, education, and patient care. However, there is an unstated element of its mission statement: make a global impact through commercial activity. The vehicle that makes this happen is BCM Technologies.
As the company creation subsidiary of Baylor, BCM Technologies promotes the commercialization of faculty inventions by guiding them through the start-up process into self-sustaining companies. VIICTR.org spoke with BCM Technologies President Caroline Popper, M.D., M.P.H., about what it takes to launch an early stage technology into the public marketplace.
What is BCM Technologies?
BCMT is the Baylor company that builds companies. Our mission is to create companies based on the inventions and the know-how that emanates from Baylor scientists and clinicians. An invention could have intellectual property associated with it, or it may not be patentable but is still commercially interesting with potential to build a business around it. I talk with faculty members who think they have an idea and to outsiders who give us a market perspective. Talking to outsiders can be a litmus test, a way of asking, “Who cares?” and “Who cares enough to write a check?” to become a partner, customer or investor.
In an earlier interview, we spoke with Michael Dilling of the Baylor Licensing Group about patents and intellectual property transactions. How does your work differ from what the licensing group does in terms of connecting with a commercial partner?
I work very closely with Michael because we do not know if an invention would be best licensed by his group or if it has sufficient heft to build a company around it. If an idea is going to be licensed—a self-contained piece of intellectual property to be exploited by another company—then it may best be out-licensed by his group. We ask ourselves, “Could we build a company around it?” If the answer is yes, then it may become a “PodCo” or BCMT start-up company. More likely than not, there will be a very robust patent application associated with an invention to license, which is usually a piece of intellectual property and Michael’s group will handle the negotiation to license this to the start up company. That said, we are currently building companies based on know-how and the broad expertise and reputation of faculty, rather than patents.
How did you come up with the term “PodCo” to describe these start-up companies?
I have had the good fortune of having helped create companies from scratch in a variety of settings. Over the years, I came to the conclusion that the “Achilles Heel” of these start-ups is the premature separation from their “parents,” or scientists, in the case of Baylor. If you tear an invention away from its “parents” too soon, you lose a lot of the intellectual capital from which the start-up company originated. Furthermore, it is difficult to get seed funding for early stage companies, so you have to be very capital-efficient early on. The “PodCo” concept was born out of necessity and the recognition of these realities…the need to combat prematurity in a capital-efficient manner.
PodCos are designed to use very little money to get to the next stage—the point at which other people will care enough about the business opportunity to invest in it. While the company is a “PodCo”, we can use the $500,000 piece of equipment in the scientist’s lab; the scientist can finish the clinical experiment and get it published; and we can find outside investors. If we achieve validation -- be that market or technical validation, the PodCo will be poised to emerge from its incubation phase and continue as an entirely independent company.
Does the company stay under the auspices of Baylor, or does it become a self-sustaining entity?
A PodCo is an independent company that uses Baylor resources. Like a college student who comes home after graduation, the goal is to wean them off their subsidized living arrangement in order to achieve independence. When the Company is generating sufficient revenue from partnerships, investors, or sales to buy its own equipment, hire a full-time CEO, get all the essential people in place, then it is time to sever its financial dependence on Baylor. However, the College may still have an important ownership position in the company. The critical first phase is our primary focus, because that is where most start-up companies succeed or fail.
What happens with the faculty member?
Theoretically, it is possible for a faculty member to move with the company, but he or she typically is not interested in evolving into a business leader. In most cases, the investigator stays at Baylor but continues to play a critical advisory role in the company. We like this arrangement because obviously the involvement of the faculty member has been essential in getting the invention to this point and highly valuable in the company’s growth and evolution.
What is the ultimate benefit to Baylor and to its investigators/faculty?
There are several benefits. Commercialization is one of the potential outlets for an invention. It is what many faculty members want and Baylor is pleased to support inventions that offer the potential for commercial viability. If a patent is involved, Baylor offers the investigator a percentage of the proceeds as well as shares in the new company.
From Baylor’s perspective, the inventions of its faculty members can impact large numbers of patients and their families. As a shareholder in the company, Baylor can receive a re-investable return on what may be a considerable initial investment.
Can you give us an example of a current PodCo and how it was developed?
Currently, we are working with two Baylor faculty members, Joseph Petrosino, Ph.D., and Nadim Ajami, Ph.D., who conduct microbiome research in a world-class lab.
Since there has been increasing interest in the microbiome and its relationship to diseases, we partnered with Dr. Petrosino to form Metanome. Metanome is an example of a marketable service rather than a product. From its first day as a PodCo, we have focused on getting customers and repeat customers. We are in the process of meeting with a few outside investors and are focused on growing the business, adding sales specialists, outside Board members and business processes. Thanks to seed funding from BCM, we did not need to buy equipment, which would have been very costly. Dr. Petrosino is actively involved in Metanome, and we get his input constantly. (To learn more about Metanome, visit www.metanome.com.)
How do you market this type of service?
There are several strategies involved. Pharmaceutical companies that have drugs which target diseases of the intestinal tract, are the most obvious customers because they, so they have samples that require this kind of analysis. Other specialized companies would be interested in knowing if these drugs have any side effects affecting the intestinal tract. Then, there are individuals who are interested in knowing if the bacteria in their intestinal tract are in balance, so this could become an ongoing service. We are starting to look at other segments of industry: and other potential markets to identify other untapped needs that this service may be able to fill.
Can you tell me about other activities in which BCMT has been involved?
This year was very exciting because we helped bring to fruition a joint venture agreement that resulted in clinical diagnostic venture, Baylor Miraca Genetics Laboratories. This new company will be built upon Baylor’s existing Medical Genetics Laboratories, which engages in clinical laboratory testing. Miraca Holdings, Inc., a Japan-based holding company operating in the healthcare sector, is dedicated to in-vitro diagnostic, clinical laboratory testing. One of its companies, Miraca Life Sciences, is based here in Texas and is one of the largest independent anatomic pathology businesses in the United States. Miraca will provide its expertise and capability to commercialize the joint venture. The College will share ownership and governance this new company. This new jointly owned company will be the largest for-profit company in the area and I think it will provide momentum for many of our commercial activities, while contributing to Baylor’s impact at the local, national, and international levels.
Suppose I am a faculty member working on an invention but I do not know if it has commercial potential. What do I do?
If you have an idea or invention that you think has market potential, then email me (www.bcmtechnologies.com/contact.aspx). I am here to talk to you and help you decide if there is a company worth pursuing. I have many conversations with researchers, and I consider all these interactions to be important and valuable. The questions I ask are externally focused: What needs can we fill? Who else is trying to solve this problem? Who is the competition? Because my perspective is externally focused – I have a way of thinking it through commercially – I am very happy to guide faculty through that process.
The College is willing to have substantive conversations with new faculty about their ideas; this is an area of huge level of support from BCM leadership That support does not translate to an open checkbook, but the College has a real interest in supporting faculty and making ideas become businesses if there is the reasonable potential for commercialization.