Tuesday, November 8, 2011
9:15 AM - 10:10 AM
Panel - Philanthropy as Risk Capital
Rashmi Barbhaiya, Ph.D. , Chief Executive Officer and Managing Director, Advinus Therapeutics
N. Anthony Coles, M.D., MPH , President, Chief Executive Officer and Member of the Board, Onyx Pharmaceuticals
Susan Wolf Ditkoff, Partner, The Bridgespan Group
Howard Fillit, M.D., Executive Director, Alzheimer's Drug Discovery Foundation
George Vradenburg, J.D., Chairman, USAgainstAlzheimer's
Katie Hood, M.B.A., Senior Fellow and Visiting Lecturer, Hart Leadership Program at Duke University's Sanford School of Public Policy
A new class of medical foundations known as "venture philanthropies" - organizations of a philanthropic nature that operate in venture-capital mode - are bringing a sense of urgency to the rest of the medical research community. By taking financial and strategic risks to turn discoveries in the lab into cures for disease, they are having an outsized effect on the development of new drugs, devices and diagnostics patients so desperately need. This panel discussed the opportunities and limitations of philanthropy as a co-equal form of capital for medical research and development, and highlighted examples of the ways in which philanthropic investment can reduce risk in the R&D enterprise and attract other forms of capital.
Moderator Katie Hood, Senior Fellow and Visiting Lecturer at Duke University's Sanford School of Public Policy, opened the session by asking each panelist what they thought of philanthropy as risk capital.
Advinus's Rashmi Barbhaiya offered interesting insights as to the nature of industry-nonprofit relationships, saying that in terms of Advinus' relationships with outside groups, "these organizations have leveraged the most because they did not have the desire to control us."
Onyx Pharmaceutical's Anthony Coles offered three keys to success in managing these relationships: shared risk and shared investment, direct leadership, and direct involvement and shared experience. Later he added that "the role of philanthropy will be critical" but they need to consider their business models and point of view.
According to Susan Wolf Ditkoff from the Bridgespan Group, "[venture philanthropies] can invest long-term, they can be an honest broker, and they can deploy capital quickly"but these groups need to be aware of common traps, including the need to set targets and impose self-excellence.
Howard Fillit, Alzheimer's Drug Discovery Foundation, gave a broad historical review of philanthropy's role in medical research, as well as the development and evolution of ADDF. He referenced the realization of the organization's need to focus on all stages of the development pipeline, saying "we realized we would have to play a role in catalyzing greater (commercial) interest" and how that lesson can inform the actions of other philanthropists.
Philanthropic investor George Vradenburg, Vradenburg Foundation and USAgainstAlzheimer's addressed the role of philanthropists in funding network initiatives that wouldn't be possible for commercial entities to pursue individually. He further highlighted the ability of venture philanthropies to "invest in specific pieces of the system" where the ecosystem has seen process failure, and be able to play the role of strategic investor and collaborator.
The panel faced a variety of interesting questions from the audience, including mechanisms to expose and vet new venture philanthropy models that could be valuable at accelerating philanthropic, and other, investment.