Art Pappas: Two Big Reasons Why Now is the Ideal Time for Academic Innovation

Art Pappas, life science investor and managing partner of Pappas Ventures, delivered the keynote address at the 2016 Open Thinking Innovation Showcase, an event held by Wake Forest Innovations to show off new and upcoming inventions from researchers at Wake Forest School of Medicine and Wake Forest University.

The message that Pappas had for the academic and industry experts in attendance was simple: now is a crucial time to invest in innovation that improves health.

WFI-Post-OpenThinking-Pappas

Why? Pappas believes that investment in academic innovation requires two conditions: the right innovation landscape and the right kind of inventors.

Innovation Landscape

The innovation landscape is constantly evolving, and trends in industry affect innovation in academia. As industry continues to look for new sources for research and development, many new medical inventions are growing out of deep roots in academic institutions.

“Big pharmaceutical and medical device companies have increasingly outsourced their research to contract research organizations over the past two decades,” said Pappas.

As research moves out of large companies and into external organizations, academia has a valuable opportunity to partner with industry, and industry is interested in these kinds of partnerships—evidenced by the increase in sponsored research across the nation.

Academic Inventors

More than ever, academic institutions are creating the kinds of inventors that attract industry partners, as well as investors.

“There are three traits that investors look for in academic inventors,” Pappas said. “Are the inventors passionate about their technology? Can they articulate how to develop their innovation through the proof of concept stage? And do they have support from their institutions to commercialize their inventions?”

There is a rising trend in academia to encourage faculty in becoming academic inventors who display these qualities. Through the creation of entities like Wake Forest Innovations, passionate inventors find an internal partner with the resources and expertise they need to commercialize their ideas. This combination within an academic institution makes academic researchers more appealing partners for industry leaders.

Point of Opportunity

When the innovation landscape and academic inventors intersect, this convergence creates a point of opportunity for both parties.

What’s more, the partnership between industry and academia creates an ideal situation for investors looking to invest in life sciences. When the trifecta of academia, industry and investors unite, together they have the ideation, capabilities and resources needed to develop novel medical technologies that improve health.

The Catalyst Fund, a $15 million technology development program created by Wake Forest Baptist Medical Center, is an example of the opportunities that arise through these collaborations.

“The aim of the Catalyst Fund is to increase the value of licensing candidates and transactions and attract top tier, high-quality partners,” said Pappas, whose firm—Pappas Capital—manages the Catalyst Fund.

Over the next three to five years, Pappas Capital, which has invested in over 70 companies since its founding in 1994, will oversee the fund’s investment in the development of approximately 25 proprietary technologies from Wake Forest Baptist with the potential to create licensable or venture-ready products. The driving philosophy behind the Catalyst Fund is that well-managed investment funds propelling the right technologies increase their overall value. As a result, the improved technology will attract better industry partnerships and higher profit margins—the trifecta in action.

Pappas underscored that the opportunity to invest in high-potential early-stage novel drugs and devices to create a product pipeline ripe for private sector commercialization is the result of two key elements: the rising academic innovation at places like Wake Forest Baptist and the collaborative landscape facilitated by opportunities like the Catalyst Fund.