‍Introduction 

Moving research from concept to market is like conducting a symphony - there are numerous players and stakeholders, each bringing their unique expertise to work in harmony and advance a project. As research continues to speed up and span across disciplines, the challenge of bringing new ideas and innovations from the academic sphere to the commercial realm becomes increasingly crucial. For instance, many of the top-selling therapeutics available today were originally developed in academia and had to navigate the difficult path of translation.

The process of transforming a therapeutic or technology from the research and development stage into a market-ready product or service is intricate and laden with obstacles. Presently, it calls for the cooperation and coordination of a multitude of organizations, along with funding, expertise, collaboration, and various other resources and support. BioDAOs streamline the process by consolidating all pertinent stakeholders into a single, internet-based virtual organization. This vertical integration enables a seamless end-to-end approach, fostering increased efficiency, collaboration, and resource-sharing throughout the entire research and development journey.

In this brief piece, we delve into the challenges and opportunities associated with translating research from academic institutions and investigate how organizations like BioDAOs are contributing to the support and facilitation of this vital process.

The Primitives of Biomedical Discovery and Development

It's noteworthy that the majority of approved medicines, around 60%, have their roots in academia, with the remaining 40% stemming from pharmaceutical research and discovery. Early-stage therapeutic research generally involves target-based or phenotypic screening using cell lines (in vitro) and model organisms (in vivo), depending on the disease model being studied. This work is often grant-funded and carried out in academic labs until patents or other intellectual property (IP) are filed by the university's technology transfer office (TTO).

The university then licenses the IP to an existing pharmaceutical company or a biotech startup, which takes on Investigational New Drug (IND) enabling studies. These studies involve more in vivo testing in increasingly larger animals to evaluate safety and efficacy. This phase is typically executed by private biotech labs and/or contract research organizations, funded by venture capital and/or pharma balance sheets. Clinical development kicks off when the company files an IND with the FDA, progressing through Phase I for safety, Phase II for early signs of efficacy, and Phase III for determining full approval.

Once an experimental medicine has undergone all clinical development phases, the company files a new drug application (NDA - or MAA), which can be approved or denied by the FDA (or EMA). If approved, the company can then market and distribute the therapeutic. This process entails a blend of patient- and physician-targeted marketing to ensure the maximum number of eligible patients receive the treatment.

Throughout this progression, the therapeutic IP is often transferred among multiple organizations, including academia, biotech, and pharma. Funding typically comes from a mix of government agencies, venture capitalists (VCs), and pharmaceutical companies. The goal of a BioDAO is to consolidate all funding and development functions for a specific therapeutic area within a single organization, streamlining the entire process.

What is a BioDAO?

A BioDAO refers to a decentralized autonomous organization (DAO) that specializes in harnessing the collective efforts of a diverse group of stakeholders to expedite the development and distribution of biotechnology products and services, spanning from early concept to market. BioDAOs fund and incubate projects during the initial stages of translational research, often through IP-NFTs, even before a company is established. While venture studios and corporate venture arms share similarities, BioDAOs stand out as community-owned and operated entities.

Contrasting with venture studios and corporate venture arms, where investment is the primary activity and profits are distributed to shareholders or partners, investment in BioDAOs is a secondary endeavor within the community, akin to venture investments by a university endowment supporting the university's operations. Returns from BioDAO investments are channeled into funding further research and operations, mirroring how a university endowment's investments contribute to additional research, facility improvements, and the university's functioning. However, BioDAOs differ from universities in their ability to vertically integrate the scientific discovery and commercial development of biotechnology products and services for a specific indication or therapeutic area, unifying all relevant stakeholders within a single, internet-based virtual organization.

During a project's early stages, BioDAOs engage in activities such as inventing novel IP, funding and developing research from its members and consolidating biomedical datasets among their members. As projects advance and gain value within the community, BioDAOs allocate more resources toward company formation, business development, scaling, regulatory filing, and distribution of biotechnology products. By fostering a community of stakeholders with aligned incentives and diverse backgrounds, BioDAOs facilitate the translation of technologies. In this regard, BioDAOs can be viewed as collaborative research translation engines and a novel form of biotech organization that develops IP through an online-native approach.

How do BioDAOs differ from investment DAOs?

Investment DAOs, such as MetaCartel, FlamingoDAO, The LAO and BeakerDAO, primarily focus on pooling capital to generate profits that are distributed to their stakeholders. These organizations represent a collective of investors aiming to achieve the highest possible risk-adjusted financial returns. For instance, a member of The LAO may receive a distribution of profits resulting from the capital deployed by The LAO into a project.

On the other hand, BioDAOs concentrate on developing novel IP and funding research and development of its members. The capital they deploy aims to generate value for their members and returns that can be reinvested in further R&D, rather than yielding profits for stakeholders or distributing them. Similar to how a university member benefits from enhanced research facilities, program funding, and administrative support provided by the university endowment without receiving direct proceeds, a BioDAO member benefits from the organization's successful R&D efforts.

BioDAOs are designed to facilitate and support vertically integrated R&D by granting members access to necessary resources and expertise for the successful development and commercialization of new biotechnology products and services. The community isn't primarily composed of investors; instead, it consists of researchers, entrepreneurs, companies, patients, and other stakeholder groups, most of whom contribute their time and effort rather than capital. The activities of a BioDAO encompass funding R&D investments and other functions such as community education, company formation, project incubation, access to expertise and knowledge, networking opportunities, member data aggregation, and assistance with regulatory compliance and various challenges. By offering these resources and support, BioDAOs aid their members in overcoming the numerous obstacles involved in transitioning technology from the research and development stage to a commercially viable product or service.

The mission of BioDAOs is to incubate and translate research

The mission and vision of BioDAOs are patient- and-impact-centric compared to VC funding. While VC funding emphasizes maximizing return on investment for partners or shareholders, BioDAOs concentrate on supporting and facilitating the development of effective biotechnology products and services for humanity. Structured around a sustainability loop, BioDAOs create an endowment to fund research indefinitely. Below is an example of how VitaDAO has structured its sustainability loop.

BioDAOs generally offer resources and support to their members, helping them develop and commercialize new biotechnology products and services. This assistance can include funding for research and development, access to expertise and knowledge, and networking opportunities within the BioDAO community. In contrast to VC firms, which exclusively focus on investing in companies to generate financial returns for their investors, BioDAOs are solely dedicated to funding R&D that benefits their communities within their respective subject areas.

As a result, the mission and vision of BioDAOs align more closely with the needs and objectives of researchers and patients.

Examples of BioDAOs and Their Activities 

VitaDAO, among the first BioDAOs, exemplifies how a BioDAO's function fundamentally differs from an investment DAO. VitaDAO comprises working groups of experts in various fields (refer to the figure above). Anyone can join VitaDAO by contributing either funding or time (work). In return, they receive governance tokens in the organization, granting them voting rights on proposals, such as which research projects to fund or how to support a project. The fact that many VitaDAO members join by contributing time and receive tokens, rather than providing funding, significantly differentiates it from an investment DAO. VitaDAO features many more operational roles than funding roles. Many of the largest token holders are those who actively participate in research project sourcing, evaluation, peer review, and operational activities for the DAO. Another major differentiator from an investment DAO lies in the allocation of proceeds from funding research that generates and monetizes IP. In VitaDAO, these proceeds return to the VitaDAO treasury to finance further projects. In an investment DAO, a portion of the proceeds directly goes to its members, but in VitaDAO, no portion is directly distributed to VITA holders. Instead, similar to a university researcher who may benefit from better facilities and increased research funding due to successful investments made by the university endowment, a VitaDAO member may gain advantages from the organization's funding activities.

VitaDAO community members with relevant experience collaborate with researchers on their projects, reviewing data and offering feedback on experimental direction. For instance, VitaDAO's deal flow and legal working groups negotiate deal terms with universities on behalf of the researcher and the DAO. The DAO efficiently leverages its extensive network of highly effective individuals using token incentivization. As research progresses, DAO community members assist with the creation of spin-outs to advance research to the next stage.

This interdisciplinary, cross working group approach to incubating and advancing research sets BioDAOs apart. In some cases, the DAO is so proficient in this task that negotiating research agreements and initiating projects takes weeks, compared to the industry standard of months. Some BioDAO activities, such as decentralized tech transfer (DTT), capitalize on the community and academic consultants as a collective intelligence to design experiments, create research projects, and generate IP within the DAO itself.

Decentralize or not? That is the question.

Biopharma R&D is gravitating toward increased decentralization, outsourcing much high-risk work to specialist contract organizations while keeping IP and data storage centralized internally. BioDAOs, however, offer an alternative by federating IP and data on Ethereum instead of keeping them siloed. This creates a more efficient superstructure and a new paradigm for biopharma R&D, boasting benefits like standardized data generation and decentralized analysis and interpretation.

Data structure and quality can vary significantly when performed by disparate entities, giving federated data acquisition an advantage over siloed, unconnected systems. Federated data is more likely to generate valuable insights through superior statistical power because it is compared against similar data in an open, connected system. For instance, RNA sequencing is highly sensitive to batch effects, and using a single high-quality RNAseq provider to federate data is more likely to result in the highest statistical power than multiple providers who don't share data and correct each dataset for data science purposes.

Data federation has compelling benefits, especially in areas like clinical trial recruitment. If clinical trial repositories or patient data are not connected via data federation, both the biopharma company and the patient or physician may miss eligible patients for clinical trials. Just as efficient financial markets require maximum liquidity on both supply and demand sides, data also needs to be highly liquid to create the most value for patients and biopharma companies.

However, centralization has its advantages in specific scenarios. For example, therapeutics manufacturing can benefit from centralization through economies of scale, resulting in the best drug prices for patients. Moreover, centralized data capture and/or storage can lead to dataset standardization. When federated, this standardized data—originally captured and stored centrally—can be even more advantageous to biopharma R&D, bringing top scientific and medical minds to the data for high-value decision-making. Existing biopharma companies often capture these centralization benefits, but there are numerous advantages of decentralization that are not fully exploited.

Although biopharma is moving toward more significant decentralization, it's only tapping into a fraction of the potential benefits. Most pharmaceutical companies have venture investment arms, but the quality and quantity of deal flow are constrained by the limited size of corporate venture teams. By expanding the team size and opening it up to a community, it's likely to increase connections, deal flow quality and quantity, and the expertise leveraged for decision-making. Decentralized entities also have competitive advantages, such as greater access to capital and patients. Decentralization offers a genuine means to regain public trust lost in recent years. This can be achieved by providing incentives and governance rights to patients participating in clinical research, shifting biopharma's focus from profits to patient value. Compensating patients with ownership and governance rights in the medicines they often risk their lives for can significantly increase their willingness to participate in research and expedite the clinical research process. For example, clinical trial recruitment often limits the progression of clinical-stage therapeutics, and the lack of a sense of ownership and governance among participating patients may be partially responsible. This shift from profit to patient value could boost biopharma's public trust and efficiency. In this respect, BioDAOs offer a solution that prioritizes patients over shareholders as the primary stakeholders.

Conclusion and future outlook for BioDAOs

BioDAOs represent a distinctive type of DAO that focuses on creating a comprehensive research translation ecosystem and novel IP creation engines. This approach enables BioDAOs to connect scientific innovation with real-world application, making them valuable players in the fast-paced biotechnology sector.

In the future, one might imagine that BioDAOs natively integrate AI and LLM capabilities, built and steered by their members to outright produce novel IP and therapeutics themselves and coordinate their development, thus decoupling from the current university and industry funding landscape. We believe that the pace and speed at which this may happen could surprise industry and provide an extremely valuable addition to the research landscape, given the agility, speed and open source nature that is required to make AI drug development capabilities and model development successful.

Unlike investment DAOs, BioDAOs generate returns to finance R&D rather than distribute profits to stakeholders. Nevertheless, similar to how university researchers and students benefit from improved research facilities and program funding provided by university endowments, BioDAO members may also reap the rewards of the BioDAOs' successes.

The existence of BioDAOs is grounded in the idea that patients and researchers are disenfranchised from the core stages of therapeutic development. Yet, they they have the strongest incentive and motivation for finding cures. Community-governed research translation organizations offer a solution. The motivations for prestige among academics and profits among venture capitalists are potent, but the desire for patients to alleviate their suffering is even more powerful. This underutilized driving force from patients could accelerate drug discovery, and BioDAOs aim to harness that potential.

In the future, BioDAOs are poised to play a vital role in advancing biotechnology, biotech-centric AI and bringing novel innovations to market. As DAO technology continues to evolve, BioDAOs are expected to gain wider adoption. The enormous potential of BioDAOs to drive progress and foster collaboration in biotechnology is disruptive and worth monitoring in the years to come.
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To learn more about BioDAOs, check out bio.xyz and the BioDAO Bible.