How to make $100 million in revenue before selling anything

Golden Ticket to Willy Wonka's chocolate factory
In this case the tickets will save children's lives, not lead to their unusual deaths

Last week, a biotech company announced they were getting paid $103 million for inventing a vaccine.

Chikungunya is spread by mosquitoes. Some people say it makes your joints feel like they’re on fire, but other people report it’s only like being stabbed repeatedly with needles. For now the virus is rare in rich countries, so as a vaccine creator it is hard to make much money per dose you sell. (As opposed to, say, an RSV vaccine, available at the friendly price of $395.) So how many doses of Chikungunya vaccine did that company have to sell to make $103 million? Zero.

If you invent a new drug from the list below, take it through trials, and get it approved by the FDA, you will win a voucher you can sell for roughly one hundred million dollars:

  • A treatment or vaccine for Zika before the next outbreak
  • A treatment for dengue, finally
  • A malaria monoclonal antibody you can give to people to prevent malaria cases. Or another vaccine, if it's better than the current two
  • A TB vaccine. Fair warning, the efficacy trial will be expensive for this one
  • A treatment for guinea worms that grow to two or three feet long in your body, and take weeks to manually extract from your leg
  • A treatment for other worms that infect 1B+ people (I will spare you further descriptions)
  • Drugs and vaccines against 20 other diseases

It is hard to get a new drug approved. Good luck!

You can win roughly $100M because these product classes are eligible for the Tropical Disease Priority Review Voucher (PRV) Program. The $100M comes from pharma companies, not taxpayers. If your drug is approved, you get a voucher you can either use yourself to speed up the review of another drug by 4 months or sell to a pharma company to give them a 4 month head start.

That pharma buyer will have potential blockbusters in the wings that make it worth paying a pretty penny to hit the market months earlier. It's "roughly" $100M because that's what the latest vouchers – like the Chikungunya vaccine voucher – are trading for (column H); they could sell for less in the future, and one sold for $290M back in 2016. The price depends largely on how many other winners there are in a given few-year period – and how many of those winning vouchers are for sale. Some pharma companies have started holding onto theirs, for use on their own future blockbusters.

Pharma knows the PRV program exists, but smaller companies and academics with drug patents often do not. If that describes you – or if you work in an R&D department and want to make novel products that save thousands of lives – use this information to your advantage.

If you are looking to start a biotech company and haven’t yet, hunt around for (or create) underdeveloped IP that might qualify and inform your investors of this future potential payout. That $103M-winning biotech licensed the Chikungunya vaccine in from a Swedish university in 2015, did some more testing in animals, then took it into phase 1 clinical trials in 2018 (page 9).

If you are a biotech investor or impact investor, consult the Global Health Investment Fund (GHIF)'s returns when they invested in part with this strategy. Well, the numbers aren’t public, so consulting them would be hard, but I'm happy to spread the rumours – they made a bunch of money. (Past returns aren’t the same as future returns; don’t get mad at me if you lose money; etc.)

If you work at a non-profit that develops drugs all the way through to licensure, or are thinking about starting one… you are a brave soul, and you should do it, and it will be hard. It is currently rare but definitively possible to go all the way yourself in a non-profit structure. I know it must be, because MDGH is doing it down in Australia, and won a PRV for the drug moxidectin!

If you work at a non-profit or research institute that partners with drug companies on particular clinical trials, you probably have a PRV strategy already. Nonetheless: plan ahead for what success would mean financially, and negotiate with your commercial partners for quicker, broader access to the product you're helping research, in the countries where it's most needed.

That last part goes for everyone: the point of making these drugs is so that people who need them can get them. Start talking to regulators in the highest burden countries early in development, not just the FDA, and make a plan for registration, manufacturing, and distribution partnerships as needed. If you're a small team and don't have the money or experience to market a product in tens of countries or to negotiate licenses with suppliers one by one, at least strike a deal with the Medicines Patent Pool so that generic manufacturers can do the work for you in the poorest 100 countries.

And if you're a reader, here's more on the impact of PRVs to date.

Thanks to Charlie Petty for comments