Scientific research and discovery in medical innovation is a risk-filled and prolonged process where both scientific and business success is difficult to predict. This uncertain route to discovery contributes to the complexity of the investment culture, especially how leverage and incentive mechanisms play out in the sector. This unique quality of R&D on medical innovation is also a primary factor contributing to the sector’s productivity issues, which are becoming an ever-rising concern in the industry and its markets, affecting commercialization pathways and future access to innovations. A balance needs to be achieved between investment and predicted rate of return to sustain the industry’s robust future and assure patients access to continuously improving treatments.
Productivity, when measured by biopharma’s industry-wide IRR (Internal Rate of Return), has been experiencing a decline since the mid-20th century. Returns reached their most disappointing numbers to date over the last nine years, with large-cap companies’ consolidated results falling to their lowest level. Productivity dropped from 10.1% in 2010 to 5.5% in 2014 to 1.9% in 2018. The rate is moving towards a projected zero (0%) by 2020. It is predicted that IRR will continue to slide into negative rates; hence investors will not recoup their initial capital outflow, without an effective intervention on the current commercialization pathway.
Many approaches have been suggested, spanning investment strategy shifts and public funding. However, it has been proposed that a fundamental shift in the business model by involving patients in the commercialization would have the biggest impact in reversing the trend.
With the emergence over the past decade of a plethora of small and medium-sized medical innovators supported by global innovation clusters innovating transformational drugs and devices. It has become necessary for their successful commercialization to develop a new funding pathway that supports the rapid and compliant approval of the most in-demand innovations. We are advocating for a change in the biopharma space business model. Incentives in the industry need to be realigned to drive significant momentum behind innovation.
With emerging financial technologies such as blockchain, it is possible to re-evaluate the business model and introduce new processes and features that decouple and streamline the financing and decision-making processes to encourage open innovation. Through asset ownership and novel financial instruments, it is possible to develop patient-centric platforms that measure true demand and introduce new means of price discovery. Making it now possible for “payers” to not only advocate for the treatments they need but also tangibly support the early innovators through both market discovery and financing to release much-needed treatments in the market.
For the first time, AEVOLVE Biospheres, a platform with an estimated USD 1 billion worth of initial secured offerings will be launched, with a patient-centric commerce model and interface. Instead of being considered simply as “payers” in the industry, patients, through crypto asset ownership, will act as stakeholders who can influence the direction of scientific research according to their own and community needs.
Small- to medium-sized companies of the type that have been driving innovative research in recent decades will have an opportunity to participate in a new dynamic marketplace with innovator-friendly financing opportunities abound. Traditional investors looking for familiar means of access to the blockchain investment space may now avail of a first-of-its-kind wrapped certificate available via Swiss ISIN, which enables participation in this market of direct interaction between patient-consumers and innovative companies.
Capital raised through these alternative channels is designed to speed up the medical innovations’ ability to commercialize and scale. It directs new funding from both traditional and non-traditional sources into a blockchain-derived system that promotes rapid growth and progression, offsetting the cost-heavy and random process that is slowing the industry and preventing it from meeting a trillion-dollar market of health innovation needs.
With the emergence of innovative biopharma companies with innovative technologies and methods of financing must evolve to enable these innovative treatments to become commercially viable. AEVOLVE's vision is to transform the “patient” into a “decision-maker” in steering the course of medical innovation to best serve humanity.
The AEVOLVE Biospheres Ecosystem explained
Below is a brief explanation about how to AEVOLVE biosphere brings together “payers”, financing, and medical service providers into one ecosystem to support breakthrough innovations.
Biospheres are created through a stringent selection process, wherein partnered NGO and advocacy groups identify medical service providers (MSPs) identify and present these opportunities to AVEX token holders for community voting.
Once selected, the treatment is carefully examined and scrutinized by a world-class team of scientific curators paid in AVEX tokens from the treasury to consistently review new projects on their merit and support commercialization planning. Upon approval of the project by the scientific curators the Biosphere will be generated along with its unique ERC-20 sphere voucher NFT. It now becomes open for staking AVEX tokens to support a Biosphere project.
An example to better the real utility of the project. Let us take the devastating progressive neurodegenerative disease, ALS. The ALS Association identifies a range of compelling projects lacking the necessary funding to complete required regulatory clearance. They can bring these projects to the AEVOLVE ecosystem for community voting. The projects with enough support are moved to the scientific curators for diligence.
The team is comprised of a multi-disciplinary team of experts that will review the business, regulatory, technical, and clinical challenges to weigh the viability of each project. So let’s say we start with 20 initial projects for community voting of which 8 enter diligence upon which only 3 are viable. Each project will have its associated biosphere and unique ERC-20 token.
AVEX tokens are purchased from a cryptocurrency exchange and staked in a biosphere; the owner of the staked tokens earns a Sphere Voucher displayed as an NFT in the wallet which staked the AVEX tokens initially.
Continuing the ALS example, if you discover the biosphere related to an innovative ALS treatment you’d like to support in a low-risk manner through staking and potential share in the upside of selling or donating a Sphere voucher for treatment. It is as easy as buying AVEX tokens from an exchange and then just staking it to the ALS treatment biosphere.
AEVOLVE has worked tirelessly to converge cryptocurrency and traditional financial markets. This has been achieved through the introduction of an innovative Swiss ISIN financial instrument collateralized against bank vaulted AVEX tokens. This makes it possible now for non-crypto currency investors to participate in the AEVOLVE ecosystem as well as leverage more complex financial methods to de-risk and capitalize the ecosystem.
Once a biosphere reaches its staking threshold (aka. Fundraising goal) and MSP complies with the required diligence, the AVEX foundation will secure the most opportune financing option against the staked biosphere pool to leverage the locked liquidity without taking funds out of the AVEX liquidity. An initial tranche of funding will be made available to MSP and released as defined by the milestones created at the Biosphere's inception.
Once the ALS biosphere has reached it is funding threshold, for example, USD 2,500,000 then the AEVOLVE foundation will secure financing based on the staking pool leveraging the AVEX tokens integration with traditional financial markets to both provide either the MSP funding directly or managed through a trusted NGO to distribute the funding. Of the funding, only a portion will be released to the MSP initially to mitigate project failure risks and released as milestones are met. This will allow MSPs to secure friendly financing term to do crucial work during the most difficult phase of medical innovation commercialization to both secure additional sources of funding and showcase market demand.
Upon the commercial release of the MSPs product, the biosphere project will close. Upon closing holders will be returned their staked AVEX reward as well as get reward Sphere vouchers proportional to the staked AVEX. All information about each voucher is stored securely on the voucher itself since it is minted as an NFT. Once presented to the MSP, the treatment is given out to the one who submits the voucher for redemption. Ownership of vouchers is transferable or exchanged for sale in the AEVOLVE Ecosystem often at a premium.
Once the ALS treatment is released to the market, the biosphere project will be shut. This will trigger the un-staking of AVEX tokens, the release of Sphere Voucher, and the funding release to MSP. Sphere voucher NFT holders can redeem their treatment based on the terms found within the agreement stored in the NFT. The Medical Service Provider will be liable to fulfill the vouchers. For example, benefits of the Sphere vouchers can include securing an earlier spot in the treatment queue, discounted costs, or preferred services.
Sphere Voucher holders can donate ownership through an NFT transfer to the identified NGO or an individual, else they can sell it within the AEVOLVE marketplace to realize financial gains from supporting the commercialization of revolutionary medical innovations.