Movie stars and musicians have used crowd funding to finance projects. So have any number of start-up businesses and non-profit organizations. But can crowd funding become a successful tool for underwriting very early-stage research for new drugs or diagnostic tests?CrowdFunding advertizing
A new study suggests that researchers should explore the possibilities. After analyzing 97 crowd funding campaigns, the study concluded this is a “viable approach” for supporting research that tests proof-of-concept, or nascent theories. By doing so, researchers may increase the likelihood of success in securing traditional grants or private investment needed to underwrite additional clinical work.
“We’re not saying it’s a viable alternative for raising money for everything one would do,” says Larry Lynd, a co-author and professor at the University of British Columbia, who heads its Collaboration for Outcomes Research and Evaluation. “The question is which are the specific areas where it might work and what are the characteristics that would increase the probability of success” for early-stage research.
To sort it out, the study authors sought to gauge the success of crowd funding campaigns that were begun last fall to raise money for work in cancer and rare diseases. These two categories were chosen because of the intense focus on such illnesses and the challenges in obtaining financing thanks to fewer government grants and reduced early-stage investment by venture capitalists.CrowdFunding marketing
So what did they find? Average donations ranged from $59 to $199 on seven of eight crowd funding websites; donations on the other site averaged $1,369. The average number of donors ranged from about eight to 703, while fundraising goals ranged from roughly $6,900 to nearly $343,000. And the mean amount of money raised in each campaign was more than $45,600. The results were published in Drug Discovery Today.
Of course, there were some differences that masked what the authors called significant variances across the different websites. For example, one website called My Projects keeps campaigns open for donations until final goals are met or funding is completed, instead of closing donations after a fixed period of time. And bundled contributions can also be collected by individual supporters.Kickstarter Marketing
Besides open-ended fundraising timelines and bundled contributions, the study authors say that crowd funding success can be achieved by simultaneously using traditional fundraising techniques, such as sponsored participation in sporting events to support medical research. And other forms of marketing, notably social media, can also raise awareness for a campaign.
There are limits, just the same. The authors write that the very modest amounts raised by some campaigns suggest that crowd funding will not become a substitute for government funding. And raising money for rare disease research may prove difficult, because many donors are motivated to support research in which they feel they have a personal stake in seeing new treatments.Indiegogo Marketing
“If this [is what] drives donor behavior, this would [place] rare diseases at a disadvantage, because fewer people are likely to know someone impacted by a specific rare disease than, say, someone who has or had had breast cancer,” the authors write.
There were also limits to the study. For instance, the authors chose to analyze 97 crowd funding campaigns after determining these had raised at least 1% of their targeted goals. Lynd conceded this is a “very low threshold, but at least they tried to do something to generate revenue.” Of course, this also makes it difficult to fully gauge the extent to which these campaigns are employing useful tactics.crowdfunding websites
As a result, he says that further research is needed to assess the promise that crowd funding may hold for such research. “The million dollar question,” he says, “is ‘What are the characteristics that distinguish one project from achieving success and another that doesn’t?’ We don’t know that yet, but if crowd funding can help to de-risk early stage research and then attract someone with deeper pockets, it might help get more drugs to market.”kickstarter project
Posted from: http://blogs.wsj.com/pharmalot/2014/07/14/can-crowdfunding-jumpstart-early-stage-drug-research/