An Open Bazaar for Drug Development: Molecule Protocol
By: Paul Kohlhaas
Tags: Web3, Blockchain, Crypto, Pharmaceutical, Biotechnology

Imagine a world where patients directly fund researchers developing the next therapeutic breakthrough they need. One where drug development is collaborative, open, and decentralized — an open bazaar anyone with the right intentions can join. A system that could radically increase the diversity of treatments, and lower costs and time to market.

The majority of promising early-stage therapeutic research lacks funding and access. Funders struggle to discover and engage with suitable projects. In addition, IP is a highly illiquid, bureaucratic and opaque asset class that restricts virtual scientific collaboration through printed and filed legal constraints.

Drawing on original Linux metaphors and open source software. We live in a world where big pharma constructs expensive cathedrals over decades that serve their clerics’ interests more than they serve their followers. +10 years to market, +$2bn in avg. development costs, coupled with an appaling failure rate — biopharma is a system with zero consumer choice and 100% dependency. We need bazaars.

To address these challenges, we’ve set out to create an open marketplace that makes novel therapeutic projects discoverable, universally fundable and distributes ownership to patient collectives.

Diseases have global networks of stakeholders: Imagine a new insulin treatment funded, governed, and owned by diabetics. Our marketplace connects researchers with patients to enable this.

Photo by Francesco Ungaro from Pexels

Learning to Swim: an OpenSea for Biotech IP

Over time, we aim to build a full-fledged funding ecosystem for early-stage research discoveries. Molecule is an OpenSea of biotech IP. Powering a new creator economy for researchers that allows for the rapid funding, discovery, and development of therapeutics through globally connected patient collectives. Virtual and sustainable. We believe this system will be equally beneficial to the current pharma industry as it will be for patients: by decentralising access and helping discover promising research more quickly.

In a first step, Molecule provides an interoperable Web3 marketplace leveraging a scalable legal IP to NFT framework. Our novel approach allows for IP to be virtualized and modularised in an open bazaar. To achieve this, we utilize a combination of unique digital asset identifiers (NFTs), novel automatic exchange infrastructure (AMMs) and governance structures (DAOs) to reinvent IP ownership, financing of these assets, and entity creation. Our tech stack allows therapeutics to be funded and governed in entirely new ways that leverage the decentralised power of open communities and decentralised finance (DeFi), as opposed to single centralized entities and corporations.

We began exploring the combination of IP and NFTs with DeFi in 2018. Fortune favours the brave.

Molecule has two layers — Molecule Discovery and Molecule Finance. Combined, they enable the creation of a vibrant ecosystem for decentralized modular drug development.

Molecule Discovery — Making Research & IP Globally Discoverable

A first objective on our journey is to accelerate the discovery of promising early-stage therapeutics and bridge the “Valley of Death” in academia. We achieve this by creating a platform for individuals and organizations to interact with intellectual property and data — the two core innovation drivers and assets in biopharma. On Molecule Discovery, researchers can make their biopharma assets (data as well as pre-filed patents) visible to a global audience, receive feedback and engage with potential funders. The platform allows them to list the details of their projects, specify the commercial opportunity and upload data assets on an interface that feels familiar. Inclined investors can discover and follow projects in areas of their interest, engage with the research team and ask for further qualification. When interest from potential investors reaches a certain maturity, the IP moves into a new licensing platform built on Web3.0.

Filtering for global longevity projects: A snapshot of 3 out of +250 projects on Molecule Discovery.

Virtualising Research On-Chain: IPNFTs

The evolution of the biopharma IP transactional landscape is happening in part via a class of digital assets called Non-Fungible-Tokens (NFTs). A new NFT standard, the IPNFT developed by Molecule, will unlock new value in biopharma IP through fractionalization, frictionless tech transfer transactions, and collateralization of IP in decentralized financial systems in a permissionless way. The art and music industry embraced NFTs by storm, its time we empower scientists. Molecule’s first use case for IPNFTs is in early-stage biopharma where university tech transfer offices (TTOs) sit on IP goldmines languishing in obscurity for lack of easy access to liquid global markets.

Our platform enables these early-stage biopharma assets to be attached to NFTs via automated licensing frameworks and decentralised data storage systems like IPFS or Arweave. Once on-chain, NFTs can then be plugged into the broader Web3 and DeFi ecosystem to access price discovery and liquidity, financing and virtual drug development frameworks like DAOs.

In 2015, pioneering research in blockchain applications highlighted IP management and fractionalization as one of its key use-cases. Research collectives like COALA IP and Ascribe come to mind. Thanks to open networks like Ethereum and Ocean Protocol, technology, and adoption has matured to the extent that these early concepts are finally within reach of practical implementation.

The type of IPNFT developed by Molecule consists of two contracts: a legal contract and a smart contract, which cross-reference each other. The legal contract is an IP license with language referencing blockchain transactions, addresses, and signatures. The smart contract is an NFT with code referencing the IP licensing agreement, obfuscating certain data components and storing them on decentralised file storage networks. Combined, the legal contract and the smart contract create the IPNFT.

Molecule Finance — Full Decentralized Modular Drug Development

But research projects and IP require an active team, community and funders to become productive assets. Molecule.Finance enables modular drug development by creating virtual funding and collaboration environments. NFTs can be moved into automatic market makers to raise funding, or inserted into DAOs managed as a portfolio in a specific therapeutic vertical. These structures mirror virtual biopharma startups or holding companies that consist of various global stakeholders, funders and researchers — but fully distribute governance rights to their community.