LYNK BIOTECH: OPEN INNOVATION PROJECT MANAGEMENT July 2020, Singapore. Dr Boon Tiong (David) Tan, Executive Director of Lynk Biotechnologies (Lynk), was deep in thought. Lynk's transdermal technology, to deliver active ingredients through the skin directly to the bloodstream or interstitial space, had proven successful. It was 20 years since its founding in 2000, and Lynk had worked with many partners including universities, hospitals, polytechnics and research organisations. As a biotechnology rm with a research focused approach, the company had pivoted from a strategic focus on researching cancer drugs to a narrower focus on transdermal drug delivery. In the early years, it had started with an ambitious project of transforming earlystage cuttingedge university technology into marketable cancer drugs. However, its seed funding ran out quickly. But, during this research, the company came up with a highly effective and stable transdermal delivery technology that could penetrate water soluble molecules through the skin to the human body. This invention subsequently provided the basis for many of the firm's commercial products, comprising ointments and creams, including the TGC cream, its bestseller product. The products were launched in the market after extensive clinical trials. Ilowcvcr, Singapore was a small market, and intcmationa] expansion was critical for the company's growth. Lynk tried to expand its bestseller product outside Singapore but faced daunting challenges. The active ingredient in TGC was glucosamine, which was a regulated compound in some markets outside of Singapore. Moreover, the marketing of clinical products was governed by local regulations, and hence launching the product in another country often necessitated additional clinical trials in the local market to clear countryspecific requirements. As these trials involved significant investments to execute, they were a major hurdle in the company's international expzmsion path. Despite tight budget constraints, Lynk continued to keep its commitment to scientific research, and only tried to expand in countries where it could do the full cycle of clinical trials. This approach was traditionally different from that of other SMEs in the sector, who preferred to focus on bringing a product to market quickly, rather than focusing on clinical trials. Towards the end of 2019, Lynk had received interest from a research organisation called A*Star to use its transdermal delivery technology for one of the products it had designed. Talks between the two firms to work collaboratively on the new product had commenced. However, David wondered was partnering with researchfeducational organisations the right strategy for the company moving forward? Given the constraints, how could the company grow internationally? Lynk Biotech Founded in 2000 by Dr Lee Chee Wee, who was a fulltime faculty at the National University of Singapore [NUS], Lynk was one of the first biotech firms to be setup in Singapore. Born out of a passion of the founder to develop scientically researched products, the firm started as a technology spinoff from NUS with 5991 million investments from angel investors. The idea was to discover cancer drugs using a protein knockout technology discovered by Wee and his biosciences team at NUS. However, the firm soon realised that researching, developing and commercialising a cancer cure was an arduous and lengthy process. Cancer related drug discovery could take between 10 to 20 years to progress from the lab to the market, without any guarantee of success. As a startup, Lynk did not have the bandwidth and the means to wait that long to generate revenue from its inventions. The company decided to change course in 2002, and stopped work on the cancer drug and pivoted its business model. It started working on products that could be brought more quickly from the lab to the market with its small research team. But even for simpler biotechnology products, going to market and creating a brand name did not prove to be easy, and required specic expertise in marketing and distribution. Lynk experimented with the launch of a hair serum in 2002 with some success, and a year later, sold the product rights to Hong Kongbased company Lo Hong Ka, as it realised that it would need additional capacity and expertise to market the product. Following its hair serum project, Lynk saw success in attracting some funding in 2004 and received an investment of $322.5 million from Whiterock Investment. In 2005, the company received another investment of $356 million from a group of private investors led by Lim Kim Hai, who joined the company as its chaim'ian the same year. Open Innovation: Transdermal Technology With the financial impetus, Lynk developed a proprietary transdermal delivery technology that enabled the delivery of watersoluble molecules into the body through the skin rather than orally. This meant that the active ingredients of a drug formulation could be delivered as a cream through direct application on the affected body area. This form of delivery was applicable for topical remedies as well as cosmetic or skincare products. The technology enabled active ingredients to be well absorbed into the skin and to be i'parkm\" within the skin layers to exert their effects in a localised and longlasting manner. This was different from the delivery method of oral drugs and potentially much more beneficial for patients, especially for those suffering from symptomatic conditions like osteoarthritis. Watersoluble molecules and drugs were normally not able to cross the skin, which acted as a natural barrier to water. Therefore, drugs based on water-soluble active ingredients consumed outside of a clinical setting were traditionally developed in an oral form to allow absorption into the bloodstream through the digestive system. However, when consumed orally, these oral drugs could get metabolised by the digestive system, resulting in only a small proportion of the medication reaching the bloodstream. This resulted in low bioavailability of the drug within the body, impeding the drug from achieving its intended function. Furthermore, high dosages of certain drugs could cause distress to the gastrointestinal tract. Lynk's breakthrough transdermal delivery technology catered to this challenge by enabling watersoluble drugs to be carried through the skin directly into the bloodstream (refer to Exhibit 1 for Transdermal technology and its pros and cons). Transdermal delivery technology was superior and innovative in that it had a unique capability of delivering active molecules across the skin in a sustained manner for up to six hours. Lynk started identifying different active ingredients and product ideas that could be delivered through topical application with this new discovery to create commercial value. The first product the company launched using the technology was a topical cream called TGC l[transdermal glucosamine cream) in 2003, with a high concentration of watersoluble compound glucosamine [10% glucosamine sulphate}. Glucosamine was clinically proven to enable repair and regeneration of womout cartilage. TGC delivered glucosamine through the skin directly to affectedjoints to repair and regenerate wom out cartilage, thereby removing pain and discomfort experienced at the joi nts. This product was ideal for those suffering from osteoarthritis, as it helped reduce inammation of the joints with regular application, thereby reducing and controlling the pain symptoms from the condition effectively. Project Partnership for Open Innovation While the TGC products sold relatively well in the Singapore market, Lynk struggled to mass market the product internationally. Although the TGC cream could be sold over the counter without a clinical certification in Singapore, Lynk felt that a clinical trial could substantiate and strengthen the reputation of the product and help the company enter international markets. Adequate trials were typically essential to obtain solid results from a clinical trial. Lynk realised that it needed additional resources to perform such clinical trials and publish the results in a renowned journal for it to be accepted by practitioners. However, the firm did not have ready access to patients to perform clinical tests for the TGC cream. Being an SME, Lynk had limited capital as well. The firm approached some hospitals to enlist their help to perform the clinical trials but realised that the fees charged by the hospitals were beyond its means. Moreover, hospitals would only undertake the clinical trial if it could be completely done in their institution, from patient recruitment to sampling, testing and performing the analysis of the results. Hospitals would then charge Lynk accordingly for all the procedures, tests and analyses performed. Due to the financial constraints, Lynk decided to use a cheaper option to conduct the clinical trials. It approached Temasek Polytechnic (TP) , a Singapore based postsecondary education institution, to conduct the analysis of patient samples, rather than the entire clinical trial. Lynk decided to perform the data interpretation in-house based on the sample data assayed by the analytical lab at TP. Lynk also chose this option as it felt comfortable working with TP, as it had collaborated with the institution for a smaller project earlier. The scientific goal of the trials was to confirm the presence of glucosamine in the synovial fluid (inside the knee joint), delivered transdermally using the company's technology. Lynk saved further costs by collaborating with Dr Ting Choon Meng from T&T Family Health Clinic and Surgery, who agreed to do the synovial fluid extraction for analysis free of charge. Dr Ting was a pioneer in arthrocentesis the extraction of synovial fluid from the knee and was interested in the TGC cream's potential to reduce or delay the need for knee replacement surgery by aiding the repair of wornout cartilage in joints. Both parties saw an opportunity in using synovial fluid (normally considered a waste product) to perform a rigorous clinical trial of the cream. The clinical trials began in 2011 with three stakeholders Lynk, TP and Dr Ting's health clinic. Lynk owned the technology and developed the assay method; the School of Applied Science at TP performed the chemical analysis of the synovial fluids; Dr Ting performed the actual clinical trials, using synovial uid extracted from human patients with osteoarthritic symptoms. Explaining the rationality behind the partnerships, David elaborated, Along the way, we lrept in touch with institutions because we needed their help. as they had better expertise in biosciences and were more efficient in their research process, But the key technology was within our own R&D. We published a paper that summarised the results of our study, and this was also made in collaboration with TP. {...} We had to engage a doctor to extract synovial uid from swollen hneejoints. We engaged TP to measure the level ofglut'osamine in the fluid. The biggest shock me had was when we realised there were no governmentled funding for clinical trials. The government will only fund clinical trial done by governmentled research institutions lilre A *Star. This was the biggest impediment we faced. Eventually, we got there, but it took us a long time (instead oft? months with funding}. Getting a third party to do the clinical trials was strategically important for the company as it helped build transparency in the efcacy of the product and proved the product's objectivity and credibility. Matthew Kong, the principal project manager from TP on the TGC cream project, recollected, in the project, TP was the testing arm. i would write down the results of the samples and give them to the company. ll they had any questions, then we would clarify The clinical trials returned strong results and motivated the research team to publish a peerreviewed research paper demonstrating the ability of the transdermal technology to deliver watersoluble molecules, such as glucosamine, through the skin barrier. The team believed that the research paper could help build awareness about the technology amongst other researchers and practitioners. All three parties involved in the clinical tests also became part of the research publication, and this served as an incentive for the parties to complete the trials quickly and efficiently. As all the three parties in the project were performing separate tasks, they were able to operate independently. Lynk would clarify with its project partners on the specic task results if it had any queries. Prior to the human clinical trial initiation with TP, Lynk had also performed in-house animal testing to measure the levels of glucosamine in the bloodstream after application of the cream. It was a natural progression, from invitro testing in the lab, moving on to animals and eventually to humans. Dr Ting shared, The unique thing about our partnership was that as a clinic, we ha ve the facilities here, so Lynlr did not have to collaborate with any other third-party facility providers. We had a ready testbed for the technology: going to the hospital for the tests would have been a long process. if you were to go to a hospital. and you want to test on ZGUpatients, it would take you a year to be enrolled and do the tests. We finished the tests in 3 to 4 months, For Dr Ting's clinic, convincing patients to participate in the clinical testing of the cream had proved to be difficult at first. When patients visited the clinic, they would spend some time waiting for their appointment. The trial would take another hour, and fewer patients were willing to commit such a long visitation time. The clinic would be crowded, and patients were in pain when they walked in, and that further added frustration in addition to the waiting time. Dr Ting had to ensure that they listed only patients without additional complications. By the third week of the testing, the process of identifying patients became much smoother. W'hile collaborating with Dr Ting and TP kept costs of the trials low, Lynk incurred additional expenses in the form of procedure fee for patients enrolled in the trial, and payment fee to TP for the analysis of the individual samples. Lynk also offered participating patients a free package of the TGC cream. To minimise communication issues during the trials, Lynk coordinated with only one main point of contact at TP, with whom the company shared all required information about the product. In a few instances, the company did face coordination issues with TP regarding the usage of equipment, but that was ironed quickly through effective communication. The research team was amazed by the strength of its findings from the trials. Patients in the intervention group who had applied the cream had significantly higher levels of glucosamine in their synovial fluid than patients in the control group who did not use the medication. This reinforced their determination to publish the results in a peerreviewed medical journal a difficult and lengthy process requiring much backandforth communication between the authors and the journal reviewers. To submit the paper for peerreview, Lynk needed to obtain approval from the Health Science Authority (HSA) and Institutional Review Board [IRE] for the clinical trials prior to the data collection. Such approval processes of research projects were in place to ensure the protection of the rights and welfare of individuals animal or human participating in the research. The team at TP had got the opportunity to participate in a project going through the IRB review process for the first time. Matthew recalled, What TP gained from this experience was we learnt to manage and sort out a lot of teething problems in the IRB process approval, which is now much smoother compared to 20l5. For us, the process helped us become more proficient and familiar with clinical approval procedures. As scientists, takingpartin these projects wiilaliowyou to gain competency in terms of the technical aspects, andT this comes handy from the staff development perspective. Following the approval from IRB for the project, Lynk and its open innovation partners now co authors performed the clinical trials and data analysis and wrote up their results for the research paper submission. Their hard work paid off and the paper was accepted and published in the Journal of Biosciences and Medicines. The results of the research proved without a doubt that Lynk's transdermal platform technology was able to deliver glucosamine straight into the synovial fluid of the patients in noticeable amounts. Dr Ting recalled, in terms of challenges, the research paper tool: a long time: we had a hard time publishing the paper because the numbers were too good to be true. There was a comrrr'erciaiI consideration, which i kno w had an impact on the approval, so it was not just the academic angle. But, nally, we got it published. After the publication, the team faced the challenge of commercialising the product based on these results. It also tried to come up with a few additional products based on its transdermal technology {refer to Exhibit 2: Other Lynk Products with Transdermal Technology). A key deterrent was that selling clinical products in different markets was subject to regulations, which were set at the country level. The company faced constraints mainly due to the requirement of passing local trial tests in every country it chose to expand which involved significant costs. Most countries in Europe require safety and efcacy trials for the commercialisation of glucosamine-based products as glucosamine was approved as a medical drug. In the US market, however, only safety trials were required before entry, as glucosamine was classified as a dietary supplement. Finally, in some countries, glucosamine was not a regulated compound, but the company did eventually have some successful expansions. For example, Lynk was able to make some progress in Indonesia where in 2006, the company collaborated with a local university and ran a trial to allow the cream to be used in the country l[where glucosamine was classified as a dietary supplement). What Next? Lynk had felt that clinical trials could lead to several benets. It could create a reputation for the company and its product with spillovers supporting other similar products based on the technology. The adequate testing of the platformltechnology could allow them to establish a longrun strategyr towards the launch of other products based on the same technology. Talking about the potential for the transdermal technology, Dr Ting shared, Here ls someone who can do a transdermal, penetrate the slrln without Ejection, deliver the drug through the bloodstream and bypass the liver and the stomach and malre lt avallable. Now that was a dream, and l halfhellevetl it at the time (m). Luckily our journey so far has turned out veryr well. However, the clinical trial approach was expensive and shifted the focus from sales to product development with long lead times. Moreover, the need for regulatory approval for clinically tested product, limited international expansion opportunities for the product (particularly in countries where glucosamine was not regulated}. At the end of 2019, local research organisation A*Star had approached Lynk to collaborate on formulating a new cosmetic product using its transdermal technology in a joint innovation project. A*Star was seeking Lynk's expertise to incorporate a recently developed active ingredient into its cream base. The research firm would then run its own clinical trial using the transdertnal technology in partnership with National Skin Centre. The initial talks between the two firms took some time to commence. David was brimming with excitement at the new prospect. The clinical trials had helped bolster the reputation of its transdermal products but had not yet translated to commercial success for the products. Analysts reports predicted that global drug delivery market would grow at a CAGR of 9.3% over the next few years (refer to Exhibit 3 for Predicted Growth of Topical Dru gs). David wondered was partnering with researchleducational organisations the right strategy for the company moving forward? How could Lynk advance in its growth journey and distribute their product internationally? What projects could it pursue with its partners