Eqypt Lecture 1




  1. Defined product
  2. Sufficient demand and market
  3. Protection against competition or big company for partner
  4. Technology lead, critical mass of people
  5. Legal advice
  6. Courage against predators (Mafia)


Next step: assurance of profitable economics.

Should perform crude estimates at very start of project and update with new data.


Prospectus: Devise an attractive description of product and its economics.


Confidential disclosure:

††††††††††† Big companies reluctant to sign. Donít trust their word.

††††††††††† Keep detailed records of meeting in case you must prosecute.

††††††††††† Investigate to ensure that you deal with ethical parties.

††††††††††† First stage not very specific; meet again if interest kindled.


Sources of capital:

††††††††††† Always take advantage of government programs.

††††††††††† Greatest risk but full reward if outright borrowing of money.

††††††††††† Venture capital. Often ruthless. Minimize risk to themselves. Take it or leave it attitude, so deal with one than one group.

††††††††††† Hard to convince others unless you are truly enthusiastic and committed.

††††††††††† Easy to convince yourself because of your enthusiasm. Donít overlook drawbacks.


Where to find venture capital? Trade magazines, word of mouth, consultants


Prospects for profitability:

††††††††††† Yields always less than best obtained in lab.


Expected time for payback:

††††††††††† Industry expects pay back on equipment purchases in 3 to 6 months because process may be changed, terminated, etc.


Marketing and distribution available

††††††††††† Example of Xylos: 3 to 4 years to get marketing partner. Too small to bring their single product to market.


Safety: Could raise costs several fold. Also extra insurance cost or no insurance.


Patents and copyrights: do patent and literature search very early in project. Donít give up if patent situation seems bad because your lawyers may bail you out., e.g., adding cobalt ion to Vitamin B12


Process development before seeking approval from regulatory agency.



Various categories:

††††††††††† Totally new products

††††††††††† Extensions of existing products

††††††††††† Process development

New products may be part of screening program, combinatorial chemistry, genetic engineering


Extensions: chemist, biochemical cleavage and substitution of different group


Process development: metabolic engineering, juggling of conditions, substitution of raw materials, new reagent, new grade of reagent, e.g., lechithin


Route depends on category, totally new product must have gone through animal and clinical testing

Describe methods and costs of testing

Conduct scale-up while awaiting approval, only minor process changes


Pretty much the same for extensions but may have excellent blueprint from existing product, thus shorter time scale


Genetic engineering requires a prescribed level of safety to prevent escape of culture. Not easy to provide total security for large plant, e.g., escape of genes for engineered corn. Mexican maize contaminated.


My experience with xanthan gum. Sterilized contents because organism is a plant pathogen.

Aerated bioprocess may carry away untold amount of organisms or even worse spores. Sterilize spent air by filtration or heating (combustion)



Process development: consider costs if retesting of product will be required. Otherwise moving from lab to production may be fast, e.g., slight change in pH or concentration of precipitant


Economic estimates: this course may get you started

Want much more than 10% annual return on investment because you can get 3 to 6% by putting your money in the bank with essentially no risk.

Rules of thumb:

††††††††††† Guess at total market

††††††††††† Assume your percentage of this market

††††††††††† Based on lab results, estimate size of plant to meet initial need and future need

††††††††††† Ask engineers to make a rough guess at capital cost of this plant

††††††††††† Curtail project if not even close to satisfactory return on investment.

††††††††††† Now is time to estimate production costs. Take best yields in lab and multiply by about 0.7.

††††††††††† If crude cost estimate does not show excellent value added (value of product Ė cost of materials), curtail project

††††††††††† Develop processing costs including interest on capital, labor, equipment


Critical factor: technology transfer. Want perfect relations between lab and engineers

Keep lab people involved. My all nights for process improvements. Great satisfaction in seeing your work in glassware translated to steel tanks.

Comments on pilot plants: trend to avoid them in chemical industry. May be sufficient to supply a new therapeutic agent well through its trials and initial sales. Excellent training of lab people because not greatly different from lab scale.

Essential for fermentations because lab info on aeration and agitation not very useful. May be superior for control and for programmed changes in variables.


New plant: totally new, enlarge existing plant, modify plant, farm out to company that has existing plant.

If using existing plant, may have to reshape process to avoid purchasing new stuff. Consider this before massive clinical testing.


If there is a marketing partner, you may have restraints on product forms.


  1. start cost estimates early in project.
  2. improve estimates and refine goals as data come in
  3. aim for final process because canít change much without retesting
  4. consider scale up early and anticipate problems
  5. good legal advice
  6. honest and reliable financiers