Navigating the Perilous Journey from Lab to Market

June 10, 2026 | The translation of promising lab ideas into commercial impact is fraught with multiple valleys of death, beginning with the technical, funding, and people challenges of getting medical interventions out of academia and into clinical trials in the first place, according to Armon Sharei, Ph.D., founder and CEO of Portal Biotechnologies. More than a decade ago, he successfully spun an innovative cell therapy platform out of MIT, with “a million lessons learned” along the way. 

At least 90% of preclinical ideas never get to the clinical testing phase, and a similar percentage of those that do never reach the market, he says. “To have the best shot at success, pretty early on you need to become okay with the concept that you are probably going to give more than you get.” 

Startup founders also need to be fast. “The cost of time is probably the resource people underestimate the most,” says Sharei. “If you could do something tomorrow that would cost you $20,000 versus next month for $5,000, you should do it tomorrow if it’s important because the cost of that month is probably a million dollars of burn.” 

And the money isn’t easy to come by. Investors are “at least as harsh” to fund-seeking entrepreneurs as they’re depicted on the Shark Tank realty show—“they just don’t do it to their face,” says Sharei. But in sharp contrast to the Sharks, who routinely declare “I’m out” to televised pitches, with real-world backers “the default answer is no answer ... on average, they want to retain optionality and just hang around the hoop.” 

Beyond the original brilliant concept and never-ending quest for outside capital, it often takes a heavy dose of charm and resilience to run this race, he says. The perspectives of entrepreneurial professors and emerging and established startups, as well as pharma companies doing strategic partnerships and acquisitions, can be of immense value to those embarking on the journey. 

Each of those views will be represented during a plenary keynote panel discussion that Sharei is moderating this fall at the Discovery on Target conference in Boston. Panelists include Sangeeta Bhatia, M.D., Ph.D., MIT professor and director of the Marble Center for Cancer Nanomedicine; Kris Elverum, MBA, former president and CEO of AIRNA, a biotechnology startup pioneering a new class of genetic medicines; and Parastoo Khoshakhlagh, Ph.D., cofounder and CEO of GC Therapeutics, a biopharmaceutical startup developing off-the-shelf stem cell-based therapies. 

Money and Mojo 

The core impediment to success in the medical innovation startup space is the inability to predict which drug candidates or mechanisms of action are going to work in the clinic setting, Sharei says. People working in academic labs look for signs that their insight is technically promising, but all the uncertainty means only a few of the thousands of great ideas are ever going to have the money and resourcing to enable their further development.  

This technical risk is largely related to how individuals understand the space and how good they are at pitching what they have, he continues. “If it’s an amazing idea but they’re terrible at positioning it, it is very unlikely they’ll get anywhere.” 

A second factor is simply the availability of money and if the idea falls in a "hot zone" geographic area or market niche targeted by heavy investment, economic incentives or localized funding, says Sharei. One of the major hazards entrepreneurs face when they first spin out of academia is getting their first seed funding round of, say, $5 million. 

“A lot of investors will admit that there are exciting things left to wither on the vine because they’re not convinced the next tranche of financing [e.g., $50 million] will materialize,” he shares. “In addition to execution, it becomes a little bit of a sales job to convince people to take those chances, whether it’s financially or technically.” 

SQZ Story 

Long before Sharei launched Portal Biotechnologies in 2023, he was a Ph.D. student at MIT involved in the discovery of a new way to engineer cells that could potentially enable a lot of novel therapeutics. That became the basis of a spinout company known as SQZ Biotech which, over 10 years, raised $300 million in equity financing, another $100 million in partnership money from Roche, and in 2020 went public. 

SQZ had three ongoing clinical trials, some showing promise and others not, Sharei says. “Eventually we got Portal going as kind of a next-gen version of what we used to do ... just supply the technology and let others run with it.” 

“The second time around was half cheating,” he quips, since Portal’s founding team already had a solid understanding of the tech and the application space. Last year, the Defense Advanced Research Projects Agency gave the company $8 million to create a portable red blood cell therapy system. 

The first go-round with SQZ, which was more oriented towards therapeutics, was “a real nailbiter,” says Sharei. He and MIT professors Klavs Jensen and Robert Langer found their cell engineering technology super-interesting, but it was too early to interest investors in supporting a spinout, so they initially bootstrapped it with angel funding and grant money.  

Institutional investors eventually got on board, followed by an initial $45 million in upfront cash from Roche that over the years escalated to a commitment of just over $100 million. Once the big conservative pharma from Switzerland betted hard on the startup, it initiated a virtuous cycle bringing back initially reluctant investors and attracting yet more capital, top-tier talent, and customers, Sharei says.  

On the technical side, one of the most real nerve-wracking perils is knowing when a preclinical package is good enough, he notes. “Every time you think you’re making progress in ... better optimizing what your drug is going to be, you probably kick up five new questions.” The trick is self-managing oneself through the decision points, “so you don’t end up down a rabbit hole with endless new questions that could be answered.” 

For startups, “the financial pressure kind of becomes a forcing function that [compels] you to make some of those tough calls on when it’s good enough,” Sharei continues. Pharma research groups can work at a much more leisurely pace simply because they can afford to be less efficient. 

Pitch and Grit 

Startups can and do fall apart purely because the founders can’t agree on matters such as who owns what proportion of the company, how diluted the overall ownership percentage becomes with the next investment round, or a perceived imbalance relative to the contribution of a partnering company, says Sharei. “Sometimes people will get caught up in trying to optimize for their outcome in the long run as opposed to ... doing what it takes to make the next thing happen and hope it all works out in the long run.” Due primarily to their personality, “they can’t let go of some conceptual upside.” 

People like Sangeeta Bhatia and Robert Langer have the fortitude and smarts to pull off what others would find daunting, he notes. They’re gifted with the ability to pull top talent into their labs, which comes with the self-fulfilling prophecy of generating high-quality scientific output. 

They are also both very good at positioning and pitching the science and “contextualizing the research accomplishments to get the most people excited about it,” adds Sharei. Put two professors with the exact same insights in front of a would-be investor or partner, and the one who is better at communicating the clinical relevance is going to carry the day. 

It certainly doesn’t hurt to have a technology licensing office to aid the transition from lab to the commercial sector, Sharei says, particularly one as “practical and relaxed” as the one at MIT about the setup for spinouts. Of course, that’s also the kind of enlightened attitude that attracts people like Bhatia and Langer to places like MIT in the first place. 

“They weren’t necessarily trying to squeeze out every last bit of financial upside for MIT that they could,” says Sharei. “They were prioritizing making sure that the technology spins out, whereas ... some other universities want to maximize what they get out of it ... to the significant detriment of the company that was spinning out because they made its financial situation untenable.”