Advice from Oncology Investors: How to Differentiate Your Startup in the Cancer Space

18 Apr

By Lucy Parkinson, VP of Investor Research, LSN

At the inaugural RESI Europe event, a panel of four investors discussed their focus on Investing in Oncology Innovation.  It’s well know that oncology is a hot area of investment; however with such a wealth of innovation to choose from, investors and startups both face many challenges in finding success.  LSN would like to thank these investors for sharing their advice with RESI’s audience, and we’ve made a short video to provide some of that wisdom to the rest of the world.

The participants were:

  • Claus Andersson (Moderator) – Sunstone Life Science Ventures
  • Katherine Cohen – Panacea Ventures
  • Mark Krul – Aglaia Oncology Funds
  • Toshiyashu Shimomura – Taiho Ventures

The field of oncology research is advancing rapidly, partly due to new research tools such as tumor sequencing; immuno-oncology, in particular, represents many of the leading approaches in the cancer field.  However, as moderator Claus Andersson (Sunstone Life Science Ventures) pointed out, it’s difficult for an entrpreneur to differentiate a new company in this space and raise funds.  How difficult?  Mark Krul (Aglaia Oncology Funds) said that his firm invests in about 1% of all the opportunities they see; while there are many promising scientific developments, it’s tough to select the right opportunities.  Katherine Cohen (Panacea Ventures) detailed the problem of differentiation: when you’re pitching to an investor, it’s important to make clear what problem it is that your company is addressing and how you will solve that problem.  The investors can see many unmet needs in oncology – for example, many current treatments have high toxicity, and some patient populations are not able to benefit from new treatments that focus only on certain subtypes (such as high-PD1 tumors).  If you’re addressing one of those unmet needs you need to make both the message and the science that backs it up as clear as possible.

Diagnostics play a key role here; Mark highlighted the role of pathology and molecular level understanding of the mechanisms of cancer in order to understand what patient populations your technology is for.  Investors are more likely to be interested in opportunities involving highly distinct pathways and differentiated patient populations.  Investors stressed the importance of biomarkers throughout the discussion, as targeting the right patients is key to improving response rates to treatment.

Investors also see many opportunities outside immuno-oncology; Toshiyashu Shimomura (Taiho Ventures) described his firm’s interest in undruggable proteins and approaches based on complex molecular biology.  Another area of interest for the investors was combination therapies.  There are promising approaches that involve combining a new idea with an existing treatment in a way that breaks new ground – Katherine gave the example of combining a new delivery technology with an existing CAR-T treatment that could allow that treatment to affect solid tumors.

Finally, the discussion touched on how to find oncology investors and build a strong syndicate.  The investors urged the audience to find investors who are truly a fit for your company’s stage of development and have the right expertise to be a part of your company’s board.  “Try to build as good a story as possible, but be honest,” advised Mark.  Claus added that it is important to be open to investors’ suggestions without becoming defensive.  Katherine stressed the importance of telling a strong story to investors that emphasised how your company stands out from the competition, and what your development strategy is.  Katherine’s final advice was: “Be passionate about what you’re doing.  You’re the first person who needs to really believe what you’re doing.  You’re tackling the most important disease – cancer.”

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