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Investing in Cell and Gene Therapy: How Investors View the New Frontier of Life Science Technology

20 Jun

By Lucy Parkinson, VP of Investor Research, LSN

RESI’s panel and workshop sessions explore many topics in early stage life science funding.  At RESI Philadelphia, the Investing in Cell & Gene Therapy panel took an in-depth look at how investors approach the most complex new therapies.

The panel was moderated by Shyam Patel (Associate Director, Portfolio Development and Review, California Institute of Regenerative Medicine), and the panelists were:

  • Jane Hollingsworth (Managing Partner, Militia Hill Ventures)
  • David Xu (Chief Business Officer, Viva Biotech)
  • Peter Young (Venture Partner , Pappas Capital)
  • Hannah Shen (Associate Director, BridgeBio)

While the cell and gene therapy space is still at the cutting edge of life science technology, the field is inching closer to mass adoption.  As Shyam Patel says, following recent landmark drug approvals, there is now a huge pipeline of potentially transformative cell therapies and gene therapies in development, with a thousand clinical trials ongoing right now, and $13 billion in investment in this space last year.  “There’s a lot of money, a lot of products, and a lot of choice for both investors and companies.”

However, these therapies present unique challenges for investors.  Peter Young noted the difficulty for traditional VC investors of managing a fund with a 10-year life cycle and investing in science that takes a generation to mature to the point where it’s it’s suitable for routine use.  Additionally, the industry needs time to adapt to these new technologies, in terms of regulation, manufacturing and reimbursement.

According to David Xu, manufacturing is a key piece of the puzzle.  How can a company consistently and effectively produce a cell therapy or a gene therapy?  As an investor, he pays attention to this technical angle, along with the unmet need involved.  “If you are addressing a problem in which the unmet medical need is not obvious and you don’t have a new angle addressing the manufacturing/technical side of the problem, it’s probably not a good project to look into.”  By investing in technical improvements, it will also be possible to reduce the cost of these therapies, which at present can run to over a million dollars per treatment.

The investors also explored the regulatory issues involved, and noted that the FDA are adopting policies that enable innovation, such as being open to trials that involve fewer patients.  But there’s a challenge for startups in terms of getting the right regulatory expertise.  Per Jane Hollingsworth, “The regulatory part is difficult as there are only so many people out there who really know this space from an FDA perspective.  The FDA is overwhelmed as the result of the successes of this sector.  Now there are many clinical trials taking place and it’s incredible how busy they are.  They want to work with people who understand the pressures they’re under in this sector.  It’s important to attract the right regulatory consultants who can help your company navigate the FDA.”

Circling back to the issue of how an investor’s fund structure can make investments in new fields difficult, Hannah Shen described how her firm BridgeBio has found benefits from using a different structure, in which a subsidiary company is created for each of the assets they invest in.  Hannah says that one benefit of this model is that it makes it pososible for the firm to focus on rare disease programs as part of the portfolio.

So how do investors find the right opportunities in cell and gene therapy?  The investors’ dealsourcing methods include referrals, conferences like RESI and also scientific conferences, tech transfer outreach and academic collaborations, and of course inbound inquiries.  David said that of the pitches his team received, half didn’t pass initial screening.  As his firm (Viva Biotech) is a very early stage investor, they focus on the quality of the team and the market potential of the product.   For dealscreening at BridgeBio, Hannah Shen focuses on the scientific understanding of the asset, and whether BridgeBio’s resources are a good fit for moving the product forward.

Jane Hollingsworth went into depth on Militia Hill Ventures’ strategy – and said that issues like manufacturing and pricing are not as important in their consideration: “Either we identify a problem and look for the best way to solve it by gathering the best scientific expertise around the world, or alternatively, a really hotshot scientist comes and tells us the problems they’re working on.  It’s always the problem and the people.  If those two factors get through our screening, then manufacturing is just a detail – and reimbursement is even less so. If it’s an unsolved problem that gene therapy could solve, and the best team in the world is working on it, and scientifically it looks viable, we’re going to assume that if it’s successful it will be paid for.”

So will these new technologies become a significant piece of the biopharmaceutical market soon?  Shyam Patel has some pause.  “I would differentiate between clinically promising and commercially promising projects.  The most clinically advanced projects that CIRM [California Institute of Regenerative Medicine] has supported are focused on diseases with small patient populations, and it’s not clear if these projects will be commercially successful.  That’s where they see the most clinical success right now.  What’s commercially promising could be something completely different.”  Nevertheless, the investors continue to look for revolutionary new technologies in this space that could become success stories for their portfolios.

RESI Philadelphia 2019 Innovation Challenge – Check Out the Winners

6 Jun

By Karen Deyo, Investor Research Analyst, LSN

This past Monday, June 3rd, 35 companies representing 9 countries competed in the RESI Innovation Challenge. These companies showcased their exciting technologies, from therapeutics to diagnostics, medical devices to digital health. Taking place at the Convene Cityview in Philadelphia, RESI attendees ‘invested’ their RESI Cash in their favorite companies. We congratulate all finalists selected to participate, and we are delighted to announce the winners – the three companies that received the most RESI Cash. Check them out below!

First Place: Soundable Health Inc

Soundable Health is a digital health company with leading sound AI technology. Our mission is to help people to understand and manage their health and diseases easily to live with dignity. Our first product, PRIVY™, is a mobile app that records the sound of the urine stream on the smartphone at the bathroom and turns it into clinical-grade urine flow exam results for prostate and bladder patients and their physicians. Through alpha and beta test we launched the open-beta app in the US and Korea and have collected over 4000 actual measurement data and results from users and physicians. Especially, over 100 physicians we met in Korea and in the US notice the possibility of the platform for greatly improving clinical workflow and care process. Including Massachusetts General Hospital, Texas Children’s Hospital and Seoul National University Hospital, 6 clinics/hospitals have been participating in clinical researches since 2017. Also, health insurance companies and pharma companies are very much interested in the world’s first & largest real-world data in urology. We’re planning to start unpaid pilots in private practices and institutional settings from June and aim to expand partners for paid pilots with initial revenue by early 2020.

Catherine J Song, Founder & CEO, Soundable Health


Second Place: Drusolv Therapeutics

Drusolv Therapeutics is a clinical-stage drug company based in Philadelphia. We are developing a novel, high-dose statin for early intervention in a blinding eye disease called age-related macular degeneration (AMD). AMD is the leading cause of blindness in developed countries, affecting more people than glaucoma and diabetic retinopathy combined. Unfortunately, there are currently no drugs for intervention before the onset of late-stage vision loss. This is a $4B per year, completely unmet need. Our product, Ocustatin™, was developed at Harvard University. A very successful proof-of-concept clinical trial has shown that early intervention with Ocustatin substantially reduces progression to late-stage blindness. The founder and CEO of Drusolv is a successful serial entrepreneur with extensive experience in AMD.

John Edwards, CEO, Drusolv Therapeutics


Third Place: AIBIOS Co Ltd

AIBIOS, CO., Ltd. is a private pharmaceutical company and specializes in the development of novel small molecule drugs for inflammation related diseases. AIBIOS’s mission is to develop novel drugs modulating immune responses to satisfy highly unmet medical needs. AIBIOS is developing an oral drug for inflammatory bowel disease (IBD). The drug candidate, AIB301, has a novel mechanism of action exerting biological effects in modulating immune responses in intestinal mucus, not only the adaptive immune system but also the innate immune system, which distinguish itself from other drugs and drug candidates for IBD treatment. AIB301 is in IND enabling stage with GMP grade drug substance will be delivered in June 2019 and soon will be evaluated with GLP toxicity preclinical studies.

Chao Pin Lee, Chief Operating Officer, AiBIOS
Akio Sato, CEO, AIBIOS

Partnering Launches for RESI Philadelphia

2 May

By Karen Deyo, Investor Research Analyst, LSN

On Monday, May 6th, partnering will launch for RESI Philadelphia, and registered attendees will have the opportunity to start requesting meetings. With 150 investors registered so far, this is a great opportunity for companies and investors to schedule meetings with partners who will be a fit for them. Previously, we have published articles on the importance of sending a lot of good, focused messages to get a full schedule of meetings at RESI, so getting a head start as soon as partnering launches is important. Take a look below and see some of the investors already registered to attend!


As of April 30th, 2019

And More…

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