By Tom Burt (Partner, Sofinnova Partners) & Nick Hutchinson (BSG Lead, Mammalian Cell Culture, FUJIFILM Diosynth Biotechnologies)
The Antibody Society has partnered with Tom Burt, Partner at Sofinnova Partners, a leading European venture capital firm in life sciences, specializing in healthcare and sustainability to produce a 4-part series of articles explaining the basics of financing a start-up biotech company. Our aim is to support and inspire researchers working in labs with a passion for their science and the drive to push their ideas as far as they will go. In Part 1, we discuss the characteristics of the entrepreneurial antibody scientist.
As of 2021, the pipeline of therapeutic antibodies is strong and the biopharmaceutical industry is enjoying unprecedented success in bringing new products to market (1). The launch of new antibody drugs can have a tremendous impact on the lives of patients suffering from diseases for which there are either no existing treatments or current treatments are lacking. Technological developments, such as Fc engineering, bi- and multi-specific antibody formats and antibody-drug conjugates will lead to improved antibody treatments in the future. Not all advances in antibody science are new drugs, however, and many are leading to new enabling research tools and novel diagnostics. The amount of innovation in the sector, driven by creative scientists working in labs around the world, is startling.
Scientists developing antibody therapeutics must progress the idea through discovery and development phases, including preclinical and clinical testing, with various regulatory hurdles that must be navigated before commercial launch can take place. Large pharma and biotech companies are well versed in managing the complexity and costs of antibody development and commercialization, but there is always room in the market for smaller, more agile players who can compete on an equal footing with these giants.
Entrepreneurial scientists are eschewing the traditional career pathways of staying in academia or joining large pharma companies (2) in favor of establishing their own companies. They are raising money to finance discovery and development, while managing their biotech businesses in order to turn their ideas into a reality. By adopting this approach, founders can retain much greater control of their inventions, can align the development of their technology with their own values, and furthermore, stand to benefit financially if their candidate is shown to be successful.
“It’s an excellent time to be considering raising finance for biotech start-ups. Investors have lots of capital that is waiting to be deployed and society is re-considering how it values medtech innovations in light of the pandemic,” explained Tom.
Investors’ attitudes to these different types of start-up will vary depending on the size of the investment that the company will need, the level of risk associated with the investment, the size of the likely return and the time it will take to see a return. Raising finance for different types of antibody start-up companies will depend on the business model and the nature of the innovation being commercialized. A technology for antibody discovery embedded in a piece of equipment will differ from an amino acid sequence that can be licensed, which will differ from an antibody therapeutic requiring ten years and hundreds of millions if not billions of dollars before any revenues are generated.
“Investors in therapeutics are very wary of “one-trick ponies” with only a single drug candidate,” says Tom. “We look for companies with innovative technologies that might be applied to a number of candidates for multiple disease targets. This reduces risks by ensuring the start-up can have multiple shots on goal.”
One such example is the start-up antibody company Gigagen, which was recently acquired by Grifols, a specialist in plasma-derived medicine. Gigagen’s Magnify Platform enables the identification of rare novel targets within the tumor microenvironment, which in turn can be fed into its Surge Platform, allowing the production of recombinant polyclonal antibodies derived from mammalian repertoires. The company has an oncology pipeline containing monoclonal and bispecific antibodies and a recombinant polyclonal immunoglobulin pipeline, which includes treatments for COVID-19 and other infectious diseases.
Like other start-up biotechs, Gigagen had licensed these platforms technologies to other antibody discovery and development companies in order to generate early revenues, before using them as a springboard to launch their own candidate development programmes.
In the next three posts in this series, we’ll explain the start-up financing cycle and how it relates to antibody companies, especially those developing antibody products for therapeutic use. We’ll use industry examples to describe different types of investors in antibody innovations, what they look for in a company or idea, and their expectations as to how the funding is utilized. We will also explain how the funding cycle is changing, which will help inventors fund the clinical journey more easily.
Watch for our second post next week!
1. Kaplon H & Reichert JM (2021) Antibodies to watch in 2021. mAbs.
2. Friedman J. How Biotech Startup Funding Will Changing in the Next 10 Years.