In this guest post, Allison Crimmins (Director of Strategy at Remedy Plan) tells us why her biotech startup decided to raise $100,000 via crowdfunding instead of taking the $1 million in traditional risk capital that was on the table. The funds will help to finance its search for drug candidates that block cancer stem cells’ ability to multiply, thereby preventing metastasis, drug resistance, and the recurrence of tumors. You can support Remedy Plan’s research HERE.
It’s not easy turning down a million dollars. Especially when there isn’t a line of investors beating down your door. And saying no to a big investment in favor of running a crowdfunding campaign may sound crazy, but I think we made the right decision.
I’m part of a company called Remedy Plan. We’re a startup biotech company with an innovative technology that allows us to develop drugs that stop the spread of cancer. Our crowdfunding campaign just launched on Monday at fund.remedyplan.com, and made it past 10% of our goal in the first day. We may not have originally planned on going the route of crowdfunding, but it now plays a very important role in our overall business strategy.
Back in 2013, the co-founders of the company, two former classmates at Berkeley, recognized that the work they were doing on embryonic stem cell biology had implications for measuring similar properties in cancer cells… and they dropped everything to focus on this big idea. Greg Crimmins, who invented a promising new way to treat cancer with immunotherapy (patent licensed by Aduro Biotech), immediately knew he had to switch career streams and build a company that would conduct these new experiments. Remedy Plan was born.
“The scope of it blew my mind,” recalls Greg, “I couldn’t imagine a more important series of experiments that needed to be done.” The series of experiments he had in mind could lead to the development of new cancer drugs that target the spreading properties in cancer cells. Rather than attacking both cancer cells and healthy cells, like traditional therapies do, these drugs will be used in Cancer Containment Therapy. Because the spreading properties they identified are shared by many types of cancers but not by healthy mature cells, Cancer Containment Therapy would be applicable to multiple types of cancer without being toxic, including cancers of the breast, lung, liver, prostate, skin, and brain.
Just one problem: that well known funding gap in the drug development process, dubbed the “Valley of Death”, that lies between preliminary tests on a big idea and identifying drug candidates. Or as NIH Director Francis Collins puts it: “where great ideas, unfortunately, go to die”.
Greg and his partner Ron Parchem pitched their companies to several San Francisco area investors, and at first were met with some good luck. With the backing of two respected National Academy scientists on their advisory board, Dr. Frank McCormick at UCSF and Dr. Dan Portnoy of UC Berkeley, they were offered several investments that totaled over $1M. But because the company was in such an early stage, the two founders were unable to negotiate acceptable investment terms. Unwilling to turn over the scientific direction of the company, they turned down the offers.
Realizing that they weren’t going to get the kind of terms they desired, the company took a serious turn: towards crowdfunding. While strengthening the core business (IP, business plan, talking to industry partners, etc) and finalizing a patent submission, the Remedy Plan team also spent the next year working through branding exercises, ironing out language and tone, developing a website, a communications strategy, and the foundations of a crowdfunding campaign.
There are a few reasons for refocusing on crowdfunding. Primarily, the money raised over the campaign, along with some smaller private investments, will allow the company to rent lab space, purchase equipment, and run an initial drug screen. Armed with the proof-of-concept results of this initial screen—plus a cadre of supporters who believed in the idea enough to chip in their own money to see the research happen— Remedy Plan will be in a much better position to negotiate the terms of future investments needed to develop and optimize drug candidates prior to clinical trials. Crowdfunding is the bit of momentum needed to take the first leap across the “Valley of Death”.
But I also believe that there is a secondary benefit to crowdfunding scientific research. Crowdfunding works to tap into people’s inherent curiosity about the world and allows them to be a part of the discovery process. At Remedy Plan, we know that relying on the generosity of people comes not just with gratitude, but with the responsibility to be upfront and honest about our process. Crowdfunding campaigns like ours enable people to get directly involved in funding research, follow the progress of specific researchers, and share in their successes. It works to demystify science and make it accessible to a wider audience.
Our campaign just launched, so it’s still too early to tell if we’ll hit our $100K goal. Regardless, I’m convinced that launching a crowdfunding campaign has strengthened our company and that the mechanism is a viable, beneficial, and exciting tool that will only continue to become more prevalent in today’s biotech startup world.