Investing in Biotech
- Trends Show Crowdfunding To Surpass VC In 2016 – Crowdfunding industry estimated to grow to $34 billion in 2015, as compared to an average of $30 billion per year in venture capital investment and an average of $20 billion annually in angel investment. 2015 estimate for equity crowdfunding is $2.5 billion invested worldwide. Early days yet, but crowdfunding looks set to play a major role in fundraising for new ventures going forward.
- The Equity Crowdfunding Dilemma: Public or Private Fundraising? – Many startups are choosing to take advantage of equity crowdfunding in a private setting by fundraising from a closed group of accredited investors, and are not taking full advantage of the new exemption for public solicitation.
- Top 15 Corporate Venture Funds: – Lists the 15 largest venture funds run by large pharmaceutical companies. The largest is the Novartis Venture Fund, with over $1 billion in committed capital. Big Pharma has increasingly been outsourcing its R&D to biotech startups and academia, typically acquiring the technology once its a fair way down the development pipeline (often after the Phase II trial stage). These venture funds form a key part of that strategy.
- The “risk-narrative” for impact investments – Andrew Wong (formerly of Experiment.com) expands on his risk-based segmentation for impact investments. If equity crowdfunding is going to work for healthcare and biotech, it’s likely going to require significant numbers of accredited investors willing to take on “Catalytic” (i.e., venture philanthropy) and “Venture” impact investments.
- Google Is Now Alphabet, And That Spells Big Things For Healthcare – Why is Google transitioning into a holding company structure? Dan Diamond argues that this new model will facilitate the company’s investments in cutting-edge health technology, including Calico (the biomedical spin-off focused on aging) and Google Ventures, which invested 36% of its dollars in healthcare in 2014.
- First Round 10 Year Project – First Round Capital analyzed the data on the 300 companies and 600 founders it has invested in since 2005, and lists the 10 key findings.
Recent Deals in Biotech
- Gates, Google Join $120 Million Funding for Genome Editing Firm – Editas Medicine, George Church‘s genome editing spinoff gets a huge investment from Bill Gates and Google Ventures, among others, to help further develop the Crispr/Cas9 gene editing technology.
- Despite regulatory troubles, DNA testing firm 23andMe raises more money – 23andMe‘s regulatory dispute with the FDA is in the process of being resolved (it gained its first FDA approval for a genetic test kit earlier this year), and the company has now raised a fresh $80 million, though this is still $70 million short of its $150 million goal for this financing round.
- This Medical Charity Made $3.3 Billion From a Single Pill – Tells the story of the Cystic Fibrosis Foundation‘s remarkably successful venture philanthropy model. It parlayed $150 million in financial support for Vertex Pharmaceuticals since the late 1990s into a share of the revenue from Kalydeco (ivacaftor) – the blockbuster CF drug that went on the market in 2013. The foundation recently sold its royalty rights for $3.3 billion, which it has said it will reinvest in more research.
- Aspect Biosystems Announces Seed Funding – Vancouver-based UBC spinoff Aspect Biosystems secures seed funding and announces major deals for its bio-printing technology with two pharmaceutical companies.
The first summit organized by British Columbia’s Personalized Medicine Initiative took place last week, and I was blown away by the level of energy and excitement in the room. There were a number of really interesting talks, including Leroy Hood on the 100K Wellness Project, Julio Montaner‘s argument for treatment as prevention for HIV, Joel Dudley on incorporating genomic sequencing into clinical practice, Jim Kean on founding and growing Wellness FX, and Jill Kagenkord on 23andMe‘s vision for leveraging its rapidly growing collection of customer genetic and phenotypic data to advance medical research.
Three themes came through loud and clear at the conference, and point to how personalized medicine can lead to patient empowerment and to better health outcomes.
1. A Focus on Wellness, not Sickness
A majority of speakers highlighted the need to focus on maintaining and optimizing people’s wellness, rather than curing their sickness when wellness breaks down. Wellness is the medical equivalent of positive psychology, and is the key to generating the economic benefits that will power the adoption of personalized medicine, since preventing disease and maintaining health are likely to lead to substantial cost savings to both health insurers and to society at large.
2. Data is Power, so Patients Must Track
To turn health maintenance and wellness into a scientific enterprise, though, large amounts of data at the level of the individual are necessary. While the rapidly decreasing cost of whole-genome sequencing means that most of us will probably have our genetic data available within a few years, the key to connecting genomic information to health outcomes at an individual level is to dynamically track a wide variety of phenotypic and environmental data. This will allow researchers to identify actionable biomarkers that indicate increased risk of disease (or movement away from a healthy state), and allow patients to monitor those biomarkers and move them towards a healthier level.
This is why direct-to-consumer digital health technologies are likely to be a game-changer for personalized medicine. Fitness trackers, smart-watches, biosensors embedded in clothing, “tricorders”, and, ultimately, implantable biosensors, will generate a deluge of data that will facilitate data mining aimed at identifying key wellness biomarkers, and will help patients to monitor and modulate their own profiles.
3. Direct Financing by End Users can Accelerate Development
A third way in which the personalized medicine ethos can empower users is by allowing them, in turn, to empower the development of personalized medicine. New “democratized” financing tools like crowdfunding provide end users with an avenue to support the development of specific technologies that allow users to capture their own health data. Crucially, users can support this type of initiative both by providing capital to fund R&D and commercialization, and by providing early users who will help to refine the product or service. Joel Dudley mentioned two such technologies in his talk at the summit:
- The Scanadu Scout – a “medical tricorder” competing for the Qualcomm Tricorder XPrize. Scanadu crowdfunded $1.66 million in 2013 on Indiegogo to fund development of the Scout, and subsequently raised $49 million in four investment rounds. A key part of the appeal of their crowdfunding campaign was that they hoped to enlist backers, who have begun to receive Scout prototypes, to participate in the clinical trial needed to obtain FDA approval of the Scout as a medical device.
- The uBiome project launched in 2013 with a crowdfunding campaign that raised $357,000 on Indiegogo. Campaign backers, and the company’s current customers, send a swab to the company and complete a range of surveys. They receive access to their microbiome sequencing data as well as to tools that allow users to compare their own microbiome to other users, track changes in their microbiome over time (via repeated sampling), and identify potential lifestyle interventions to achieve a more favorable microbiome profile. The company’s mission is to “equip all individuals with the tools they need, in order to empower them to learn about the unique balance of bacteria in their bodies”.
Direct-to-consumer companies like WellnessFX and 23andMe have not used crowdfunding, but they benefit from the same technological trends that allow them to offer biological tracking services at price points that are low enough to attract a large market of early adopters. In short, this convergence of trends is empowering patients – and we are all patients – to build the installed user base (the “big data”) necessary to make personalized medicine a reality.
It’s not only big government, big science, or big tech that will bring personalized medicine to you – it’s users proactively seeking the best ideas out there and supporting them directly. As Sean George of Invitae put it at the Personalized Medicine Summit – the 1970s are back in Silicon Valley, but this time the transformation will be in human biology and health, not semiconductors.Tags: crowdfunding, digital health, patient empowerment, personalized medicine, Personalized Medicine Initiative, Scanadu Scout, uBiome
How much money can you raise using science crowdfunding?
What should your goal be? How many donors will you need?
If you’re thinking about running a science crowdfunding campaign, these are some of the questions that you need to answer before deciding on whether it’s a good idea to invest your time and effort. There are many resources where you can find general statistics on crowdfunding, but knowing the average amount contributed by Kickstarter backers isn’t going to to do you a lot of good, since you’re unlikely to be offering a physical or digital product as a reward for donors.
Aggregators like Krowdster allow you to look at statistics by category on some of the major platforms (including Pozible and RocketHub, which have formal “Research” categories), but they don’t give you very fine-grained information, and won’t include the majority of science crowdfunding campaigns that are run on research-focused portals and university crowdfunding websites.
Thankfully, a number of scientists, researchers, and bloggers have put together and published statistics on a variety of different science crowdfunding campaigns. This is a list of the resources I’ve been able to find. Please let me know if you come across any other science crowdfunding statistics resources.
|Biomedical funding is broken; crowdfunding is not the fix.||Lenny Teytelman presents data on 84 successful biology projects funded at the $3,000+ level on Experiment.com|
|Calibrating crowdfunding expectations||Lenny Teytelman presents data from 506 donations to the Protocols.io Kickstarter campaign (raised $54,600 in 2014).|
|Crowdfunding drug development: the state of play in oncology and rare diseases||Peer-reviewed article published in June 2014 in Drug Discovery Today - includes descriptive statistics on ~100 crowdfunding campaigns that aimed to fund cancer and rare disease research. (Authors: Nick Dragojlovic & Larry Lynd)|
|To Crowdfund Research, Scientists Must Build an Audience for Their Work||Peer reviewed article published in December 2014 in PLOS ONE reporting on the results of the first three rounds of the #SciFund Challenge, including analyses that identified the most important drivers of donations, which turned out to be Tweets, press contacts, and emails. (Authors: Jarrett Byrnes, Jai Raganathan, Barbara Walker, and Zen Faulkes)|
|Research My World: Crowdfunding Research Pilot Project Evaluation||Report on the 8 pilot science crowdfunding campaigns run by Australia's Deakin University on Pozible. 6 of the 8 projects met or exceeded their goals, generating about $50,000 from more than 700 donors. (Authors: Deb Verhoeven, Stuart Palmer, Joyce Seitzinger, and Melanie Randall)|
|Funding Goals for Successful Campaigns - Experiment.com||Describes the distribution of funding goals for the 168 successful science crowdfunding campaigns on Experiment.com as of August 2014. Average goal: $4,329.|
|Project Success Illustrated Through Social Proof - Experiment.com||As of October 2014, projects launched on Experiment.com only have a 40% a priori probability of success. This increases to a 92% probability of success once a project hits 40% of its fundraising target.|
|University crowdfunding by the numbers - a first look at the data - Funded Science||In an August 2014 post, I presented statistics on 206 campaigns hosted on university crowdfunding websites. Only 26% were science crowdfunding campaigns, raising an average of $6,228 each.|
|#SciFund round 4 analysis||Zen Faulkes summarizes the results of round 4 of the #SciFund Challenge. 23 projects raised $55,272. Full campaign data is also available.|
|Anatomy of the Crowd4Discovery crowdfunding|
|Ethan Perlstein provides data and a first-hand account of his successful 2012 Crowd4Discovery campaign on RocketHub, which raised $25,460 to fund a research project "to determine the precise location of amphetamines inside mouse brain cells".|
|Crowdfunding the Azolla fern genome project: a grassroots approach||Fay-Wei Li and Kathleen Pryer describe their crowdfunding campaign to sequence a fern genome. They raised $7,160 from 123 backers. Total page views for their campaign page were 6,191, for a conversion rate of about 2% (pretty good!). [Update via Andrew Wong]|
|Crowdfunding projects involving Australian university staff||Jonathan O'Donnell provides information on crowdfunding projects involving Australian university staff, for the period of October 2011 - January 2016.|