Sixty-plus years after rock n’ roll music took shape there, Cleveland is once again a birthplace for something with revolutionary potential—this time in drug discovery.
The for-profit biotech accelerator BioMotiv makes the same promise about bridging the funding dearth or “Valley of Death” between the seed stage and product launch made for decades by a slew of accelerators, incubators, venture capitalists, and other investors.
But where they all invest in forming companies around promising technologies, BioMotiv instead takes stakes in new drugs and technology platforms deemed to have market potential. So far, BioMotiv has signed an exclusive option to commercialize a cancer treatment being developed by an undisclosed New York state institution. The company is also in talks for options on an anti-inflammatory technology from a university in the South, and an oncology technology from a West Coast university.
BioMotiv is among a few groups nationwide looking at offbeat approaches for bridging the Valley of Death. Last year, VC firm CMEA Capital launched Velocity Pharmaceutical Development, with investment in repurposed drugs in mind. Also in recent years, several disease foundations have worked to advance new treatments through their own grants, like the Michael J. Fox Foundation for Parkinson’s Research, or by carrying out R&D directly with academic partners, as the nonprofit Myelin Repair Foundation has done [see GEN, Aug. 29, 2012].
“They have, essentially, the same metric that a pharmaceutical company would have, which is, ‘We need to see a drug on the market.’ But they don’t have the constraints of quarterly stock reports and the market realities that would affect a pharmaceutical company,” Douglas Crawford, Ph.D., director of industry alliances and associate executive director of the California Institute for Quantitative Biosciences (QB3), whose five incubators house more than 60 startups. “With that liberation and the freedom a pharma company wouldn’t have for thinking very long-term and not thinking about the return of investment, can they solve a problem that others have not been able to solve?”
Breadth of Interest
One advantage for BioMotiv: Unlike many foundations and VC firms, it is interested in all disease areas and therapeutic types. “We're looking at what pharmaceutical companies are looking to license into their portfolios. And the breadth of interest is still very wide there,” Baiju Shah, BioMotiv’s CEO, told GEN.
Shah is familiar in Cleveland-area life sciences circles as the longtime CEO of BioEnterprise, a nonprofit biomedical business accelerator that provides management advice, business development, and access to capital for the region’s biopharma, medical device, and healthcare services ventures. Earlier this year, Shah left BioEnterprise for BioMotiv, where he leads the management team that will select the early-stage drug development projects the company plans to nurture until maturity.
“We define it as human proof-of-concept, or human proof-of-efficacy data, at which point we then would license it out to strategic partners,” Shah said. “When projects are no longer showing promise, both on an absolute as well as a relative basis, then those projects will be returned to their source of invention.”
BioMotiv is part of the Harrington Project for Discovery & Development, which is raising $250 million toward developing drugs for commercialization by investors. The project raised its first $50 million from the Harrington family that once owned Edgepark Medical Supplies—the same family that joined UH to raise $21 million for BioMotiv earlier this year.
BioMotiv’s goal is $100 million. Additional funds have been raised, though Shah won’t say how much until the company releases an update in Q1 2013.
The six-employee BioMotiv is looking to hire a chief business officer now, and two to three project managers with pharma experience.
“We should be operating roughly 20 projects in parallel” when fully staffed, Shah said. “Since we have started, we have looked at about 120 opportunities. We expect it will continue to grow as people become aware of our interest and capability.”
For that to happen, BioMotiv will need to show it can nurture new drugs and platform technologies as well as, if not better than, other would-be-drug developers now looking beyond the usual capital-to-companies startup model. The number of such entities will likely grow as big biopharma grows more desperate to cut R&D costs. And over time, BioMotiv should be able to quantify how much in money and time its drug-development model saves over traditional discovery avenues—numbers that the sources of new drugs and technologies will be very interested in learning as they decide how to commercialize their discoveries.