Applying innovations to life sciences investment

During a recent panel at Partnering for Cures, experts discussed the financing gap in life sciences and spotlighted varying perspectives on the “VC retreat” and the need to apply innovative financial and operational models to finding and funding science that holds the promise of helping patients. Renowned leaders in investment deliberated challenges in the life sciences eco-system and challenges that prevent life sciences from becoming a better investment sector. Panelists candidly shared varying points of view – from finding the incentive to kill bad experiments to the pros and cons of collecting big data.

Jens Eckstein of SR One, GlaxoSmithKline’s independent healthcare venture capital organization, noted that “syndication is the biggest problem we are facing in the early stages.” Eckstein argued that a major issue in bioscience today is that “things go to the clinic that should never go to the clinic,” with little incentive, both from academia and pharma, to kill inefficient and bad projects. As a result, he said, an inefficient system with little change in attrition in clinical development over the past 20 years has developed, creating a more difficult investment climate for everyone. Eckstein also argued that sample size and finding individuals to curate data in a useful manner are tasks still too big to tackle.

Alastair J.J. Wood of Symphony Capital echoed Eckstein’s comments, stating “I think the current [development] model is fundamentally broken.” Wood hailed a new approach to drug development that mirrors the distributed partnering model mentioned in FasterCures’ Fixes in Financing report. Wood believes that the status quo of picking winners, as pharma tends to do, is fundamentally flawed and argued that without changing the system to spread risk adequately, there is no means of attracting new capital. On data sharing, Wood was more optimistic than Eckstein, calling for the availability of pre-clinical data and the usefulness it will provide in determining the effectiveness of compounds and viability of new drugs on the market.

Likewise, Garen Staglin of One Mind for Research and Dan Hartman of the Bill and Melinda Gates Foundation also saw huge potential in data sharing and stressed the importance of public-private partnerships and the need to bring individuals together. “By bringing people together, we have a shorter distance to go,” noted Hartman. Staglin stated that the key for developing cures can be found in bringing different sectors together and creating stronger collaboration. “Incidence rate of illnesses do not know geographic boundaries nor does the science that will help us unlock it,” he said. Hartman agreed, noting that “with access to data, we decide where to put money for products that actually help people.”

Moderator Chris Varma of Blueprint Medicine asked a poignant question: If the product development cycle is shorter in other fields, such as IT, and prediction methods to better estimate outcomes are so much better in other fields, why do we still invest in life sciences? Eckstein gave a response that summed up the feelings of the panelists: “If things work, we can make a tremendous difference.” With the right collaboration, resources, investment, and the right optimism, science has the capability to achieve amazing things.