Be patient when investing in the health sector – progress takes time!
When looking back on our investments over the last 20 years, especially in healthcare – things always take longer than expected. This is especially true with disruptive technologies that promise to move the needle.
Just think about the groundbreaking RNA technologies in use for the COVID vaccines – it actually took decades (and a pandemic) to get to market.
"In late 1987, Robert Malone performed a landmark experiment. He mixed strands of messenger RNA with droplets of fat, to create a kind of molecular stew. ".... "If cells could create proteins from mRNA delivered into them”, he wrote on 11 January 1988, it might be possible to “treat RNA as a drug”. The late 80s experiments were in fact the cornerstone activities for a technology which reached the market in 2020!
The tangled history of mRNA vaccines (nature.com)
Experience is a premium worth paying for
The field of biomedical innovation is fueled by discoveries that are primarily anchored in academic work. Know your partner, do your due diligence on the innovator and if they are a first time inventor, make sure they are coachable and open to work with the rigor required for successful translation of an «academic project» to a healthcare solution or product. I highly recommend reading Michael Maccoby's article published in 2004, from when the world was basking in the revolutionary promise of the Internet! It was a time when capital followed visionaries and larger-than-life leaders painting a compelling portrait of a dramatically different future – based on the unravelling of the Internet and its impact on society globally. But, beware of the narcissists as the line between visionaries and larger-than-life characters to narcissistic personality disorders is a fine one ... and so easily crossed.
In short, Maccoby's article reminds us of the importance of a balanced management team with Freudian personalities kept in check: the "Narcissist" for the vision, the "Obsessive" for accountability, and the "Erotic" for empathy.
Rigor is key
As an early stage investor, I appreciate leaders of Innovative Biotech/Medtech solutions with a clear vision and ability to paint a better future with their technology. It is critical to help catalyse the leap of faith required for capital providers to "buy in" and "join in the journey"– but this vision needs to be anchored in solid data. Here is where it gets tricky!
"Only 5% of agents that have anticancer activity in preclinical development are licensed after demonstrating sufficient efficacy in phase III testing" (High drug attrition rates—where are we going wrong? | Nature Reviews Clinical Oncology)
You need to focus on the data, the experiments that have been conducted and on the interpretation of the results. It is well known that there are significant issues with current standards in R&D whether it is the wrong use of cell lines for in vitro work (too old, too many passages, etc.) or inadequate preclinical models. In 2012, Amgen researchers made headlines when they declared that they had been unable to reproduce the findings in 47 of 53 'landmark' cancer papers.
Finally, whether your investment is a front runner, like a new type of therapeutic modality or a therapy targeting a new target / a new biochemical pathway – or even an improved solution, your investment needs to have a strong intellectual property strategy! Make sure that the path is clear for some level of IP protection. There are many tools in the IP toolbox, like trade secrets, patents and trademarks – and make sure the team has a solid patent strategy to stay at the cutting edge of the field.
Contribution by
Masha Stromme, Paacs Invest
