Startup Funding As some readers may remember, one of my themes has been the lack of and need for sources of funding for early-stage companies wanting to develop global health products. I’ve written that corporate venture funds should wake up to the opportunities in global health, arguing that these funds are more patient (less interested in ROI) and more likely to invest in the later stages of product development than venture capital firms. So I am pleased to note that one large company with an explicit goal of selling affordable medicines to the rest of the world, Cipla Global Ltd., the Indian generic pharma company, has a venture-funding group. Cipla New Ventures is “to bring affordable medicines in areas of major unmet patient needs in a way that leverages Cipla’s formidable technology, device and development capabilities.” Although I could find the group’s funding capability or goals, I noted that it has invested in four companies since its initiation in 2014.
Funding Opportunity Ideally, an angel investor wants to fund a company at an inflection point, when previous investment (preferably nondilutive like government grants) has reduced the risk and the new money is key to adding significant value to a product or prototype. A FierceDiagnostics story directed me to a Washington Post story about a multi-functional, tablet-based diagnostic machine being deployed in India. Designed by an Indian engineer/US returnee and funded by the Public Health Foundation of India, the Swasthya Slate allows 33 diagnostic tests, has been tested in 80 locations with more than 40,000 patients, and is a component of a health care IT system. It seems like a promising product, and it appeared to me that a plan for its commercialization has not been made.
Ebola Lesson Recently, Bina Venkataraman, Director of Global Policy Initiatives and Senior Science Policy Adviser at the Broad Institute here in Cambridge, MA (a new position?), wrote an informative column in the Boston Globe (Why We Were Not Better Prepared for an Ebola Outbreak, subscription required). She rightly points out that emerging infectious diseases pose a threat to global public health that has not been, and will not be, addressed by the market place and profit-based (i.e., self-sustaining) companies. Political will and leadership is needed, as are incentives for corporate R and D and greater collaboration among public health agencies, academia, and business. She wrote: “it requires deal-making with the industry” (see next). I hope her advice is heard by those who are looking for the Institute’s next Director of Business Development.
More Dx Capability for West Africa Speaking of the Broad Institute and deal-making, the Institute is one three parties in a program to increase the capacity of academic labs in Nigeria, Senegal, and Sierra Leone to perform genetic analyses including those needed to diagnose Ebola (press release in FierceMedicalDevices). Through the efforts of a senior member of the Broad, the Institute has trained in-country collaborators who will participate in the program, the USAID is apparently providing funding, and Illumina, a major CA-based diagnostic device maker, will provide equipment. I could not determine if Illumina was committed to the program long-term or to developing a market in Africa (a better deal for all).
Payday at the CF Foundation Venture philanthropy, a not-so-good term for a foundation’s funding of a company’s product development in line with the foundation’s mission, got a boost last month. The Cystic Fibrosis Foundation announced that it had sold the royalty stream it is due by Boston-based Vertex Pharmaceuticals, for its funding of CF drug development for $3.3 billion (CF Foundation press release, NY Times story, and John Carroll’s FierceBiotech editorial). The Foundation has been way ahead of any other in venture funding, putting about $400 million into companies for more than 15 years ($150 million into Vertex). The Bill and Melinda Gates Foundation has announced an investment program of this scale for global health product development but has invested less than $40 million in companies to date (see my post, “Tossed from the Balcony”). Of course, one major difference between venturing in CF drugs and in global health meds is that CF patients have insurance companies to pay for them (e.g., the new Vertex CF drug costs $300K per year) or have access to support programs (e.g., Vertex Financial Assistance) and the many millions with diseases of poverty don’t. Would foundations (and venture capitalists) put money into global health product development companies if the world’s wealthy countries guaranteed a market? I think so.