A Recent Example
Let me give you a recent illustration of how drug development domain expertise has worked in practicewith positive impacts on one company's big early financing round.
GlobeImmune is developing yeast-based immunotherapies targeted at a range of intracellular infectious diseases, as well as cancers. It is the kind of broad technology that might, in other circumstances, have seduced company management to show efficacy in as many animal models as possible. Instead management asked the question: Which disease offers the earliest possibility of clinical proof of principle? The decision was complex.
Three diseases offered the best possibilitiesinfectious HIV, hepatitis C, and cancer. All three offered large potential markets, but very different drug development pathways.
HIV required extensive and expensive monkey-model animal trials, complicated regulatory requirements, coordination with federal agencies, and competition. Moreover, the failures of previous HIV immunotherapy trials had created a certain aura of cynicism among investors that might have been difficult to overcome. Such barriers might have slowed studies by months and, perhaps, years.
Development of hepatitis C therapy faced fewer constraints, but offered no obvious animal model. Cancer, on the other hand, lent itself to a well-established animal model. Subsequent safety trials take place in patients with the disease, and clear biological markers offer an opportunity to measure the drug's biological activity in patients early on.
GlobeImmune thus chose cancer as its first target. That choice has meant that even at the beginning stages of safety trials on very ill Stage IV cancer patients (who have failed all available therapy), GlobeImmune has been able to demonstrate clear biological activity.
This, along with other data, brought in new investors at a stepped up Series B valuation this August (in the face of considerable skepticism about cancer immunotherapy companies, where the failure rate has been high).
Manythough still too fewother examples come to mind, as well.
How should young companies identify and nurture drug development domain expertise? The answer is to make it a key criterion for early selection of staff, venture capitalists, and scientific and clinical advisory boardsand then making their input central to product development decision-making.
If done properly, the company will greatly increase its chances of higher valuations even in their high-risk, early rounds and, ultimately, a successful, profitable exit.