Systems biology service companies have found that selling this technology to big pharma companies and investors is challenging. Some firms, though, that combine the tools of systems biology with unique insights and drug development programs are finding financial backing and development partnerships.
In 2006, privately held VLST reported raising $55 million in a Series B venture financing round. The company was the first to emerge from Accelerator, a life science incubator formed in 2003. Accelerator, with $15 million from MPM Capital, Arch Venture Partners, and Versant Ventures behind it, provides money, management, laboratory space, and the expertise of the Institute for Systems Biology (ISB), a nonprofit organization founded by Leroy Hood, M.D., Ph.D.
Accelerator has launched 12 startups, the latest being cancer-focused Oncofactor last May. David M. Schubert, president and CBO of Accelerator, told GEN that his organization has invested a total of $44.5 million since its inception in 2003. Four companies it originally invested in have gone on to raise over $153 million collectively, he added.
“We are not a conventional venture capital firm. We invest extremely modest amounts of money in very early-stage platform-based companies. The bar has gotten a lot higher these days, but we are still on the lookout for compelling and potentially game-changing technologies. Our recent investment in Oncofactor is a good example of this.”
Dr. Hood defines systems biology as the ability to look at all of the elements in a biological system and to measure their relationships to one another as the system functions in response to biological or genetic perturbations. By elements he means genes, messenger RNA, proteins, protein interactions, and so forth.
None of the companies at Accelerator, including one called Homestead spun out of his own lab, are truly pursuing systems biology, Dr. Hood pointed out.“It’s still too soon. Any company that claims to be in systems biology is doing it on a very marginal basis because we’re just now developing the necessary tools.”