Transcript:
I think one of the hot topics in the field is that the investments have skyrocketed.
Between 2019 and 2020, there is a 240% increase in investments.
So what do you think is driving that ?
Because I think we are witnessing an unprecedented valuation for biotechs.
We can think about the very recent Sana Biotechnology’s IPO and there’s been Sigilon before, there’s been quite a lot of IPO recently.
And what do you think is happening in the field ? Why biotechnology is so capital intensive, and why are people betting on it right now ?
To answer that question I’d actually go back about eight to ten years in time. We can start to think about the first wave of cellular therapeutics that came out – 2010 onwards really. When I say the first wave, I really mean CAR-Ts. So all of these advanced biologic cell therapy companies doing CAR-Ts have already exited for the most part.
Kite has been bought. Juno has been bought.
A lot of the big pharma companies have their own CAR-T programs internally.
But I think back to that time – I was a student back then, in biotechnology, so studying – and I remember looking at the venture funding rounds in 2013 and thinking “my god” it is crazy that biotech companies at series A can go out and raise a hundred million, two hundred million at the time. So you look at Third Rock’s investment into Juno as an example, right ? The series A was already a huge investment. Same thing with Kite, as well.
The reason why, I think, is because these were the first like,
genuinely disease modifying and potentially curative therapies in oncology at the time.
And admittedly they were for liquid tumors so they weren’t for solid tumors. These were all for blood cancers.
But the clinical results that people were getting with CAR-Ts was just so good that you couldn’t ignore it. I mean, at the same time, there were some significant safety problems that they were having.
But, you know, one clinical trial a phase two would come out where the entire cohort is cured and then the other one would come out where there would be safety issues. But what people could see is fundamentally that there was a real growth in this space, number one, but the growth was linked to efficacy, and the promise of a genuinely powerful silver bullet for oncology.
Now if we fast forward to the ten years from now, CAR-Ts – whilst they’ve been very powerful, whilst they’ve given some great clinical results. It hasn’t been the same level of democratized oncology treatment promise that we started which has actually happened. We’re still kind of stuck at a gating point for these advanced CAR-Ts and other cellular therapeutics.
We’re getting them to solid tumors. Let’s be honest here. And as a result we’ve had to look other modalities for advanced therapeutics in detail, and try edge our bets a little bit, particularly for the big pharma companies which did not jump on that wave of CAR-T investments. So as I mentioned before, I worked for Bayer. Bayer did not have a CAR-T.
By 2015, when everyone else had one, and acquired them and everything, we didn’t have any advanced therapeutics at the time really apart from the companies we were investing in at Leaps. So Casebia and CRISPR, and then BlueRock and stem cell therapeutics because they were Bayer’s bets to match the fact that Celgene and Novartis, and everyone else had bought up all of these other advanced modality companies.
So I think to some extent there was an opportunistic nature of saying
midway through the 2010s: “what other advanced modalities can we move towards,
so that we can jump in this wave?”
Because clearly there’s a lot of growth, clearly there’s a lot of interest, but actually the promise isn’t there yet.The gold hasn’t been mined. We’ve just found some of the gold at the top of the surface and in the river. This is kind of the way to look at it.
And as a result, I think now, four years after BlueRock was invested and exited again
to Bayer and all the rest of it, people are starting to say:
“You know what ? Cell therapies – we can start to go even further and think about IPSCs, in particular now, as opposed to just cell therapy as a genre”.
And people have started to double down on it again. And as you said there’s 240% increase. It’s a very large increase but given it’s biotech, it’s not that crazy compared to other industries. If this had happened in something like enterprise software or consumer, it would really be crazy. But in biotech, everyone knows it’s highly capital intensive anyway. I think this is more of an acceptance of the industry that cell therapy is now here to stay and that the promise and the hope of saying that by 2030, 10 years from now, cell therapy will really be ubiquitous for treatment for a lot of these advanced diseases and not just in oncology. Also in the areas that we, as iPSC people care about. The areas that we’re looking at, so Parkinson’s and heart disease, two massive chronic diseases, whereby actually if we solve even a minor proportion of that, the impact we have is absolutely huge. So I’d say a lot of it is based on promise. But the genes to start all of this and push it all forwards in 2019 and 2020, all started actually 10 years ago with that first wave of advanced biologics.