The biotech industry and its investors this week anxiously awaited the clinical test outcomes of two promising drugs that might one day help slow down the degenerative effects of Alzheimer’s. The findings were mixed – Eli Lilly & Co.’s solanezumab showed it has some potential, but patients taking Biogen Inc.’s BIIB037 failed to show statistically cognitive improvement – and investors reacted accordingly.
But while stock-market investors were paying attention to those two pharmaceutical companies, venture capital has been piling into regenerative medicine companies. The industry in 2014 received more than US$8 billion in funding, and investments in the first quarter of 2015 reached US$2.7 billion, up 135 per cent compared with?the very first quarter this past year.
The reason is straightforward: Nearly 40 million people this past year died from chronic diseases and 20 percent of those deaths were cancer related. Although survival rates have nearly doubled previously 40 years, the planet Health Organization predicts cases of cancer will increase more than 70 percent in?the next two decades.
The rise in cancer-related deaths may have?helped?increase funding?in biotech and much more specifically regenerative medicine where scientists are developing therapies that advertise to treat and maybe even cure cancer along with other chronic diseases.
Yet regardless of the increase in funding, Canada is still producing relatively few companies in the sector?- something the Toronto-based Centre for Commercialization of Regenerative Medicine (CCRM) and venture firms hope?to change.
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\”All of the?sudden, in a space which has been evolving over many years, we\’ve got incredible efficacy data,\” said?Michael May, CCRM’s chief executive.
The recent influx of funding has been concentrated around cancer treatments, which represent one-third of new clinical trials so far in 2015. Investors are particularly thinking about cancer immunotherapies, where patients\’ own immune cells are engineered to acknowledge and attack tumours.
\”The science in Canada is completely as strong because the U.S., but I think there are other parts of the ecosystem that are not as robust,\” said?Jerel Davis, partner at Versant Ventures, a San fran investment firm with?a mandate to invest in lesser-known health science hotspots. It funds 110 companies, four which are Canadian.
Davis?said Canada lacks the established community of entrepreneurs, managers and vc\’s that the United States has in cities for example?San Francisco, Boston and North park. In the past four years, Versant has opened offices in Vancouver and Toronto to help spawn companies from?the rich scientific research communities in those cities.
CCRM, meanwhile, launched its first company, ExCellThera, in June, looking to take advantage of the emerging investing community around biotech in Canada.?The Montreal-based startup?is creating a technology that expands stem cells used to treat and potentially cure leukemia. The first clinical trial phase is slated to begin later come july 1st.
The science in Canada is completely as strong because the U.S., however i think there are other parts of the ecosystem that are not as robust
ExCellThera received funding?from IRICoR, a drug discovery and commercialization centre in the Universit de Montral that has invested in nearly 30 new technologies.
But funding for biotech startups, even just in the U.S., hasn\’t always been as forthcoming.
Investment in?regenerative medicine started to decline?when the biotech bubble burst in 2000 and suffered a steep plunge?in 2008 because the market collapsed. The industry lost 25 per cent of its venture firms, and capital dwindled close to 40 per cent of pre-2000 levels. Most venture businesses that stuck around shuffled money out of early stage biotech companies into less risky late-stage companies.
\”Because regenerative prescription medication is an emerging field, obviously most of the companies are early stage,\” said?Greg Bonfiglio, managing partner at Proteus, LLC, a regenerative medicine investment firm in Portola Valley, Calif. \”It was very challenging of these companies to draw in interest from the venture communities. That changed pretty dramatically about 18 months ago with the emergence of cancer immunotherapies.”
The biotech window swung open in late 2013, and in the past year, more than 300 treatments and products have successfully passed early clinical trial phases, earning faith and funding from investors.
\”I\’ve been speaking at biotech conferences for 7 or 8 years on funding issues,” Bonfiglio said. \”For the first time I\’m able to stand up and say, \’The market has finally improved and you\’re now likely to find venture guys a lot more interested.\’\”
CCRM’s?May suggests companies for example?Seattle-based Juno Therapeutics for success stories in regenerative medicine startups.