Redefining Philanthropic Drug Discovery

Organizational Models and Investment Strategies

• Multiple Myeloma Research Foundation (MMRF) operates a separate LLC venture fund following the JDRF/T1D model, integrating data directly into its investment strategy to accelerate drug development.
• The American Cancer Society (ACS) launched BrightEdge Ventures in 2018 as a separate LLC, investing in later-stage companies alongside institutional venture capital firms rather than early discovery research.
• The Michael J. Fox Foundation (MJFF) focuses on creating pre-competitive consortia to gather natural history data, having secured funding from 30 pharma companies and philanthropy for its COMPASS study.
• HHS/USDHHS is developing the BARDA Ventures Fund to provide dilutive capital for chemical, biological, radiological, and nuclear (CBRN) protection, including therapeutics, diagnostics, and devices.
• The US Department of Health and Human Services (HHS) has expanded beyond early-stage SBIR/STTR grants to include prize competitions and later-stage investments under the USA Competes Act and 21st Century Cures Act.

Data as a Strategic Asset

• MMRF holds the largest genomic data set for multiple myeloma (20 years of data), leveraging this asset to negotiate favorable deal structures with biotech companies and attract venture partners.
• Panelists emphasize that non-profits must own and standardize data to avoid silos, enabling faster aggregation, mining, and utilization for clinical trial design and biomarker discovery.
• MJFF utilized a pre-competitive consortium to fund natural history studies that no single pharma company could afford independently, creating a neutral data source for the entire ecosystem.
• Kathy Giusti noted that sharing data systems with partner foundations (e.g., T1D, Glioblastoma) allows for rapid deployment of venture funds, citing the ability to execute deals within six months.
• Todd Schumer highlighted the need for longitudinal data sets (e.g., blood biopsies, genome sequencing, EHR integration) to move beyond publication metrics toward solving specific patient clinical questions.

Fundraising, Monetization, and Financial Sustainability

• MMRF raised its venture fund by securing high-net-worth individual donors (minimum $1 million) willing to forego immediate financial returns in exchange for mission impact, distinct from its traditional small-donor base.
• ACS identified a tension among donors who are willing to donate for tax deductions but are reluctant to invest in for-profit ventures where they cannot capture the financial returns realized by other institutional investors.
• BrightEdge Ventures is transitioning toward an "impact fund" model to offer potential financial returns to investors, aiming to increase fund size from $150 million and recruit additional staff in Boston and San Francisco.
• BARDA's antimicrobial resistance (CARB-X) project succeeded in growing the antibiotic pipeline from zero to 28 drugs, yet faces an unresolved economic challenge regarding low-volume, high-stewardship drug reimbursement models.
• Panelists noted a market gap for impact investment vehicles in healthcare, suggesting that wealthy donors often have separate "investment" and "philanthropy" buckets that can be tapped for these hybrid models.

Structural and Operational Challenges

• Non-profits face significant hurdles in recruiting professional fund management talent due to salary and benefits constraints compared to the private sector, often necessitating short-term Intergovernmental Personnel Act (IPA) appointments.
• The MMRF and MJFF employ in-house Chief Medical Officers, Chief Scientific Officers, and Chief Data Officers to manage complex operations, distinguishing them from organizations that only grant funds.
• HHS acknowledges structural limitations in federal procurement and staffing that can crowd out private sector participation or slow down the adoption of advanced technologies.
• Umbrella organizations (e.g., ACS, MJFF) face a "collective action problem" where they must avoid crowding out academic spin-offs or university innovation funds that also compete for similar capital.
• Kathy Giusti warned that non-profits must manage the delicate balance of neutrality when picking investment winners to avoid losing credibility with industry partners or congressional scrutiny.

Forward-Looking Statements and Recommendations

• The panel advocates for non-profits to conduct comprehensive "landscape assessments" to identify gaps in investment before launching venture funds, rather than replicating existing models blindly.
• HHS plans to collaborate with the Milken Foundation and FasterCure to map the broader biomedical innovation ecosystem to understand incentives and potential friction between governmental and non-governmental actors.
• Bob Crutchfield emphasized the need for "deselection" processes (saying "no" to deals) based on a defined mission thesis to ensure high-quality investment portfolios.
• The panelists recommended that non-profits should actively move "people who don't want to innovate" out of their consortia to maintain productivity and focus on execution.
• Kathy Giusti called for direct-to-patient engagement and adopting business models from outside the healthcare industry (e.g., Peloton, Uber) to improve consumer communication and care pathways.
• A persistent unresolved challenge cited by all panelists is the lack of viable reimbursement models for antimicrobials that support low-volume drug usage while ensuring adequate returns for developers.
• The group encourages starting with small-scale convening and collaboration to build momentum, rather than waiting for large-scale venture fund capital before initiating progress.