Panel
Redefining Philanthropic Drug Discovery
- The nonprofit sector is expected to develop specific venture fund models for disease ecosystems, starting with early-stage groups to avoid reliance on end-of-year philanthropy, while immunotherapy is predicted to emerge as the curative therapy for myeloma pending the attraction of new drugs.
- Foundations are positioned to take higher risks and maintain long-term views compared to market entities, though the American Cancer Society faces challenges in raising capital from small-dollar donors and must navigate donor tension regarding tax deductions versus financial returns for others.
- The organization plans to recruit professional fund teams with expertise in immunotherapy and deal structures, expand the team to Boston and San Francisco, and establish a minimum $1 million investment threshold, while ensuring a separate LLC structure protects the nonprofit mission during for-profit activities.
- Data aggregation and mining using modern techniques are expected to significantly increase discovery speed over the next one to two years, requiring the monetization of $40-$50 million datasets and the integration of AI to avoid slowed processes caused by siloed data.
- The US government is predicted to continue investing in later-stage biomedical innovation via prize competitions like KidneyX and the operational BARDA Ventures Fund, aiming to provide dilutive capital for CBRN devices and therapeutics while avoiding the crowding out of traditional venture investors.
- Government recruitment is expected to face staffing and structural challenges regarding private-sector salaries, necessitating the use of the Intergovernmental Personnel Act for short-term appointments to acquire necessary talent.
- The venture fund model is expected to teach other disease groups, such as glioblastoma and pancreatic cancer, how to build their own investment models to prevent early progress loss, while academic centers are building innovation funds to spin off intellectual property.
- The speaker anticipates a need to bridge the gap between traditional venture firms and healthcare precision medicine, potentially by collaborating with HBS faculty and looking outside the healthcare industry for consumer engagement ideas like those used by Peloton or Uber.
- Strategic risks include the potential damage to the American Cancer Society brand from picking bad deals, the "collective action problem" where actors unintentionally hinder each other, and the difficulty of creating viable business cases for low-volume drugs in the public interest.
- Donors are expected to seek avenues for returns to consider the model fair, leading to the creation of impact investment vehicles that distinguish between philanthropy and high-risk investments, with the fund expected to act as a sustainable revenue stream rather than a grant.
- The speaker plans to syndicate with top-tier institutional venture capital firms and manage the tension between holding INDs for platform trials and the risks of delays, while also working to accelerate provider adoption and patient access to novel products.
- The speaker expects to address the "natural history" of disease data to incentivize broader community investment, ensure longitudinal data sets are built for better trial designs, and refine the organizational thesis to guide deal deselection.
- Structural adjustments will be required to support an operating business model that collects blood samples, sequences genomes, and manages longitudinal data, moving beyond a purely grant-making approach to include a chief medical officer, chief scientific officer, and chief data officer.
- The speaker predicts a focus on areas where there is high health system spend but a demonstrative lack of development, such as antimicrobial resistance and biological defense, while ensuring the government addresses markets where private capital fears to tread.
- The speaker expects to manage the risk that investors may demand returns within two years before the fund is ready, and must carefully communicate the "no return" aspect to donors to avoid the tension of helping others generate financial gains from philanthropic dollars.
- Future plans include leveraging the foundation's neutral stance to facilitate pre-competitive consortia for public health payoffs, collaborating with health systems to co-own care pathways, and ensuring data is used to solve specific patient questions rather than just generating publications.