Twist of Fate—How A Band of VCs Recruited a Scientific Dream Team to Control Our Cells’ Destinies

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state of the art in stem cell research. Nashat describes it like this: Moon, Beachy, and Ding studied basic pathways inside the stem cells and ways to regulate those pathways. Zon and Scadden were focused primarily on the clinical applications and implications of that modulation.

Of course, the two groups weren’t together—yet. But page forward to the next chapter and you’ll find Polaris’ Nashat and Arch’s Nelsen both in San Francisco at the January 2007 JP Morgan biotech conference. Although Nashat had never worked with either of his Arch counterparts, Polaris and Arch had done a number of investments together, including Nanosys, Alnylam Pharmaceuticals, and deCode Genetics. So it was only natural that the two teams spoke. And as Nashat shared some details of his effort to create a company that developed drugs to modulate stem cells, Nelsen immediately made the connection. “Hey, it’s funny. I’ve been reading the same novel you’ve been reading,” Nashat recalls Nelsen saying.

“If you could nail one event that made this happen, it was that meeting at JP Morgan,” says Rives, who wasn’t party to that particular encounter but was at the conference and quickly brought up to speed. Both sides were excited, he says. “The timing was almost perfect, because Amir approached us right around the time all this [talks with Moon, Beachy, and Ding] was starting to coalesce,” he says. “I think it really helped to have Polaris working on it from a very similar but slightly different angle with other thought leaders.”

The two venture firms quickly decided to unite their efforts, and it turned out the scientific team was all for it as well—the power of their combined pedigree must have been hard to resist. All were top researchers in their fields. All except up-and-comer Ding were senior scientists well known around the world. They already shared many connections. In fact, says Rives, to different degrees all five men “had worked together in scientific collaborations.” And, Nashat says, “When we had the core group we realized we could pretty much go after any problem in stem cell biology.”

What’s more, all believed in the power of an even bigger collaboration. Zon, for instance, has been a big force in getting the international community to work together on stem cells. “The sense of community is a huge part of Fate,” says Nashat. “It’s a very inclusive group of people,” he says. “We definitely don’t have a ‘not invented here’ syndrome.”

And so it began in earnest. “By like the second quarter of ’07 we’d pretty much got everybody lined up,” says Nashat. Then came the hard part of negotiating licensing agreements across five universities and the Howard Hughes Medical Institute (the work of several members of the Fate group is supported by the institute), as well hammering out terms with the founders themselves. “Everybody was great, but it was just a lot of legal work,” says Nashat. “It’s an awful lot of people. A lot of paperwork.”

As the momentum built throughout the spring of 2007, Fate also turned to a different kind of collaborator—on the venture side. Polaris and Arch would act as co-lead investors for the Series A round that closed last November. But to strengthen the financial team and its connections, they brought in two other notable firms. One was Venrock, with whom both Polaris and Arch had worked well in the past. Bryan Roberts, managing general partner of Venrock’s Menlo Park office, was very keen on the idea. Also joining in was OVP Venture Partners of Kirkland, WA. Carl Weissman, a venture partner at that firm and CEO of the Seattle-based Accelerator Corp., which is backed by a syndicate of venture firms to help nurture biotech startups, handled the deal for OVP. Both Roberts and Weissman brought a lot of contacts and knowledge to the venture. Roberts has a PhD. in chemistry and chemical biology from Harvard. And Weissman’s father is Irv Weissman, a renowned scientist at Stanford’s Institute of Stem Cell Biology and Regenerative Medicine.

The last few months since the funding closed have been good, Nashat says. With the core group in place, … Next Page »

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