Novo Ventures has committed up to $25 million (€23 million) over a five-year period to fund seed-stage drug discovery projects at the Broad Institute of MIT and Harvard in a deal which it says will propel it into the Massachusetts biotech community.
The new biotech accelerator, dubbed the Novo Broad Greenhouse, will support between five and 10 projects per year at the Broad’s Center for the Development of Therapeutics (CDoT), an academic institution engaged in early-stage discovery projects.
Novo Ventures initially proposed the idea of funding research at the CDoT as it was looking for ways in which the investor, and relative newcomer to Boston, could become a more active player in the local biotech community.
“As we thought about the Broad opportunity, for us it was really an opportunity to partner with one of the world’s leading translationally focused academic institutions, and by doing so, get closer to science,” Scott Beardsley, managing partner, Novo Ventures, tells Xconomy. It will also help build a proprietary pipeline of investment opportunities for the company’s venture practice, which invests up to $500 million in life sciences companies each year.
“One of the challenges for the academic community that’s affiliated with the Broad is that it costs a lot of money to have your project accelerated in this incubator,” says Beardsley, noting that it can cost up to $500,000 for an investigator to collaborate with CDoT—a steep price for even well-funded projects.
The structure also enables Novo to engage directly with academia, adds Novo partner Karen Hong. The company can let science evolve organically and “architect” the companies that emerge from the accelerator as the science progresses, she says.
“It’s a different way for us to take early-stage risk and I think it’s a great time in discovery research where a lot is coming out of academia,” she says. “We’re creating a very interesting discovery preclinical portfolio in a sustainable fashion.”
Additionally, focusing its efforts earlier in the drug development process follows increasing pressure from payers needing to see therapeutics that Hong says need to be “game-changing” to receive adequate reimbursement.
“That really plays to Boston’s strength, because you really do have to take on the scientific challenges doing groundbreaking discovery. Boston has this capacity,” she says. “We want to participate in that ecosystem, and we want to also cultivate the research and bring it into the clinic, and this is one mechanism for us to do that more actively.”
The goal also is to help Novo diversify its risk portfolio: “Although the science may be advanced, the likelihood of finding a therapeutic strategy related to these early ideas is going to be very challenging,” adds Novo Ventures Senior Advisor Burt Adelman, telling us the team will also be working to build out CDoT’s biologic drug development capabilities, as it has historically been focused on small molecules. In line with this, one of the early programs in the Greenhouse will be a monoclonal antibody (mAb) as a potential drug candidate.
Moving forward, projects will be advanced and backed by additional funding on a case-by-case basis. Beardsley anticipates several seed projects will warrant so-called “sprout” funding, likely $1-2 million. In the “bloom” phase, as the company describes it, a project would be supported by a new biotech company or strategic partner. As Adelman explains, the goal is to back projects that will hopefully mature into companies.
“Given the explosion in new biology and our ability to identify more targets and elucidate more disease mechanisms, I think it’s a great resource to the community to be able to leverage this funding to explore those new therapeutic hypotheses,” Issi Rozen, chief business officer at the Broad, tells us.
However, not all projects will move forward and it will be years before any potential clinical trials begin, he says. “We have to be patient but we believe this is a great collaboration to move multiple new projects that otherwise may not have had the force of funding to see them through this journey into the clinic.”
Denmark-based Novo Holdings is wholly owned by the Novo Nordisk Foundation and manages the foundation’s investment assets. Novo Ventures is its US subsidiary with offices in San Francisco and Boston.
Main image: Researcher Allison Hands in the compound storage at the Broad Institute’s Center for the Development of Therapeutics. (Credit: Erik Jacobs, courtesy of Broad Institute of MIT and Harvard)