(Page 3 of 3)
an investment opportunity because such drugs require smaller clinical trials, which cost less money and can be completed faster. In turn, orphan drug investments could produce a faster return for investors—if the drugs win approval.
What’s true for venture capital investments also holds true for nonprofit “venture philanthropy.” Handelin points to patient groups that have found success raising funds for rare diseases, such as the Cystic Fibrosis Foundation’s collaboration with Boston biotech Vertex Pharmaceuticals (NASDAQ: VRTX). That foundation’s support included a $75 million investment contributed over 13 years toward development of ivacaftor (Kalydeco), a cystic fibrosis drug that works on patients whose genes lead to a particularly rare form of the inherited lung disorder. Such drugs can produce handsome financial returns— the Vertex drug generated $371.2 million in 2013 revenue.
Basile says milestone payments and royalties from successfully partnered BioPontis compounds will be plowed back into BioPontis’s fund for use in other rare diseases.
While foundations will welcome new treatments, a BioPontis partnership could also prove attractive to universities. Handelin says many pharma licensing deals leave the original university researcher with a small cut—if any cut at all—which is a strong disincentive to scientists. As a nonprofit that also has executives experienced in pharma negotiations, Handelin says, BioPontis can strike fairer deals for researchers giving them a greater share in financial rewards that come from their discoveries.
BioPontis keeps a Raleigh headquarters but operates as a virtual entity; while Basile is based in North Carolina, Handelin works from Pennsylvania. Much of the support that BioPontis will offer universities will come from vendors, such as contract research organizations. Handelin and Basile are the only two full-time employees right now. BioPontis will eventually hire scientists who will lead university projects but it won’t build laboratories of its own or take on a large staff, nor does it expect to conduct clinical trials. Basile says the nonprofit doesn’t want to get involved in the high capital costs of drug development and testing that no philanthropic group can sustain.
Handelin calls BioPontis a “startup nonprofit” and she and Basile, along with BioPontis’s board, have funded the organization to date. A fundraising campaign to support BioPontis’s partnership efforts is planned to launch next month. Handelin says patient groups and other nonprofits are likely to be donors. She also expects pharmaceutical companies to contribute.
By posting a comment, you agree to our terms and conditions.