Fueling the Future

The Pharmaceutical Business Conference Group recently hosted its annual COG New England Conference, which included several high-impact discussions from industry pioneers. Day one’s closing panel, moderated by Pete Bastedo, CEO of Lumerate, included prominent CEOs from leading biotech companies who shared their perspectives on the current state of funding in the biotech industry. The panel featured the following CEOs:

- Gilmore O'Neill, CEO of Editas Medicine

- Rahul Ballal, CEO of Mediar Therapeutics

- Jeremy Springhorn, CEO of Nido Biosciences

- William Korinek, CEO of Astrocyte Pharmaceuticals

- Frank Borriello, CEO of Alloplex Biotherapeutics

- Russell Lamontagne, CEO of BITT (Boston Immune Technologies and Therapeutics)

- Daniel Getts, CEO of Myeloid Therapeutics

- Jack Hoppin, CEO of Ratio Therapeutics

The discussion delved into various aspects of biotech funding, offering valuable insights for industry professionals. CEOs provided their outlooks on the current funding landscape, highlighting the challenges and opportunities faced by companies seeking financing. The panel also explored alternative avenues for securing funding beyond traditional venture capital investments and IPOs, shedding light on creative strategies they’ve adopted.

The panelists gave their takes on how funds are allocated within biotech companies upon receiving financing, offering insights into spending priorities and resource allocation strategies. Furthermore, the discussion touched upon the emerging areas in biopharma, providing valuable perspectives on the industry's future direction. Visit this page for summaries of each company on the panel.

Nuclear Winter

In the current biopharma funding climate, CEOs across the industry echo a chorus of challenges and adaptations. One prevailing theme is the shifting definition of inflection points for public biotech companies. Traditionally, early proof-of-concept data in phase 1B trials signaled significant stock appreciation, but CEOs like Rahul Ballal and Jeremy Springhorn emphasize that these milestones may no longer carry the same weight in today's market. Instead, companies like Agios Pharmaceuticals find themselves extending capital and clinical development efforts further to achieve meaningful inflection points, reflecting a broader trend of reevaluating value creation in biotech, not just for fundraising but also for patient outcomes. 

Jack Hoppin's insights from Ratio Therapeutics shed light on the challenges and dynamics of fundraising outside the traditional venture capital route, highlighting the importance of family offices and strategic investments in navigating uncertainties. William Korinek underscores the prolonged nature of the current financial challenges, likening it to a "nuclear winter" that requires multiple exits like IPOs and acquisitions to stimulate investment activity. 

Daniel Getts and Frank Boriello reflect on the unpredictability of the funding landscape, where securing capital often requires unconventional strategies and navigating contradictory investor expectations. Daniel Getts points out the ongoing skepticism around new technologies and stresses the importance of relationships over data in securing private investment. He critiques the oversized growth of some biotech firms, arguing for a more measured and cost-effective approach to biotech development that aligns with real-world needs rather than inflated expectations. 

Gilmore O'Neill discussed the current state of funding in the biotech industry, highlighting two main perspectives from the public company vantage point. He noted that there has been a "funding winter," partly due to the necessary correction after a period of abundant cheap money flowing into biotech. This correction has led to disappointment for investors who may have invested unwisely in the past and are now recalibrating their strategies. He categorized the technology landscape into two broad groups: mature technologies, where big Pharma is making substantial bets to fill revenue gaps, and new technologies, such as gene therapy and gene editing, which are not currently attracting as much attention from big Pharma due to their focus on short-term revenue needs. O'Neill emphasized the importance of focusing efforts on areas most likely to succeed and raising capital to support those efforts, even if it means accepting dilution. He underscored the challenge of balancing dilution concerns with the necessity of raising capital to advance promising projects.

When the Goin’ Gets Tough, Get Creative! 

When we think of the funding process, we typically think of the traditional SBIR grant, then Series A, B, and so on. While it’s certainly a reliable path to take, the accessibility to funds through this strategy is heavily reliant on external factors such as the economy, geopolitics, and upcoming elections. Daniel pointed out early on that there’s always money out there, it’s just not always easy to get it. This sparked a fascinating conversation where these 8 CEOs shed light on alternative, or “creative” ways to fund a biopharma company in today’s climate. 

Russell started by emphasizing the distinction between “company founding” and “company supporting”, highlighting the challenges of seeking funding for early-stage projects versus established ventures. He stressed the importance of understanding investors' expectations and limitations, noting that asking for support to realize an idea requires a different approach compared to receiving large-scale investments to build a company from scratch. Russell also discussed the emergence of strategic investors, such as family offices and big vendors, as viable funding sources, urging companies to explore various angles to secure funding.

Rahul shared insights into strategic partnerships with pharmaceutical giants like Pfizer and Lilly, detailing programs like Pfizer Ignite and Lilly Catalyze360, which offer access to R&D and clinical resources. He highlights the flexibility of these programs, allowing companies to choose between fee-for-service, equity-based, or data-sharing models. Meanwhile, Jack recounted his company's unconventional founding, where capital was raised through the sale of a previous company and strategic partnerships for imaging studies. He discusses the benefits and challenges of such arrangements, noting the importance of ensuring that transactions stand independently from service agreements to maintain integrity.

Jeremy reflected on leveraging personal connections and high-profile endorsements to attract funding, recounting how he received unexpected contact from a well-known figure in Formula 1, who expressed interest due to a personal connection with someone affected by the disease his company is addressing. He mentioned another interaction stemming from a contestant on a popular cooking show who also has the same medical condition. 

The conversation also touched on the delicate balance between cash and equity, with participants discussing the merits of cost-sharing arrangements versus equity-based deals. William shared his experience with equity-based deals with clinical research organizations (CROs) to bridge funding gaps during pivotal stages of development. He underscored the value of equity in sustaining business growth, despite potential dilution. Daniel, other the other hand, cautioned against compromising equity stakes, emphasizing its significance in attracting reputable investors. Frank highlighted the necessity of being resourceful in fundraising efforts, leveraging introductions, and securing investments from diverse sources to sustain company operations.

Lastly, Gilmore raised the prospect of working with sovereign wealth funds, particularly those with national interests in specific diseases. He prompted discussion on the potential for novel funding partnerships with entities driven by societal health priorities. Overall, the conversation underscores the evolving landscape of biotech funding, with an emphasis on adaptability and strategic engagement with a variety of investors and partners.

Trials Down Under

Australia has quickly become a hotspot for biotech & pharma, largely due to the tax incentives for organizations running clinical trials in the country. The panelists were asked to share their perspectives on the topic based on the experiences they’ve had. Frank highlighted Alloplex’s positive experiences of working in Australia, praising the government's efforts to attract high-paying, clean technology ventures. He emphasizes the financial benefits, noting that the Australian government provides cash-back incentives upon filing income taxes, a practice he finds beneficial compared to the U.S. system. Daniel, who serves on a federal government committee in Australia, underscored the country's advantages in terms of streamlined processes and accelerated timelines for clinical trials. He points out the swift approval processes and efficient patient enrollment, exemplifying the ease of conducting trials in Australia. Moreover, Daniel discussed leveraging (Australian) state governments against each other to secure funding for infrastructure, highlighting Australia's proactive approach to supporting biotech ventures. 

In contrast, Jack mentioned that other countries/states are beginning to create analogous programs, namely Texas, which match capital raised for clinical trials dollar for dollar. Though he acknowledges that these incentives are appealing, they did not motivate him to relocate his company. Meanwhile, William shared a different perspective, explaining why his company did not find it advantageous to conduct trials in Australia. He emphasizes the hidden costs (setting up a corporation in Australia) and longer time frames associated with receiving tax rebates. He noted that the benefits may align differently with the needs of all biotech companies since the savings come as tax returns which can leave some organizations strapped for cash as they wait. 

Lastly, Rahul expressed surprise at the positive perception of Australian data among prospective investors, indicating that Australia's reputation for excellent data quality enhances its appeal as a clinical trial destination. Overall, the panelists shed light on some of the nuances within this program. While the framework is largely beneficial for many biopharma organizations, and Australia itself, it isn’t a solution fit for all – yet many expect similar countries to follow suit in coming years, making the benefits of Australia’s program more accessible in different geographies.

Poll the Panel

Prior to the panel, Pete spoke with all the CEOs individually and asked them for their perspectives on several topics. Their opinions were shared with the audience, who were then able to share their thoughts through a live poll. 

“What do you think is the hottest therapeutics area these days (outside of your own of course)?

The main observation made based on the results is that there’s a significant variance of opinion on this topic. We didn’t get to hear the audience’s thoughts on this particular question, but if you have any thoughts on the topic please leave us a comment on this article!

The next question posed to the panelists was regarding the way funds are allocated after the receipt of funding. The panelists were given three buckets to allocate to:

• Clinical Activity 
• Manufacturing and Process Development
• G&A (General and Admin), Team Growth and Discovery R&D

Here’s how each of them answered



Prior to seeing what the panelists said, the audience was then asked to do the same exercise and compare results. Here are the results:

• Clinical Activity = 50%
• Manufacturing and Process Development = 30%
• G&A, Team Growth and Discovery R&D = 20%

Overall the audience and panelists were aligned with how biopharma companies allot funding.

Finally, the panelists and audience were asked: 

Vendors should have equity skin in the game: For or Against?

Here’s how the panelists responded:

Again, the audience had the opportunity to submit their vote and the results showed that 44% were in favor of vendors as a source of equity investment, while 56% were against the idea.

Bring on the Thaw 

Drawing from the insightful discussions of industry pioneers at the COG New England Conference, it's evident that the biotech funding landscape is undergoing an inflection point of its own. The panelists emphasized the need for adaptability and creativity in securing financing, highlighting alternative avenues beyond traditional venture capital investments and IPOs. From leveraging personal connections and strategic partnerships to exploring cost-sharing arrangements and tapping into sovereign wealth funds, biotech companies have a diverse array of funding opportunities at their disposal. 

The panel shed light on the evolving dynamics of clinical trial incentives, with Australia emerging as a hotspot for its favorable tax incentives and streamlined processes. While these programs offer substantial benefits, the panelists also noted the importance of considering individual company needs and the broader financial implications. Overall, the discussions underscored the importance of strategic engagement with various investors and partners, reflecting the dynamic nature of biotech funding in today's ever-changing landscape. 

We hope this served as an insightful summary of what was an extremely engaging discussion. Let us know future topics you’d like to be discussed at upcoming COG Conferences, you can access upcoming events here.