Here's a $25M seed fund aimed at backing some brash new drug ideas out of the Broad
As a former academic and a seasoned drug developer, Burt Adelman knew when he was recruited as a senior advisor to Novo Ventures in 2017 that one of his key priorities needs to be introducing the fund to the network he was so deeply embedded in.
“I was thinking long and hard on how can I, as a Boston insider, help Novo really get inside the ecosystem of Boston biotech?” he recalled in an interview with Endpoints News.
Novo Ventures, whose headquarters is located in a Danish campus that also houses Novo Nordisk Foundation, had just recently put its foot down in the city. Despite its broad investment mandate in life sciences and steady cash flow — it can invest anywhere between $400 million to $500 million per year — it didn’t have the connections that other, perhaps smaller, VCs in the area enjoyed. The perceived association with the diabetes drugmaker perhaps didn’t help, even though the two entities are separately held by Novo Holdings.
Adelman found the answer while founding another startup, Verve Therapeutics, with gene editing tech out-licensed from the Broad Institute. Catching up with Broad chief business officer Issi Rozen, he realized that there was a pressing need for funding academic projects that were too advanced for NIH grants but not yet mature enough for biopharma companies to bet on.
The explosion of new biological concepts worth exploring and new targets worth validating, Rozen said, also meant an opportunity for new partners — in addition to its existing pacts with pharma and VCs like Deerfield — to step up.
“If you asked people 8 to 10 years ago what is an ideal candidate to start talking about either a therapeutic discovery to out-license or start a company around, they would say 12 to 18 months from the clinic,” Rozen told Endpoints News. “Here we’re talking about years before the clinic. We’re really shifting back.”
Novo is chipping in $25 million to become a partner on that front over the next five years. All 4,000 of the investigators affiliated with the Broad can apply to the accelerator, dubbed Novo Broad Greenhouse, for around $500,000 to test their ideas within a year and a half. If they pass the seed stage, Novo will fund the projects further through a sprout stage until they are ready to bloom — either through a biotech spinoff or pharma out-licensing.
“The Broad Greenhouse was really a way to help us start at that earliest point in that cycle,” said Scott Beardsley, managing partner at Novo Ventures about their vision to be the “cradle of great life sciences.”
Beardsley, Adelman and Karen Hong, a partner in the Boston office, are Novo’s three permanent representatives on the Greenhouse’s joint steering committee, meeting every quarter with their counterparts from the Broad’s Center for the Development of Therapeutics (CDoT). When they are not convening, the committee also coaches investigators on putting their ideas in the context of drug discovery.
Having earned her PhD in Eric Lander’s lab before he became the Broad’s director, Hong has firsthand knowledge of the institute’s human genetic orientation.
One example would be the work being done by Dana-Farber researchers Kent Mouw and Eli Van Allen, one of five projects already enrolled in the Greenhouse. In their study of “exceptional responders,” oncologists identified a certain genetic mutation that appeared to break a protein and interfered with DNA repair. Patients with that mutation were also hyper-receptive to platinum-based chemotherapy. But they weren’t quite sure why — and they didn’t have the money to find out.
“Trying to come up with a sensitizer to an old-fashioned chemotherapy isn’t the most traditionally obvious thing to do. And it’s pretty high-risk,” said Van Allen in a blog post.
With money from Novo and support from CDoT, their team will now screen small molecules in hopes of finding one that mimics the effects of the broken gene.
The Broad’s established relationship coordination has saved everyone lots of paperwork, Adelman said. And terms are already in place for when Novo wants to take an idea to the company creation stage.
“We are not ripping the baby from the mama,” he said. “We are actually creating an environment where the scientists who have discovered these ideas are intimately involved going forward in the process of advancing the idea to the extent that even some of the funding goes directly back in their labs.”
That could mean a lot for the scientific community at large, Rozen added.
“Here we have very much increased capacity to prosecute initial projects at a very large scale,” he said. “This is significant for faculty to have this opportunity to advance this science.”