A little more than a year ago the American Heart Association launched an accelerator to fund biotechnolgy and medical device startups to fill a crucial gap in research funding caused by the increasing hesitance of investors to risk support on early-stage innovation. Now, it’s getting ready for a $2 million fundraising round to invest in two companies by the end of the year. It’s also working with sister organizations and mission-driven investment organizations to identify areas of common interest.
In a phone interview with MedCity News, Ross Tonkens, the director of the Science & Technology Accelerator, and Major Gifts Officer Mark Germano said they’re forming a group of donors who can provide expertise to screen applications. These donors have investment backgrounds steeped in biotechnology, drug development and medical devices. They also have expertise in legal issues, commercialization, IP, regulatory, clinical trial design and conduct issues. In a lot of cases, these are people who have had personal or close contact with people who have had cardiovascular disease or a stroke and want to see things move from the [lab] bench to bedside.
In the past year, says Tonkens, it has created a network of collaborative investors from other nonprofit foundations where there’s a strong likelihood that their interests would align. Tonkens said it’s working with 16 sister foundations such as the American Cancer Society and Diabetes Foundation to identify areas of common interest for collaborative investment. For example, a company developing a diagnostic for cardiovascular disease may also have applications for cancer. In addition to sister foundations, it is also looking at mission related investment organizations like BioMotiv — a for-profit division of the Herrington Project for Discovery and Development in Cleveland, Ohio. BioMotiv is aggressively looking for profit.
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It is devising a strategy to increase donor engagement to smooth out the peaks and valleys and predict with some accuracy when it should do new rounds of investment because collaborating multiplies the value of each donor dollar. It shouldn’t be surprising that they’ve been re-evaluating their strategy, Tonkens explains, as foundations advised them before they started that it’s good to have the flexibility to consult others for best practices and apply what you have learned.
In the initial application process it received submissions from 100 companies and chose CytoVas for its first investment. CytoVas has begun enrollment for a proof-of-concept trial for its lead diagnostic — a blood test to identify people at risk for cardiovascular events even though they may not have any symptoms. The company is part of the UpStart program – the University of Pennsylvania’s Center for Technology Transfer.
It is devising a strategy to increase donor engagement to smooth out the peaks and valleys and predict with some accuracy when it should do new rounds of investment to multiply the value of each donor dollar. It shouldn’t be surprising that they’ve been re-evaluating their strategy, Tonkens explains. Sister foundations advised them before they started that it’s good to have the flexibility to consult with others for best practices and apply what you learn. The Cystic Fibrosis Foundation has really pioneered venture philanthropy, led by Robert Beall as the driving force behind it.
Tonkens said it is looking for donations ranging from $100,000 to $1 million. This time there will be a narrower focus for accelerator companies in which it will invest donor funds. A longterm investing goal is to reinvest returns the accelerator gets from these companies to invest in more companies.
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Of all the medical advancements to improve outcomes for various cardiac conditions, heart failure remains the depressing exception. In the 40 some years since he trained as a cardiologist, Tonkens notes that defibrillators are almost as pervasive in public places as fire extinguishers, but the death rate for heart failure has barely budged.
Among the areas the accelerator is considering for investments are treatments for reperfusion injuries, using big data to not only for personal medicine to determine the best treatment for each individual but also for taking environmental factors into consideration.
“In the long run we’re vetting companies to find the true game changers.”
