Academics still haven’t cracked the molecular code to understand what, on a basic science level, causes mental illness like schizophrenia.
This is the core reason why investors shy from investing in this widespread condition, a panel of venture capitalists said at this week’s World Medical Innovation Forum in Boston. It’s not because the target market, while enormous, consists largely of uninsured, low-to-no income patients. Of course not.
“Everyone has enormous compassion in that area, but by and large, we don’t really understand the mechanism,” said Corey Goodman, a managing partner at VenBio.
Only $900 million has been invested by VCs into psychiatric drug development from 2004 to 2013, in a recent whitepaper from BIO. This figure’s particularly stark when placed in comparison with the $9.1 billion invested in oncology – and the $4.6 billion that went into neurology.
“The imbalance doesn’t surprise me at all,” said Jean-François Formela, a partner at Atlas Venture. He explained: While it may be getting simpler to treat a severe disease if it’s monogenic, complex mental illness like schizophrenia have multigenic causes – to say nothing of developmental and environmental factors. There are just too many unknowns.
“That’s going to take a long time for the academic community to figure out,” Formela said.
Yet mental illness is inordinately widespread – and expensive. Schizophrenia alone impacts 1.2 percent of Americans – about 3.2 million people. And it’s just a massive driver of costs in the system. There’s a dearth of info on the systemic costs of schizophrenia, but a widely cited 2002 figure says it cost $62.7 billion at the time. Whether that cost has increased or decreased, there hasn’t been much in the way of new drug development since then. And how? $900 million to all of psychiatry is a pittance over a decade.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
The knowledge base and the tools to augment therapies are taking off now, said Doug Cole, a general partner at Flagship Ventures. And gene sequencing will be key in bringing advances in psychiatric therapy up to speed.
“There’s been a lot of really good human genetics in the last few years,” Goodman said. “That’s where some of the breakthroughs are going to happen.”
