Biotech incubators are the quinoa of the life sciences.
Five-or-so years ago, they were all the rage. And while we still value what they do (economically/nutritionally), the widespread enthusiasm has waned. They became a regular part of the biopharma menu, not a ‘special of the day.’
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But in 2017, there is cause to look again. Biotech incubators are evolving and maturing. New models continue to crop up (accelerators, aggregators, commercialization spaces) and existing ones are being refined.
As it happens, two notable updates came on Thursday.
The first was from RM Global Partners, which announced the creation of a new dedicated VC fund for the FutuRx biotech incubator.
FutuRx was established five years ago through a collaboration between OrbiMed Israeli Partners, Johnson & Johnson Innovation, Takeda Ventures, and the Israel Innovation Authority. Its stated aim is to translate local discoveries into the proof-of-concept phase, supporting them with a physical space, mentoring, networking, and more.
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It seems private funding may also be on the cards, building on the early research funding supplied by the Israeli government. RM Global’s new $30 million RMGP Biopharma Fund will preferentially invest in promising startups emerging from the FutuRx portfolio.
FutuRx CEO Einat Zisman believes it will give the incubator an edge.
“RMG’s establishment of this fund is an important strategic milestone for FutuRx,” he said in a prepared statement. “The fact that the Fund will provide a dedicated and unique source of capital to the incubator’s portfolio companies will enhance FutuRx’s competitive advantage as a best-in-class platform for early-stage drug development.”
RM Global anticipates raising a second fund in the near future.
Meanwhile, former Sarepta Therapeutics CEO Chris Garabedian is joining the game, launching a biotech aggregator with a fresh $25 million dollar Series A from Perceptive Advisors.
Dubbed Xontogeny, the Boston, Massachusetts-based endeavor will take a sort of “hand-up, hands-off” approach, helping guide and grow its startups without taking the driver’s seat and disenfranchising the original founders.
Via phone, Garabedian explained that very early-stage companies often gravitate towards VCs early on with little to no negotiating power. A sound business plan and funding path are put in place, as the founders hoped, but they lose control of the company and the bulk of their stake.
Xontogeny is positioned as the knowledgeable friend you wish you had when founding a startup. It will take a sizeable chunk of the business – as much as 50 percent, depending on the company – but they’re very much a business partner, Garabedian said.
There is no facility at this point. Instead, he will help guide the companies virtually, while efficiently filling any gaps in expertise — be it scientific, financial or strategic.
“What I’m doing is giving an alternative and a more attractive, investable R&D model to these entrepreneurs,” he said.
When it comes time to raise money, a wider network will be tapped into and Garabedian will go to bat on behalf of the portfolio company. Time will tell as to whether that pays off.
The next question on everyone’s mind: Will quinoa undergo a similar resurgence?
Photo: RomoloTavani, Getty Images