L-R: Stephanie Baum, Karen Griffith Gryga, Stacey Seltzer and David Shaywitz
In a report issued in December 2017, CB Insights found that venture capital investment in cancer startups through Nov. 28 of that year totaled more than $1.4 billion. That’s down from more than $2 billion in 2016, but it still goes to show that it’s a hugely important area for VC funds. Not surprisingly, immunotherapy has grabbed the majority of that funding, according to the report.
With oncology investment such a hot topic, it was also the subject of a panel discussion at MedCity CONVERGE Wednesday, titled “Trends in Oncology Investing,” moderated by Stephanie Baum, MedCity News’ director of special projects. The panelists were Karen Griffith Gryga, chief investment officer of Dreamit Ventures; Stacey Seltzer, a partner at Aisling Capital; and Dr. David Shaywitz, senior partner at Takeda Ventures. CONVERGE took place Wednesday and Thursday in Philadelphia.
Shaywitz said there is almost no interest in so-called “me-too” drugs that are seemingly identical to competitors, also emphasizing the interest in differentiated products that address unmet medical needs. Indeed, he questioned whether it was an example of convergent evolution or simply knockoffs. Oncology offers the highest value rates, he said, but there also seems to be something similar to Moore’s law, whereby it is becoming progressively less efficient to make new medicines. Under Moore’s law, created by computer scientist Gordon Moore in the 1960s, the number of transistors on integrated circuits doubles every two years until it can expand no more due to physical constraints.
Aisling also seeks to ensure that drugs are addressing an unmet need, particularly given the issues around reimbursement and increasingly high price tags for gene and immunotherapies, Seltzer said. “If you have a one-time therapy for a disease, whether it’s a million-dollar of $100,000 treatment, if the disease is fatal, especially in children, people will find a way to make it work,” she said.
Artificial intelligence represents a particularly promising area, Shaywitz said, though he cautioned that the term is used too loosely, and a company whose main selling point is that it has an algorithm does not draw much interest. What matters most, he said, is the same set of metrics one applies to anything else, namely evidence that a product works and is useful.
Indeed, data and creating data sets are an important component of drug development. Companies in Aisling’s portfolio view data sets as differentiators, but foundational databases rapidly accelerate the rate of innovation, Griffith Gryga said, pointing to the example of the Human Genome Project and the thousands of genetic screening tests and therapies in clinical trials that have resulted from it. Under-representation of women and minorities in data sets also makes it important to have diversified data, she added. For instance, a genetic mutation may mean different things for different ethnic groups, Shaywitz said. Loxo Oncology provides another example of why data sets are so important, as its development of the drug larotrectinib depended on testing for hard-to-find NTRK fusions, Seltzer said, adding that it was an “uphill battle” for the company at first because most diagnostics did not routinely look for them. The Food and Drug Administration accepted Loxo’s approval application for larotectinib in May, setting a Nov. 26 action date.
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.
Photo: Alaric DeArment, MedCity News
