At this point, everyone with a glimpse into the pandemic or knowledge about the pharma industry knows how expensive (in money and time) that developing a new drug can be. We´ve heard things between U$D 1 billion (for example here) up to the famous study that claimed that it costs something around U$D 2.6 billion.
And if you research a little bit more, you will realize that money is not the only problem!
Developing a new drug takes something around 6-15 years. And there are even studies that show an immense increase in cost per drug developed through the decades:
They even have a name for that… the Eroom´s Law. Yep, you heard it right, is The Moore´s Law spelt backwards.
So, after all this, the obvious titanic cost and the continuously worsening trend… how is it possible to start a biopharma company without external investors?
Well, the short answer is…
that is not easy at all, but we know is possible, because someone has already done it!
Have you heard about Jacob Glanville? or Distributed Bio? Maybe Centivax?
You may remember him from the “Pandemic: How to Prevent an Outbreak” show on Netflix:
The reason he appeared in that show is because the efforts of his company (Distributed Bio previously, acquired by Charles River and his current venture named Centivax) to develop a universal vaccine (more scientifically: a broad spectrum vaccine) against rapidly mutating pathogens like the influenza virus.
Long story short: what they do is to find patches on the surface of the pathogens that do not change even if it has mutated a lot and target the immune response against those patches with some proprietary technology.
This new vaccine technology could allow you to be protected against any influenza strain that has ever emerged… or will emerge in the future.
Even though things are always more complicated in science and a strain resistant to the vaccine may appear from time to time, this kind of technology may end pandemics that have been around us for decades… things like HIV could be (boldly speaking) a thing from the past and we will be a step towards a pathogen-free future for us.
The scientists in Jacob’s company have also endeavoured developing monoclonal antibodies like the one against SARS-Cov-2 (see here).
What I am trying to say here is that he is one of the founding partners and CEO of a biopharma company, and you know the best part? Without using Venture Capital (i.e external private funding).
But, how did he do it?
Let´s start revising his CV!
He is from a Guatemalan family that owns a small hotel where he helped as a child. So, family money is not the answer and certainly not even a previous network on the pharma or biotech world. He went to Berkley for college between 2002-2006 and studied Genetics, Genomics and Development where he has learned about Population Genomics and Bioinformatics.
After that, he started working at Pfizer in 2008 as a Research Computational Biologist, more precisely in antibody discovery and (my guess) in Phage Display libraries thanks to New Generation DNA Sequencing technologies. In 2012 he already was principal scientist at Pfizer (with just a BS degree, he even said that was lucky to achieve it) but decided to leave because he didn´t saw opportunities to grow more inside the company.
That is when he saw this untapped opportunity!
He knew there was a demand for immuno-informatics services because big pharma companies wanted to hire him and instead of working for them as an employee, he started his own company, Distributed Bio, with a couple of folks that he knew at Pfizer.
That left them with just one problem, how were they supposed to get all the computational power they needed to provide the Bioinformatical services?
Just about on time, the Amazon Cloud service went online and for the ones who do not know Amazon rents online computing power on demand since 2006.
In that way, they didn´t even need to acquire high performing computers, they just rented what they needed from the Amazon Cloud. This is what he calls the first tier of his company, the bioinformatical services for pharma companies.
With the profits of the first tier and all the data they got from other companies to fine tune their bioinformatics algorithms, they invested in lab equipment and human resources to also provide wet lab antibody discovery services, that was the second tier of his entrepreneurial ventures.
The thing with biotech services is that there are just something like 400 potential companies that could be their clients, a really good business can be built around that but it is never going to be a huge company.
That is when the third tier of his plan appears, where now that they got all this data to train their algorithms, they have a wet lab antibody discovery pipeline on point and some cashflow to spend… they decided to start the universal flu vaccine project.
The problem upon them was that you do not have much of a way between vaccine idea and animal testing. And the closest animal to humans is…. pigs (mice don´t even get infected with the flu). Maybe you have never experimented with big animals, but what this entails is months or years of experimentation, logistics problems because you need a big, super clean, super controlled place to have them, and so on.
With that in mind, they tried to get VCs to invest in their universal flu vaccine project, so they could get the animal data they needed…
but the efforts were unsuccessful. They were facing the famous “Valley of death” that a lot of biotech companies face, the phase where you got some data, a good idea….
but it is still too risky for investors and you can´t get the next data point.
In Jake´s words:
“I think this is gonna involve some iterative cycle, that´s the other problem with in vivo work….it does not work perfect the first time, you have to iterate. If each one is a big animal study and is gonna take you a year and a half to get another grant… to cycle through you are talking about a decade of work to getting something useful.”Jacob Glanville
After all of this, they got creative and found a way to solve it with little money, so little that the company could afford it. They decided to do it in Guatemala (there is a pork industry there), contacted a professor from the University of San Carlos (with whom he had a previous collaboration), used some land from Jake´s father, Jake´s brother built the facility and recruited a bunch of graduates from the University of San Francisco to go to Guatemala and do the experiments.
Fortunately, the data came out promising and allow them to get a Bill and Melinda Gates Foundation funding, enough to carry the program through the next years without being worried about money.
As an end note, for the amazing and inspiring story of Jake, I truly recommend to you this interview where he talks about this stuff. It has less than 50 views and it´s pure gold:
Click here to get redirected to a YouTube video where he was interviewed. It’s splendid!
For further reading that you may do, check the papers below. Both papers delve deeper into the humongous money supply and time required to develop drugs. Your perspective might change!
This article was fully written by Juan Ignacio Da Ros and minimally edited by Thanos Tsagkadouras