Author: Sam Goldsmith PhD, Senior Commercialisation of Research Manager, CGT Catapult.
The Valley of Death is a well-known and steep sided precipice over which the academic community are asked to traverse when translating novel therapeutic concepts into the clinic. However, given its name, one should not be surprised to learn that the attrition rate of potential medicines passing through this phase of development is high. The Valley of Death represents a timepoint in the life cycle of a new treatment during which it has the greatest amount of risk, but also represents a significant opportunity, both with respect to discovering a way to treat unmet medical need but also in commercial value creation. Convincing investors to buy into the opportunity during the early part of the journey is no mean feat, especially when there are plenty of competing projects attempting to do the same thing. Standing out from the crowd as a viable and robust investible opportunity takes careful preparation. Below are some of the key areas to focus on when getting ready for those early investor interactions.
There are two ways to stand out from the crowd, ‘de-risking’ the technology and ‘differentiating’ your idea. During early investor interactions, sometimes too much time and emphasis is put on creating a business plan and dealing with the potential operational needs of a company. A sophisticated investor will cover these aspects and more, once you have ’got them on the hook’. Universities and academic groups should instead concentrate efforts on attracting the investor in the first place, by demonstrating they have a truly differentiated product idea, that can be or has been appropriately de-risked. A key objective in early meetings should therefore be to help any potential investor understand the benefit and risk balance. However, the investment risk should not be unreasonably play downed. Clear identification of the main scientific risks, transparent sharing of your expert opinions regarding the risk, along with a plan for how and when they can be discharge, is key to building trust with an investor. If the underlying scientific discovery is truly innovative and has high commercial potential, you can expect the investor to focus most of their interest in the scientific unknowns and how to manage them.
Risk mitigation should focus on five main areas; safety, ‘will it work’, manufacturing, regulation and Intellectual Property/Freedom to Operate (IP/FTO). Academic research focuses (quite rightly) on the demonstration of efficacy and mechanism of action. Safety data can be a much lower priority as it has less publication potential, however, in the translational space demonstrating your product is safe at the proposed dose level, is essential. Fortunately for the advanced therapy industry regulatory authorities have published clear guidelines and legislation discussing how to use a ‘Risk-based approach’ to develop Advanced Therapy Medicinal Products (ATMP) (EMA/CAT/CPWP/686637/2011). Using these guidelines and applying them to the non-clinical phase of development will help build up a strategy of how to create evidence to suggest the product will be safe when administered to humans. Examples of areas to focus on at the academic phase include, toxicity (the PK/PD relationship), immunogenicity, biodistribution, route of administration and dose range. Gathering data on these areas will demonstrate to prospective investors that the product has been tested in a way that generates data relevant to support clinical translation and that certain clinical aspects of the delivery of the product have been considered. Even if these experiments cannot be conducted due to current financial limitations, developing a strategy and plan of experiments that need to be performed will build great credibility with investors.
Manufacturing remains one of the key challenges in the ATMP field (Ten Ham et al 2018). Consequently, de-risking this part of technology development should be a key area of focus. Quite obviously, at this early stage of development there will be very limited data to show your ‘active ingredient’ can be made repeatedly to exacting quality standards. However, if the product cannot be manufactured at a scale suitable for humans use it is less likely to attract commercial investment. Many academic groups that research fundamental biology lack access to equipment and the expertise necessary to demonstrate if and how a manufacturing process could be scaled. Nevertheless, understanding the dose level likely to be required for clinical use is a good first step to understanding the increase in scale that will be needed for early clinical experimentation. For products that use novel manufacturing technologies or methodologies, performing a gap analysis on the current process, in order to identify critical risks and develop mitigation strategies is a good and cost effective early strategy that will demonstrate to investors that you are thinking holistically about medicines development (Laurence et al 2021). This will also help define the scale of investment risk within the proposed project. For products that use existing technologies, such as AAV or Lentivirus, there are a number of UK based contract development and manufacturing organisations (CDMOs) that can manufacture clinical grade material at scale. Approaching these organisations for indicative quotes and time scales for the manufacture of material for toxicology studies and early clinical trials will further describe the proposal and builds credibility with investors. Finally, the industry is seeing a consistent shift towards allogeneic therapies(Caldwell et al 2021). If your investment proposal relies on an autologous supply chain then developing a strategy for following up with an allogeneic platform version could be beneficial. Even if it is not possible to de-risk the manufacturing challenges through actual experimentation, paper based analysis such as those described above can be used to more accurately describe the magnitude of risk and challenge that remains associated with manufacture at scale. It is important to understand these risks for credibility reasons. However, the knowledge built up will also support the creation of more accurate develop plans and, at a later stage, inform negotiations with investors.
Regulatory authorities are the ultimate gateway to introducing medicines into humans and the regulatory and legislative frameworks can be difficult to unpick. Early engagement with these regulators is a key risk mitigation strategy to avoiding a mismatch between your development plan and their expectations of what data will be available. In the UK the Medicines and Healthcare products Regulatory Agency (MHRA) offers an Innovation Office (IO) meeting service. This is the first step in opening a dialogue with the regulatory body and can be a valuable opportunity to seek clarity on key areas of therapy development. Both the FDA and EMA (US and European version of the MHRA respectively) offer similar services. Recently the MHRA introduced the Innovative Licensing and Access Pathway (ILAP) to accelerate and streamline regulatory development of novel therapeutics including ATMPs and should be considered in addition to IO meetings. Demonstration of early engagement with regulators is another tick in the box for risk mitigation.
The final area of focus for risk mitigation is securing IP protection and FTO. These areas are often confused. The concept of securing a patent for your idea is generally well understood, although good advice in this field is crucial, since patent crafting is highly skilled. Freedom to operate is often less well understood. Usually, 3rd party suppliers distribute their products for ‘research purposes’, meaning you can easily acquire things like cells, specialist reagents and other starting materials for R&D. However, moving to commercial production will take the project outside of common material transfer agreements and research use licenses. Knowing where you need to renegotiate licenses will help support discussions with investors. Having a good relationship with the university technology transfer office (TTO) is important for the robust identification and management of patents and licenses. Working with the TTO to develop a patenting strategy for your own work is crucial to building value into the product. Going through this process will also help to highlight close or competing technologies in patent literature, that may not be in the academic or commercial literature. A complete FTO search is unlikely to be possible at the academic stage of development. Nevertheless, listing the likely commercial licenses that will be needed is a prudent risk mitigation strategy to employ e.g. AAV serotypes that are on patent and the commercial rights holder. Not being able to access the rights to enabling technologies has the potential to kill a project before it has even started.
All this talk of risk and risk mitigation strategies can be uninspiring, so it should always come after you have clearly defined and communicated the opportunity (i.e. the ‘why should an investor be interested bit’). Specifically, how the idea will address the unmet need, how solid the scientific data is to support the concepts and how differentiated the new idea is from competitor technologies. A competitor landscape analysis should focus on both academic and commercial competitors. Detailing how differentiated the scientific mechanism of action is and how this new mechanism will lead to improved efficacy (and/or safety) in treating an unmet need. Stratification of the patient population, i.e. which groups of patients within the disease area your treatment will be developed in 1st, and size of the market segments, should also be considered. Communicating to investors how large the opportunity is and how different you are from anything else will make the overall proposal a significantly more investible opportunity.
Risk and opportunity are two sides of the same coin and should be the focus of translational activities to prevent falling into the Valley of Death. Determining where to start with regards to risk mitigation can be tricky. In the Commercialisation of Research group at the Cell and Gene Therapy Catapult we help academic groups to attract investment and start by asking all collaborators to complete a Target Product Profile (TPP). Although a high-level document, it is the starting point that allows an academic group to easily identify gaps in their knowledge and begin to develop a risk mitigation strategy. Maintaining the TPP as a live document and updating it throughout product development as new data emerges helps to keep the development plan aligned with the project goals. Combining the TPP with a risk register also allows groups to clearly define risk mitigation strategies and can be easily passed to investors. Finally, truly differentiated products that represent a step change in the field are the most attractive opportunity for investment. Clear articulation of this should be front and center of any pitch to investors.
Focusing on risk and opportunity is not natural habitat for seasoned university academics. However, when traversing the valley of death, one needs to become comfortable with the uncomfortable.
Ten Ham; Challenges is Advanced Therapy Medicinal Product Development: A Survey among Companies in Europe. Molecular Therapy Methods & Clinical Development, 2018 Oct 11;11:121-130
Lawrence; Process analysis of pluripotent stem cell differentiation to megakaryocytes to make platelets applying European GMP. NPJ Regenerative Medicine, 2021 May 26;6(1):27
Caldwell; Allogeneic CAR Cell Therapy-More Than a Pipe Dream. Frontiers in Immunology, 2021 Jan 8;11:618427