Session report: Updates on funds & accelerators

Session report: Updates on funds & accelerators

  • 26/08/2021

Investment climate for companies active in AMR was rather weak for a long time. However, over the past year, situation has slightly improved and optimism is back.

The 5th AMR Conference session on 25 August focused on the current situation of the investment climate and moderator Marc Gitzinger, himself being CEO of Swiss antibiotics developer BioVersys and having raised a significant amount of capital in the past 12 months, asked the panelists if the glas is half-empty or half-full. Overall, most of the stakeholders emphasized that there is a momentum of optimism. “The level of investment is rising, interest in the field has improved and the overall trend is quite good. Particularly vaccines have found investments”, said Aleks Engel from Novo Holdings REPAIR Impact Fund. For example, one of the fund’s portfolio companies Minervax attracted a €47m series B financing round in Dec 2020, which is just one example of 22 vaccine companies raising venture capital last year. Overall, Engel also underlined that there is a lot of innovation taking place in the AMR field: “When we started our fund three years ago, we were embarrassed to see how many innovative companies there are, many more than we could invest in with our fund.” In the meantime, many of them have developed further. “Some new modalities (LBT, RNAi, phages) are only now beginning to deliver sufficiently strong data to be ‘investment grade’”, he said and underlined that although further improvement is needed, particularly with regard to policy changes and pull incentives, the overall climate is positive. (read an interview with Ales Engel here)

David Luci, President and CEO of Acurx Pharmaceuticals Inc shared his experience of an recent IPO in the field. He co-founded the company 2017 to bring a new class of antibiotics to the market. To date it has raised over US$30m, including the US$17.25m IPO in June 2021 which was led by 8 to 10 institutional investors. During the session, Luci explained the companies motivation to go for this step and provided insights into the processes and strategies behind. “Our goal was to raise enough capital to bring our lead candidate through a phase IIb clinical trial based on our phase IIa data”, he said. According to him with the IPO they could offer investors a non-dilutive deal whereas other strategies such as reverse mergers or VC funding would have been less attractive. He made clear that COVID-19 brought back infectious diseases back in the spotlight and that institutional investors now are less reluctant to invest in the AMR sector as, for instance, governmental initiatives such as the UK pull incentive and the PASTEUR Act discussions in the US and further private-driven investments are gaining momentum as well. He also believes that the decades of ice-cold investment climate is warming up for the benefits of stakeholders and patients.

AMR Action Fund ready for first investments until end of 2021
As agreed by the panelists, another big news for the field was the launch of the AMR Action Fund last year, backed by mainly large pharma companies. The concept of the fund has been developed in collaboration with the World Health Organization, the European Investment Bank, and the Wellcome Trust. It aims to overcome key technical and funding barriers of late-stage antibiotic development and expects to invest more than US$1bn in smaller biotech companies to support clinical development of novel antibiotic, bringing at least 2-4 candidates to market until 2030. During the conference, CEO Henry Skinner announced to now have an investment team in place in Boston, opening a European dependance soon and being ready now to receive applications from clinical stage companies who are dealing with phase I to III clinical trials and targeting one of the WHO-and CDC-listed multi-resistant pathogens. “The sweet spot would be those, being at the end of phase I, and addressing a real patient need”, Skinner said. According to him, the fund is open to all modalities and approaches and will examine potential products patient-centrically. First investments will be announced by the end of 2021. Furthermore, Skinner made clear that the fund’s goal is also to attract further investors to the field. “We have to convince others to join us. We are definitely not the only solution for the space, but must lay the groundwork for further capital and more classical investors to come and bridge them in.” Overall, Skinner also sees the climate for AMR companies improving and that COVID-19 has given the field some opportunity. “It has certainly opened up eyes with regard to the costs that a global pandemic causes to societies and also the potential that can arise from innovation, for instance in the vaccine space.” He also underlined that being in contact with other investors he sees a rising interest in looking into the field, but it’s now the challenge to turn this into further investment. “The trend is looking quite good and I hope that the AMR Action Fund is able to act as a catalyst for this”, Skinner emphasized during the panel. During the discussion, it was made clear that all stakeholders are laying much hope into the pull incentives to be become reality soon, so that capital markets can even further improve. However, they also agreed that with the current state of activities in place at least some of the innovation can make it into the market. “Even in a non-subscription model world we will be able to advance, maybe not as many as we wish but some of them”, Aleks Engel said and added: “But then of course, one of those needs to be a blockbuster.” Panelists were also saying that this even might be happening if no significant pull incentive is coming. Skinner: “It’s not impossible, that’s true, but of course challenges exist. We will need meaningful drugs that address a real market need. But we also need to make clear to policy makers how important their role is to reinvigorate the space so that – in the very long-term – financial instruments such as the AMR Action Fund or public funding such as CARB-X are not necessary any more.”

New European start-up incubator launched in Germany and Switzerland
As another cornerstone in the AMR field, accelerators and public-private partnerhops play a key role to broaden the early pipeline of AMR innovation. For this reason, those stakeholders were invited to take part in the second part of the session. As one of the major news of the day, the initiative INCATE (INCubator for Antibacterial Therapies in Europe) was officially launched aiming at particularly boosting the early pipeline and spin-offs in the field. According to Douglas Häggström, community manager for INCATE at University of Basel in Switzerland, partners from the academic, industrial and public sectors are working together to accomplish this task. The academic founding members include the German Center for Infection Research (DZIF), the research association InfectControl in Germany, the Swiss National Centre of Competence in Research AntiResist and the University of Basel. Together with four pharma companies (Boehringer Ingelheim, Roche, Shionogi and a fourth one to be announced soon), they want to ensure that the pipeline of new antibiotics is filled and strengthened. Expert advice, building of a community supporting ventures’ development and targeted funding are the three tools with which INCATE aims to achieve this goal. “Besides expert advice and mentoring, we will offer a first funding of 10,000 Euros in the first stage, but will provide up to 250,000 Euros in the second stage”, Häggström said. A first round of application will be started now in autumn, and first selected candidates will be announced by the end of 2021.

Small corporate mentoring program on a succesfull road
Another still quite recent activity is the AiCubator program launched by German SME company Aicuris last year. Program manager Igor Orshanskiy highlighted during the conference that know-how and knowledge are particularly important to share in the early phases of AMR innovation. That’s the reason why the “AiCubator” program is also looking for early candidates being the next generation of new antibiotics. From around 20 applications, three projects were selected at the beginning of 2021: US company Prokaryotics Inc, an academic group from the University of Duisburg-Essen and a joint team from Swiss SME Selmod and German Technical University in Berlin. So far, Orshanskiy draws a positive initial assessment of the in-house mentoring program. “We can provide very practical scientific advice – for example in chemistry or toxicology – and have the advantage of unbureaucratically providing resources for specific tasks,” he says. In this way, critical milestones could be achieved and additional funding or venture capital could be raised. The company intends to oversee a total of nine such projects over the long term. The next round of tenders will start in autumn – then with the aim of becoming even more international. “We are interested in the scientifically best program – no matter where in the world it is located,” Orshanskiy emphasizes.

Cross-linking of large accelerators will be key

The large publicly funded accelerators CARB-X and the IMI AMR Accelerator also provided insights into their current work and status. Whereas CARB-X looked back on its first five years with more than  US$343m invested in more than 90 projects, and now aiming for a next funding support from the US government, some European activities are gaining momentum. Only recently in July, another new consortium of 30 partners from 13 countries has officially launched as a new IMI AMR accelerator project. The 7-year, €185m project called UNITE4TB, aims to improve the clinical evaluation of combinations of existing and novel drugs, with the goal of developing new and highly active TB treatment regimens for drug-resistant and -sensitive TB. Being the largest public-private collaboration on TB drug development in Europe, it is also backed by the German government, among others, who provides €25m Euros to the German partners. (see press release here)

During the conference, the UK-based Infection Innovation Consortium (iiCON) was presented by its founding Director Janet Hemingway. Its initial goals are to develop, validate and operate commercial open access platforms with industry to improve product development pathways for IDTs, while acting as a catalyst for economic regional growth in infection research and development in the North West of England. iiCON is led by LSTM, its partners are Liverpool University Hospitals NHS Foundation Trust, Infex Therapeutics (formerly known as AMR Centre),  Unilever and the University of Liverpool. As Hemingway underlined, COVID-19 had a huge impact of the establishment of the consortium as it provided much more funding than initially thought. “We received funding in mid-2020 as COVID hit, so we were able to rapidly pivot some of our research platforms to handling COVID instead of only focusing on AMR. At application, we had anticipated that we would leverage the £18.6m of government funding up to around £120m over five years. In reality, now we leverage up to £178m in six months”, she said. 

Erin Duffy from CARB-X stressed, that in the future cross-linking the different initiatives will be key to further accelerate progress in the field. “We see particular potential in co-build capability science with the IMI AMR Accerlators COMBINE project”, she said in view of the challenges related to the development of improved animal models of infection, the assessment of key safety risks, the evaluation of antigenic variability risks or the access to novel adjuvants. “Early investment will be wasted if there is no link on the way to clinical development”, she summarized.