With traditional venture capital firms shying away from investments that traditionally sustained the early stages in drug discovery among biotechnology start-up firms, “venture philanthropists” have quietly stepped up to fill the gap, according to an article scheduled for the May 2 issue of Chemical & Engineering News (C&EN) ACS’ weekly newsmagazine.
In the article, C&EN associate editor Lisa Jarvis describes how venture capital firms have shifted away from investment in early-stage drug development, which provides “seed money” for start-up firms to begin work on promising new drugs. Those firms now are putting cash into the later stages of drug development and commercialization, where risks are smaller and marketable products are more likely to result.
The shift in priorities has resulted in emergence of the venture philanthropy movement,in which non-profit organizations, such as the Cystic Fibrosis Foundation, have become an important source of money for early-stage drug discovery. At that stage, academic scientists, entrepreneurs and start-up companies are seeking money for research to validate ideas for new drugs. Jarvis surveys the venture philanthropy landscape, and explains how disease advocacy groups have become major players in the for-profit world of biotech startups.