Angel Syndicates and Institutional Investors assume and manage investment risks for drug development companies.
Origent helps these venture capital investors identify the companies who are most likely to succeed in their next clinical trials.
Supplying Lifeblood to the Drug Development Industry
Drug development is a capital intensive business, and the risks are high. Few industries require such massive upfront capital investment before revenue can be generated. While many large pharmaceutical companies have the cash necessary to make such investments themselves, most biotechnology companies must turn to third party capital sources to finance various stages of their drug development activities. From angel syndicates to large institutional investors to corporate venture capital, these third party investors are a common source of capital to support early clinical trials, generally in Phases 1, Phase 2, and 2B, and occasionally for Phase 3. Investments often range from a few million dollars to upwards of several tens of millions of dollars.
But as the cost of development has risen, so have the consequences of failure. This increased risk profile means investors must be more discerning when choosing which biotech therapies and companies to support. Often these investment decisions must be made based on the data from early clinical trials—trials that lack the adequate placebo control arms necessary to measure efficacy.
Additionally, investors recognize the advantages of having better early information, since the opportunity to invest earlier in a company’s life cycle can increase the investor’s ROI. This is one of many reasons why the most successful venture institutions conduct extensive due diligence before investing, to question and challenge the acquisition target’s reported results with their own analyses.
How We Help
Origent helps biotech investors identify and select the right companies for investment. Using our patient-level disease models, Origent can:
- Measure drug efficacy using virtual control arms. When an early stage trial lacks a placebo arm, efficacy information is often speculative and always difficult to quantify. Origent develops personalized progression paths to show how the symptoms of each patient in the trial likely would have progressed without the drug. By comparing each patient to their personalized control, we can estimate the treatment effect of the drug without conducting a placebo-controlled study.
- Support due diligence. Virtual control arm analyses can be used to estimate the overall treatment effect of a drug when faced with sparse data. This allows the acquirer to compare multiple biotech companies against a common baseline, and to improve the fund’s ROI by selecting only the most promising therapies for investment.
- Expand your investment window earlier into the drug development life cycle. In the last several years, venture capital funds have withdrawn somewhat from early stage drug development opportunities. In the absence of competition, the remaining investors are able to command more favorable deal terms. Origent’s unique data and analyses permit investors to evaluate companies earlier in their life cycle, before investment becomes more costly.
Applications for Investors
Origent has developed several applications for reducing the risks of drug development using predictive models and individual patient-level dynamics. Examples of some applications of interest to investors include:
Origent has active development in many disease areas, including:
Have Questions?Reach out to us and we’re happy to discuss in detail how we can help you improve returns and reduce investment risks.
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