In a Down Market for Biotech, Microbiome Therapeutics Could be a Safe Bet for Investors
By now everyone working in life sciences knows that the biotech boom for investors has peaked, and that 2022 and beyond may prove to be a tough year for emerging biotech companies trying to get on the IPO ladder to push new and novel therapies.
Otella Stampacchia of Omega Funds told Ben Fidler of Biopharma Dive, “We need…great teams to develop great products for patients, not to just push out companies. Across the board, it’s time to retrench a little bit and reflect” (2022). While investors may be pessimistic for the time being, the consultants at BayBridge are optimistic about microbiome therapeutics becoming increasingly appealing in a down market.
There are several reasons why investors may see microbiome research as a viable investment during this time. Firstly, these therapies have the potential to get to commercial stages without as much safety scrutiny. Duncan Peyton, CEO of Leeds, UK-based 4D Pharma said that the advantage of a high safety profile can accelerate the timeline for generating clinical proof of data, meaning regulators may allow developers to skip Phase I safety and forge ahead into target populations (DePalma, 2022). In a downturn market, this advantage could mean the difference between getting to IPO or not. Jordan Saxe, the head of healthcare listings at Nasdaq anticipates the companies this year that will have a better chance at going public will be “coming out with milestones that are 12 to 18 months out…Investors want to see an opportunity for an inflection point” (Fidler, 2022).
Another boost to the success of microbiome therapeutics is the increased capabilities that AI and data processing platforms have given to mining microbiome data. This tech helps dramatically speed up the time it takes for companies to figure out where therapeutic potential lies within the microbiome. For example, 4D’s LBP discovery platform MicroRx focuses on how a bacterial strain functions, and researchers have found that a component in a strain of bacteria called M. massiliensis enhances the production of cytokines in CD8+ cells (DePalma, 2022). This and findings from other strains of bacteria show the synergistic benefit LBPs could have when used in conjunction with other medicines for cancer, CNS, respiratory, autoimmune, and gastrointestinal diseases.
Lastly, microbiome therapeutics are desirable right now because of their ease of administration, which is safer, more affordable, and more convenient for patients. A major challenge researchers in the biopharma industry are looking to overcome is the difficulty in administering medicines conveniently and comfortably for patients. One desirable characteristic of many microbiome therapeutics is that they can be given orally with pH-sensitive release capsules that only distribute the medicine when it has moved into a particular part of the intestinal tract. This type of administration requires little to no observation or monitoring by medical practitioners.
While private investment is steady for emerging cell and gene therapy companies in preclinical stages, it will be interesting to see if the safety, stability, and increasingly positive data generated by clinical stage microbiome therapeutics companies can advance a few more to public markets, and perhaps accelerate those in preclinical stages to secure further funding rounds, inching them closer to an IPO in a down market.
If you’re interested in learning more about BayBridge’s Talent Management approach to executive search, please reach out today at www.Baybr.com or on LinkedIn @BayBridge.
References
DePalma, A. (1 February 2022). Bacteria as therapeutics. Genetic Engineering and Biotechnology News. https://www.genengnews.com/topics/bioprocessing/bacteria-as-therapeutics/
Fidler, B. (7 February 2022). ‘The music stopped.’ Biotech rout leaves drug startups grounded as demand slumps for IPOs. Biopharma Dive. https://www.biopharmadive.com/news/biotech-ipo-venture-startup-investors-market-downturn/618205/
