The Biomedical Catalyst is a government funding initiative jointly run at arms length by Innovate UK and the Medical Research Council (MRC) and designed, in the words of Prime Minister David Cameron, to get “the best ideas through the proof of concept stage, so we can get them into clinical development and get our entrepreneurs selling them around the world.” The scheme is generally considered hugely useful to UK biotech, with over £100 million in grant funding awarded to the industry to date, at a time when it has been difficult to attract private risk capital to the sector. Innovate UK and MRC are now formally reviewing the Biomedical Catalyst in association with Ipsos MORI.
In recent weeks we hosted a guest blog by Sam Williams, CEO of Modern Biosciences, about how his company has benefited from the scheme. Here, Davidson Ateh, CEO of BioMoti, relays their Biomedical Catalyst experience.
BioMoti is an early stage biotech with an exciting technology platform to focus anti-cancer drugs at tumour sites by targeting a receptor-ligand system hijacked by cancer cells to promote proliferation, metastasis and immune-escape. The potential is for us to significantly increase the efficacy of cancer drugs whilst reducing their side effects and turn a tumour’s ‘trick-of-the-trade’ against it. The core of our Oncojan™ technology platform was developed from a single observation during an experiment I ran as a post-doctoral researcher at Queen Mary University of London.
Non-dilutive grant funding from research councils, charities, university and major pharma co-sponsored studies all contributed to excellent proof-of-concept on our lead ovarian cancer candidate. BioMoti is ready for prime time, but we have been quick to discover just how hard it is to attract private risk capital into an early stage biotech.
Our Biomedical Catalyst experience
Against the backdrop of the economic downturn, we were over the moon when the Biomedical Catalyst, a scheme we lobbied hard for, as did the BIA, was announced. We successfully applied for a £150,000 feasibility grant, which enabled us to quickly complete a matched business angel seed round. We moved into The QMB Innovation Centre, recruited our first staff members and made a commercial case including further confirmatory studies, a development plan and a comprehensive and promising market research report.
We now need £10 million to take this lead candidate to phase 2 clinical trials, a significant value inflexion point and potential exit point. However, we have continued to find it extremely difficult to attract funding from large investors or pharma partners (although there is always interest in the data and novel biology). For this reason, in 2014, we focussed on securing next stage Biomedical Catalyst funding, an early stage grant, that can be used for formal preclinical development including cGMP and GLP toxicology.
Our application to the Round 4 call for just under £4 million (with private investment to contribute 40% of that) scored well (72.6%) at the full stage expert review but unfortunately just missed out at the major awards committee. Armed with useful feedback and an invitation to resubmit, we worked very hard to put in a much-improved application having assembled further data, a great project management team and potential matched investment from a US source. Again we scored very highly (80.4%) at the full stage expert review and thought we had done everything within our power at interview, but we were disappointed to miss out again. In my view the feedback was tepid, thanking us for addressing earlier concerns and expressing what we viewed as minor issues.
We have lost the patience of our existing small investors, who, understandably, will only re-invest as part of a larger series A round and it continues to be difficult to engage investors without the carrot of significant grant funding. To preserve cash, we returned BioMoti to virtual status including the unpleasant task of terminating good staff. We are seriously considering a less profitable merger with a better-established player or re-locating to the US.
Despite our experiences I am a fervent supporter of the Biomedical Catalyst and the benefits it is bringing to our sector and ultimately to patients. The independent review of the scheme provides an ideal opportunity for us all to consider how the Biomedical Catalyst might be refined. I personally think that rather than supporting more established clinical stage companies, the scheme ought to focus government support to the earliest stages of biotech, right at the ‘valley of death’. With the review in mind, I’ve thought about three key changes I would recommend to achieve that aim, which I will set out in my next guest post.
Thursday’s post will conclude with Davidson’s personal views on how the Biomedical Catalyst scheme could be re-targeted to specifically support early-stage biotechs. (Sign up below to follow the blog and receive alerts for new posts).
UPDATE: Read Part Two of Davidson’s blog here