BioBuzz by Workforce Genetics
These Non-traditional Life Science Funding Sources Can Help Beat Back the Bear Market Blues
Companies just looking to get their start in the biotech and life sciences field often have limited funds and lots of time ahead of them before they get to FDA approval. And as the biotech industry faces what could be a long bear market due to inflation and rising interest rates, the costs of business from research to manufacturing have increased significantly. Now more than ever funding can be hard to come by, especially for those just getting started.
During the recent National Cancer Institute’s Technology Showcase, the panel “Non-traditional and Foundation Sources of Support” discussed options companies have for funding aside from traditional investors.
Here are three organizations offering alternative forms of funding and support that you can consider tapping into:
National Foundation for Cancer Research
Among the panelists was Sujuan Ba, Ph.D., President and CEO of the National Foundation for Cancer Research. She shared the foundation’s commitment to funding scientists and early-stage companies with the money they need to continue their work in oncology.
“I can say with confidence after being with a foundation for almost 24 years that NFCR has distinguished itself in the cancer research community to provide funding for high risk, high impact, high reward programs, long-term funding, and transformative funding,” Ba said.
Usually, the foundation funds scientists who need more money to continue their research before they can present to larger organizations such as the NCI or NIH. Ba noted that as a cancer research foundation, it’s important to support early-stage innovations that could help patients but might never see the light of day due to the grueling regulatory processes.
The foundation has many different programs for applicants, one of which is the AIM-HI Accelerator Fund which funds start-up oncology companies. Additionally, AIM-HI helps get new companies off the ground logistically.
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“Not only can we help the companies with the funding, we also help them to build a very critically needed advisor network ecosystem,” Ba said. These advisors can also become investors in the future.
NFCR’s experience in the industry allows them to fully analyze their applicants to ensure they are promising before going through with funding. Their pitching and investment committees provide a second and third pair of eyes for each proposal.
Another unique aspect of NFCR is its commitment to helping companies at the very beginning of their journeys.
“A lot of other organizations, even other charities… normally work with the project or company after they already get into phase one or phase two, and they help them to do the clinical trials,” Ba said. “And we believe that that’s also very good. But really there is a dire need for the preclinical stage and that’s where we play an important role.”
To learn more about the National Cancer Research Foundation, visit their website.
Bret Schreiber, the Vice President of Life Sciences and Technology at Fulton Bank, shared how he opened a life sciences division at an otherwise very traditional bank. Schreiber previously ran the Office of Bio and Health Life Sciences at the Maryland Department of Commerce, where he learned what the tell-tale signs of success were for new life sciences companies in Maryland. He brought that expertise to Fulton to start their new branch.
“Now these companies have someone who can speak their language and understand where they need to go to scale and grow… and can help make those connections for the company,” Schreiber explained, “And then someone who’s been with banking so they can dot the i’s and cross the t’s from a banking relationship.”
Currently, the branch has 150 companies in its portfolio with more on the waitlist. Fulton aims to fund companies that might be overlooked by traditional banks due to their lack of revenue. To accomplish this, they’ve created a new credit policy with new “alternative measures for credit worthiness” for these companies which focuses on the company’s accomplishments such as receiving TEDCO or Abel Foundation funding.
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Fulton also works with companies to secure funding from their partnered associations, such as the Propel Baltimore Fund from the Abel Foundation and venture firm Blue Highway Capital. Fulton Bank has also approved its own venture debt capability as of the end of 2021.
Schriber said that the bank hopes to one day be the go-to for startups, helping them make connections throughout Maryland and giving them the tools that they need.
“We realize that a lot of the early stage companies don’t have the money to have the type of banking capability that they need,” he said. “We’ll either eliminate or reduce fees to make sure that you’ve got the banking capability that you need to do what you need to do. We’re not going to make money off of your banking fees, we’re going to make money off of getting in with you early and scaling our relationships.”
Learn more about Fulton Bank’s Life Sciences and Technology branch at their website.
CSSI Life Sciences
Ernesto Chanona, Ph.D., and Director of Business Development and Government Affairs at CSSi LifeSciences spoke on the panel about the regulatory consultancy’s forms of support and funding. CSSi can handle a startup’s entire regulatory pathway, from putting together a regulatory thesis to getting FDA approval.
Understanding the entire regulatory pathway can help new companies understand how far away they are from approval and what type of funding they might need, both of which can be very helpful when approaching investors.
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“You understand what the timeline to return on investments is going to be,” Chanona said. “And it’s with that granularity and that road map that you can derisk your asset. You might be able to go the [NFCR], you might be able to go to [Fulton Bank], and say I have a better understanding of what I need to do, why I need the money, and when I need it.”
CSSi LifeSciences also has a sister company in Tonic Bioventures, which when fully complete will be a $115 million venture creation fund housed in Port Covington. The goal of the company is to take new technologies that are available for licensing from the NCI and form a company around them that will live under the fund. The founder of the technology will stay on as a scientific advisor, but won’t have to handle the business side of the operation.
“That’s not a bad idea, at least for your first technology, because you get to see the whole process and the fund funds it. And so you’re not terribly stressed about how to fundraise,” Chanona said. “You’re literally shadowing the entire process from start to finish.”
CSSi also runs a conference every year called the CSSi LifeSciences Partnering Forum where companies looking for funding can pitch to a large network of investors. In the 10 years the program has been around, CSSi has helped companies obtain $700 million in funding.
“We’re not broker-dealers. We’re not interested in taking any form of fee or commission from the program,” Chanona explained. “It really just goes to the companies, we just hope that the companies in turn will once they’re funded will partner with us as their regulatory commercialization partner.”
Learn more about CSSi LifeSciences at their website.