Boston-area venture capital firm PureTech Ventures, in partnership with pharma giants Merck, Pfizer, and Eli Lilly, last week unveiled a new company designed to pay for and develop drug-discovery technologies invented at academic and non-profit research institutions.
The pharma partners have provided the new venture, Enlight Biosciences, with an initial $39 million war chest that it will likely use to create startup companies around promising platform technologies developed in those labs, a company official said this week.
In return, Merck, Pfizer, and Lilly get first crack at adopting and possibly investing in the resulting technologies, which they believe will enliven their drug-discovery efforts. Enlight and PureTech also stand to benefit if the products are commercialized to the broader life sciences industry, company executives said.
Meantime, for academic institutions, Enlight represents an opportunity to bring to market useful discovery tools that may be more difficult to outlicense or build a company around, as having the three drug giants on board mitigates much of the risk.
Enlight was born out of PureTech’s existing “venture creation” model of identifying unmet needs within the life-sciences sector, finding technologies primarily at academic and non-profit research institutions that meet those needs, and forming a company around them.
“We’re not a typical VC where we’re investing in companies that other people have started,” David Steinberg, senior principal at PureTech, told BTW this week. “We actually start companies based on unmet needs that we identify with our team of partners, academic advisors, and senior scientific advisors.
“Then we go out and identify the technologies that meet those needs, assemble them into a new company, and manage the company proactively,” added Steinberg, who is also the founding CEO of Enlight. “The vast majority of the companies that we start are actually based on technologies we licensed from academia.”
PureTech has traditionally played in the therapeutics space, with some medical device ventures mixed in. However, Enlight will be focused “100 percent” on platform technologies that will be useful in an R&D and drug-development setting, according to Steinberg.
“Our traditional PureTech model of starting these companies and then going out to the venture community to raise money isn’t as appropriate with platforms and enabling technologies, because the venture community is looking more for clinical assets,” Steinberg said. “So we are working directly with pharma for these enabling technologies, because they’re the ones that need them anyway.”
Specific details of the investment scheme that Enlight will employ are sparse, as company officials declined to discuss them at this stage. However, according to Steinberg, all involved parties would have an opportunity at taking an equity stake in companies formed around specific technologies.
Enlight management will have to contend with the “delicate situation” of the fact that Merck, Pfizer, and Lilly are traditionally direct competitors but will all be seeking access to the same technologies that Enlight identifies for further development, Reid Leonard, director of external research and licensing for Merck Research Laboratories, told BTW this week.
The strategy will be “finding those technologies that are likely to be of sufficient interest to the pharma partners so that we are enthusiastic about participating, but not quite so exciting to one company in its present stage that there is the desire to take it on exclusively,” Leonard said.
“Enlight had a lot of feedback from potential pharma partners as they developed the concept, and they eventually arrived at a structure that is apparently working for all of us, because the three companies have signed up,” he added.
“We’ve been using this term ‘pre-competitive’ to describe this, which is basically technologies that aren’t really the basis on which they are competing but helps them do their jobs.”
Steinberg compared the situation to the use of personal digital assistants within his office. “We’ve been using this term ‘pre-competitive’ to describe this, which is basically technologies that aren’t really the basis on which they are competing but helps them do their jobs. With my BlackBerry, I’m not competing with VCs down the hall as to who has a faster BlackBerry,” he said. “But if no one was creating and selling and developing BlackBerrys, I’d be in big trouble.”
Any potential competitive complications for the pharma partners, however, may be outweighed by the benefit of being exposed to potentially useful drug-discovery technologies that they otherwise might not have identified through traditional routes, Leonard said.
“From my vantage point — because I’m scouting technologies or product candidates that are already within our core strategy — I really don’t get exposed to a lot of these technologies that Enlight is looking at,” Leonard told BTW.
“The reason we’re excited about participating in Enlight is that it is set up so that … the outcome of technology development is very important to Merck, but the actual activities of developing these sorts of technologies fall outside of Merck’s activities,” which typically include target identification and validation; and molecule discovery and development, Leonard said.
“The advantage to Merck is that first of all we get an early look at technologies that may become important,” he added. “And we have the ability, through our participation in Enlight, to help influence the investment from Enlight to help develop those technologies; thereby increasing the probability that these tools will be available to us down the road.”
According to Enlight’s website, examples of the types of technologies it is seeking to develop include technologies that “increase the ultimate likelihood of success of drugs that pass early development milestones; technologies for early prediction of human response; technologies that provide accurate readouts of both animal and human response to intervention; and technologies to make promising chemical and biological compounds better suited to human treatment.”
The website also names more specific technologies in categories such as imaging; biomarkers; safety and toxicology; predictive models; chemistry and biochemistry; synthesis and production; formulation and delivery; and biologics.
“To summarize we’re thematically looking for technologies to connect pre-clinical research with the clinic — for example, technologies where you can use the same imaging agent to study a drug in an animal and in people; or predictive models where you can test something in an animal and predict with a high degree of confidence whether it will work in a person,” Steinberg said.
Leonard said that Merck is specifically interested in technologies in the areas of non-invasive imaging; biomarkers that “in general would support further work in the whole realm of personalized medicine;” protein engineering; and drug-delivery.
“So we wouldn’t be expecting to work with Enlight on a project to support a biomarker for a particular Merck program; but we would expect Enlight to build a technology or a company around that technology that would provide the means for us to do that, and then we would collaborate with that company,” Leonard said.
Academic tech-transfer operations may also benefit, Steinberg and Leonard said, because these types of technologies are typically much more difficult to build a company around.
“The sorts of technologies we expect to get out of Enlight are techs that make sense standing alone, but may have very few customers at the end of the day,” Leonard said. “That’s why we’re in this pre-competitive space, even though the end result for Enlight is to commercialize these techs and make them broadly available. We get to try them out.”
Furthermore, Leonard added, the pharma partners will be able to provide more timely and valuable feedback about a particular platform technology based on how it performs in their laboratories.
Enlight has assembled a scientific advisory board and board of directors that includes academic advisors such as SAB chair Robert Horvitz, Howard Hughes Investigator, and professor of biology at the Massachusetts Institute of Technology; Sam Gambhir, professor of radiology and chief of nuclear medicine at Stanford University; Rakesh Jain, professor of tumor biology at Massachusetts General Hospital in the Harvard Medical School; and Raju Kucherlapati, co-founder of Millennium Pharmaceuticals and Abgenix, and currently a professor of genetics at Harvard Medical.
Enlight's team also includes several PureTech executives and drug developers such as Frank Douglas, a partner at PureTech and former CSO and executive vice president at Aventis; and Bennett Shapiro, also a PureTech partner and former executive vice president of basic research and worldwide licensing at Merck.
Despite the heavy Boston geographical bias, Steinberg stressed that Enlight, like PureTech, is interested in identifying and commercializing technologies from academic institutions worldwide.
Enlight has also already developed its first startup around a technology: Endra, which is commercializing technology for “real-time, high-contrast, high-resolution in vivo images of regions of interest in both human and animal subjects for diagnosis and study of diseases and their treatments,” according to Enlight’s website.
“We’re kind of in stealth mode with that company, so we can’t really talk about it,” Steinberg said. “But it is a molecular imaging company, and we’ve licensed IP, have a chief technology officer, a prototype, and additional prototypes underway.”