Monthly Vibe Bio Newsletter - April 2023
Every Cure for Every Community - Can biotech research rely on institutional money?
Dear Vibe Bio community,
Spring is here and the energy is buzzing around our diverse communities of patients, researchers, and partners. The people that share their personal stories and experiences are the catalysts who inspire the rest of us to drive meaningful change in health and life sciences research.
We are thrilled to have you join us as we work towards supporting biotech organizations in identifying and reaching their next value inflection point milestones.
We understand the importance of financing critical therapeutic research in biotechnology and its impact on patients and caretakers who may be suffering needlessly. It is our goal to facilitate the financing process, enabling organizations to develop life-changing therapies and treatments.
As we look ahead to the future, we are confident that advancements in biotechnology will significantly improve the outlook for patients and their loved ones. Together, we can help drive progress and make a meaningful difference in the lives of those who need it most.
We hope you enjoy this April edition of Vibe Bio’s Monthly Newsletter.
Raising Money for your Biotech?
The Vibe Bio team is interested in understanding fundraising trends for early to mid stage biotech companies. Our financing thesis is focused on helping biotech companies and drug development programs reach their next inflection points. Inflection points in biotech are typically a moment in time when important drug development milestones are reached, leading to the next capital raise.
You’ll be hearing more about inflection points from us as we create a strategy to help nudge biotechs into their next inflection points.
If you are raising funds for your biotech startup, we want to hear from you!
Uncertainty in the Financial Banking System
After the blockbuster years of 2020 and 2021, the funding of biotech companies has since steadily declined. Due to a confluence of macroeconomic factors, the volume of funding for biotechs remains relatively stagnant in 2023. Nature Biotechnology published a recent news feature describing the importance of using Precision Financing during this economic cycle. Below are graphs from the article illustrating the number of biotechs exits and raises in recent history. Overall, it’s clear that it’s not as easy to get funding as it used to be.
One major factor contributing to this decline is the broader banking and venture capital industries currently facing an uncertain future. This trend can be attributed, in part, to the cracks in the US and global financial banking system that have begun to surface.
Below are some prominent banking headlines that have contributed to this banking system uncertainty:
On March 8, 2023, Silvergate Capital announces intent to liquidate Silvergate Bank.
On March 10, 2023, Federal Regulators shut down Silicon Valley Bank, the 16th largest U.S. bank at the time.
On March 12, 2023, NY State Department of Financial Services shut down Signature Bank.
‘I am truly sorry’: Credit Suisse chair pleads with angry shareholders at annual meeting
Essentially, once people heard about potential liquidity issues with certain banks, people rushed to withdraw their money. Many companies pulled their money from these banks and into other new bank accounts, often under $250,000 to ensure their deposits were covered by FDIC insurance. This caused the banks to “run out of money” leading to bankruptcies and a cascade of downstream effects that are still percolating throughout the biotech fundraising ecosystem.
In a recent article, authors from EY explain that “Over the next 12 to 18 months, the sector likely will experience more turbulence as smaller, less mature biotechs with insufficient cash reserves grapple to survive and institutional investors hold out for improvements such as healthier valuations.”
We believe it's essential to stay informed and work together to navigate these challenging times.
Alternative Funding Models
As we think about the integration of emerging fintech, digital assets, and biotech in our society, we are inspired by the creative alternative funding models that we’re seeing in the marketplace.
We’re seeing crypto philanthropy start to be more mainstream as The Giving Block reported an average nonprofit on their platform raising $26,000 in 2022. Some raised millions of dollars in crypto from donors.
Although crypto philanthropy and DAO-like organizations have contributed to many biotech research programs over the past few years, the mainstream biotech entrepreneurs prefer to leverage traditional funding routes, like VCs and big pharma partnerships.
In most cases, biotech companies build backwards with the intent of being acquired or selling their technology to a larger pharma company. This is just the way it is now, for reasons we won’t get into here. You can learn more about why so few biotech startups want to be the next big pharma in this Crunchbase article.
We’re also seeing changes in how startups manage their cash. Foundation Capital shared a helpful summary to help startups be more responsible with their cash.
Vibe Bio has developed new funding options for biotechs. An important part of our mission is to identify companies requiring inflection point financing for their drug development programs. What does inflection point financing mean to you?
We had a wonderful time meeting fellow Zuzalu residents and #BlockchainMeetsBio participants. It was clear that network state communities have a lot of potential to disrupt the institutional status quo and that biotech is one of the focal points to drive organization.
There were many big, exciting, and futuristic ideas shared with attendees at the event. Universal vaccines for the flu, new types of bio-based cement, and DAOs for patient data (to name a few).
One thing, we hope, is covered next year is how we can drive sustainability of these projects. That’s the billion dollar question that the community is trying to answer. Either way, if you are in Zuzalu, we’d love to hear from you!
On VibeCast, our Industry Engagement Manager and host, interviews Vibe Bio community experts who come from diverse backgrounds and career paths. However, one commonality that all VibeCast guests have is a passion to improve society by encouraging research and educating others by sharing their own experiences.
Collectively we have the skills. We have the technology. We have the passion. We now need the community catalyst to bring it all together. That’s Vibe. Let us know if you would like to suggest a community member to be guest for the show! Leave a Substack comment below or reach out via social media.
Check out the latest episodes 4-7 below.
Sarah Hamburg, PhD, on Neuroscience Research and DeSci | Vibecast Episode 4
Meet Sarah Hamburg, a talented researcher and thought leader in the world of decentralized science. With an impressive background in neuroscience, psychology, and fintech, Sarah has a unique perspective on the potential of technology to revolutionize scientific research. A strong believer in the democratization of research funding and collaboration, Sarah actively participates in the Decentralized Science (DeSci) community, helping to drive innovation and expand access to cutting-edge research opportunities.
Chris Moxham on Drug Hunting, Genetics Research, and Drug Discovery | VibeCast Episode 5
Chris Moxham, PhD, has 25 years of diverse drug discovery experience in both small and large molecule discovery with demonstrated success as an innovative scientific and business leader. He has significant contributions in advancing multiple molecules into clinical testing for Oncology, ImmunoOncology, Diabetes and Neurodegeneration.
Gunnar Esiason on Cystic Fibrosis, Fundraising, and Clinical Trials | VibeCast Episode 6
Gunnar Esiason is a passionate patient advocate, particularly for individuals with cystic fibrosis, as he himself is a patient. He has played a significant role in fundraising efforts for the Boomer Esiason Foundation, raising over $160 million for the fight against cystic fibrosis since his diagnosis in 1993. With his extensive experience and dedication to advocacy, Gunnar brings a unique and insightful perspective to the conversation around patient involvement in clinical trial design.
Nadim Yacteen on Precedent Driven Innovation in Biotech | Vibecast Episode 7
Nadim's sole focus is helping his clients generate breakthrough ideas that solve their most formidable business challenges, and prime them for successful implementation. Nadim created the Precedent Driven Innovation (PDI) approach when he entered the consulting phase of his career. He applied this approach across industries at Strategy& (formerly Booz & Company). He began his career with Johnson & Johnson and Novartis in a number of U.S. and Global strategic positions.
We also want to draw your attention to a few upcoming events where you can meet with members of the Vibe Bio team.
EthBoston - April 29-30, 2023
SynBio Beta - May 23-25, 2023
We encourage you to explore our Discord server and learn more about our mission to accelerate the development of new treatments and cures. You can also follow us on social media to stay up-to-date with the latest news and updates from our community.
Tell us what else you’d like to see in future editions of the newsletter. We’d love to hear from you!
The Vibe Bio Community Team
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