Monthly Vibe Bio Newsletter - November 2023
Every Cure for Every Community - Investing in Biotech 101
Welcome to ’s Monthly Newsletter! Stay up-to-date with our latest company updates and insights into the ever-evolving biotech funding landscape.
You’ve likely heard about the recent downturn in the biotech markets. You may have been directly impacted as a founder, employee, investor, researcher, or even a patient. There are multiple factors affecting biotech startup capital allocation strategies. The macroeconomic landscape, regulatory changes, and emerging technologies have all contributed to this shift. But for veteran investors, this is an opportunity to secure positions in undervalued and underappreciated biotechs.
In this edition of our newsletter, we'll delve deeper into the intricacies of biotech investing with one of our partners, PIN.xyz. Additionally, we'll provide insights from industry experts and share strategies to navigate these challenges successfully.
Investing in Biotech Startups with PIN
Investing in Biotech
Investing in biotech startups offers unique opportunities to be part of supporting life changing ideas, from pioneering therapies to revolutionary diagnostics. In this article, we'll take a look at how to invest in biotech startups, some challenges and risks, as well as due diligence areas.
Why invest in biotech
Investing in biotech startups offers a high potential for returns since it’s a rapidly growing industry, benefiting from advances in technology.
Biotech companies that successfully develop and commercialize new therapies can generate significant returns for investors. This is because the demand for new and effective treatments for diseases is high, and patients are willing to pay a premium for them. The biotech industry is expected to grow significantly in the coming years, driven by advances in genomics, stem cell research, and regenerative medicine. This presents a significant opportunity for investors to participate in the growth of this industry and benefit from its expansion.
Advances in technology such as gene editing, AI, and digital health are also making it easier for biotech companies to develop new therapies and medical devices, which can improve their chances of success.
Challenges and risks
There are many challenges facing companies in the biotech industry, such long development timelines, high capital requirements, and advances in technology. However, Vibe Bio is striving to make it easier for investors to overcome those challenges.
Vibe Bio’s diligence software program has made great strides in evaluating early stage biotech companies' drug research and development to accurately predict their chances of going to market. Startup investors who are willing to take on the risk can play a vital role in helping these companies to develop and commercialize new therapies that can improve the lives of patients.
Overall, biotech startups offer investors the opportunity to invest in a high-growth industry with a high potential for returns.
Tips for investing in biotech:
Do your research.
Diversify your portfolio.
Be patient. It can take many years for a biotech company to develop and bring a new therapy to market.
How to invest in biotech
Investing in early-stage biotech startups comes with its own challenges, risks and rewards. In this section, we’ll take a look at the process of investing in early-stage biotech startups, and the most important things to consider to make an informed investment decision.
Define your investment objectives
Before putting any money down, be clear about your investment objectives and risk tolerance. Are you looking for long-term growth, short-term gains, or diversification in your investment portfolio? Investing in early stage startups is a long-term game, and it’s very suited to those who are also excited to help founders out wherever they can with their experience and knowledge of startups.
Due diligence
Thorough due diligence is crucial when investing in any type of early-stage startup.
A few key areas to consider:
The Product
The diligence of a product varies depending on the type of company you’re investing in. Evaluate how the product can grow, its monetization potential, the existence or importance of intellectual property, etc.
The Market
Make sure to ask the founder questions about how the company fits into the competitive landscape, and how they perceive the current and future size of the market. Related to this, you also want to understand the company’s go-to market plans and plans for growing/expanding.
The Team
Remember that when you’re giving money to a startup, you are forming a business relationship. You need to trust the leaders and team of the company and take into account their past experiences, skill, and integrity. If you don’t trust or believe in the team, you’re better off not investing in the company even if the company appears to be a good investment opportunity.
Financials
Financial diligence in the early stage might just be a projected financial model (vs true financials). When evaluating, you can expect the startup's predictions for the company's future to be optimistic, but it’s also important to consider whether they’re realistic. Ask about use of funds - what are the founders planning on doing with the money and how will they use it to reach the next milestone?
Equity Structure
What terms are you investing on? What valuation? What information rights do you have? Startup investing is risky, so you want to understand the underlying ownership structure and potentially who else is involved (early investors, co-founders, other angel investors, and VCs). Pay special attention to any restrictions on debt and special rights of the preferred shares.
Investing options
If you’re not a VC or a limited partner in a VC fund, there are three ways to invest in biotech startups:
Angel investing
Investment club
Syndicates
Angel investing
You can invest as a solo angel investor as long as you have good deal flow, which can take quite some time to build up unless you’re heavily involved in the industry and have a network already. You also need to have quite a bit of capital to start off with, which many people don’t. On top of that, you need to be an accredited investor. The requirements for being an accredited investor are pretty hefty:
Your gross income must exceed $200,000 per year for the last two years, or;
You need to have a net worth exceeding $1 million individually or combined with a spouse or spousal equivalent (excluding value of primary residence).
This makes angel investing difficult to access unless you’re already quite wealthy.
Investment club through PIN
While angel investing alone may not be accessible to everyone, setting up an investment club through PIN’s platform is open to everyone, even unaccredited investors, and it’s one of the best ways to get started if you already have several friends or a small community who’d like to invest in biotech startups with you.
PIN handles all the legal, tax, and administrative requirements of investing, allowing leaders to focus on facilitating investments. The platform also leverages the power of community by sourcing 60% of deals from the community itself. Communities on PIN boast an impressive 95%+ win-rate for deals they wish to invest in.
Most importantly, it’s risk-free, if a club doesn't reach its intended target or doesn't align with the organization's goals, PIN ensures that everyone's money is returned in full.
Syndicates
Angel syndicates are a bit different to an investment club, and you still need to qualify as an accredited investor. The benefits of joining a syndicate include access to a larger network of startups and investment possibilities. Syndicates also provide a means to distribute risks, as any losses incurred from unsuccessful investments are shared collectively by the subsidiary members.
There’s many different syndicates out there, but overall you’ll have less control over what startups to invest in since investments largely depend on the syndicate lead. Some syndicates are by invite only, and others are open for anyone to apply.
About PIN
At PIN, we believe that early-stage investment opportunities and equity ownership shouldn't be limited to institutions or accredited investors. We recognize that the barriers to entry have remained high for decades, hindering the participation of many potential investors.
It's time for a change - a system that breaks down these barriers and provides broader access to capital for non-traditional investment communities.
Our vision is to create a model that empowers everyday people to invest in startups together. Unlike a syndicate, community members can be accredited or unaccredited. So leaders can expand the network they raise money from. And unlike equity crowdfunding platforms, PIN unlocks exclusive opportunities to invest alongside top VC firms. All while we handle the tedious legal, tax, and admin work.
Industry Updates and Resources
Boston Business Journal: More biotechs are shutting down as investors, executives clash over valuations
Fierce Biotech: The 2023 Biotech Graveyard is comprised of 22 biotechs (mostly public) that either dissolved, closed down or seemed to unequivocally communicate a shutdown as of October 31, 2023 - a large jump from 2022’s 7 companies.
Fierce Biotech: Another one bites the dust, Beam Therapeutics is laying off 100 employees to extend runway, citing a “challenging market environment.”
Fierce Biotech: Pfizer cuts 5 pipeline programs amid cost-savings overhaul aiming to save at least $3.5 billion. ❌Terminated programs include:
Targeting non-small-cell lung cancer (NSCLC)
PF-06647020 is a biologic that was assessed in an early-stage trial of 138 patients.
PF-07257876 is a CD47-PD-L1 bispecific antibody being terminated days after a phase 1 study of 28 patients with selected advanced or metastatic tumors.
PF-07265028 is a small molecule candidate designed for patients with solid tumors. The molecule was being studied in a trial previously set for completion in 2026 as a monotherapy and in combination with Pfizer’s investigational monoclonal antibody sasanlimab.
PF-06730512 for patients with focal segmental glomerulosclerosis—which is scar tissue in the kidney—was terminated due to lack of efficacy.
PF-07038124, a small molecule candidate that was tested out in patients with atopic dermatitis (eczema) and psoriasis.
Wall Street Journal: Biotechs seeking funding from Saudi Arabia
Learn about Inflection Point Financing (IPF)
📈 Vibe Bio’s strategy supports biotechs through Inflection Point Financing (IPF).
👩🔬 Utilizing our extensive network of industry experts, Vibe Bio expeditiously assesses high-potential drug programs, unlocking capital through a deferred payment arrangement.
🧬 IPF enables biotech companies to dedicate more time on science and less time fundraising, marking a shift in the biotech fundraising paradigm and prevents potentially groundbreaking research from being abandoned. More information on IPF can be found here.
💰 If you are seeking novel and rapid financing strategies to drive you towards your next inflection point, Vibe Bio would like to speak with you. Let’s explore opportunities together.
VibeCast Updates 🎙️
On VibeCast, our show host Ray Dogum, interviews Vibe Bio community experts who come from diverse backgrounds and career paths. 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.
In addition to our YouTube channel, you can listen to episodes on:
We are always looking for interesting and knowledgeable people to interview on our show. If you know of a community member who would be a great guest, please let us know. You can suggest a guest by sending us an email, leaving a Substack comment below, or reaching out via social media.
Check out the latest episodes, 32-36 below
Unleashing the Power of Immune Cells with Andrew Gray, PhD of Karma Biotech | VibeCast Episode 32
Dr. Andrew Gray is an immune engineer and co-founder of Karma Biotechnologies, a Los Angeles startup on a mission to break cancer’s immune defenses from the inside out. Andrew has dedicated his career to understanding immune tolerance, particularly how cancer hijacks this natural process to protect itself from being cleared by the patient’s immune system. He received his PhD in Genetics, Molecular and Cellular Biology from USC in 2011. Since then, he’s founded and advised multiple biotech startups, and helps assess novel technologies for several venture funds.
Bloom Science on Harnessing the Gut-Brain Axis to Treat Neurological Disorders | VibeCast Episode 33
Christopher Reyes, PhD is a biophysicist and entrepreneur with a passion for creating solutions to improve our health, environment and economic sustainability. Dr. Reyes has founded two companies focused on developing therapeutics to address serious medical needs as well as a tech company focused on connecting people and companies to socially conscious data solutions. His first company Eclipse Therapeutics, a City Hill-backed Biogen spinout focusing on cancer stem cell targeting therapeutics, resulted in a successful acquisition in 18 months. Dr. Reyes has a Ph.D. in Biophysics at the University of California, San Francisco and B.A. in Molecular and Cell Biology, Biophysics from the University of California, Berkeley. Dr. Reyes was a postdoctoral fellow at The Scripps Research Institute. Dr. Reyes has received honors from the National Science Foundation, the Ford Foundation and was a McNair Scholar.
Eyram Adjogatse, PhD connects early-stage pharma R&D candidates with partners and other supporters. He ensures that new healthcare products are developed to their full potential. Having worked in pharmacy, in drug discovery research and as a consultant, he's gained a unique perspective on the challenges of bringing healthcare products to market. He's collaborated with biotech startups, Fortune 100 pharma companies and academic labs all over the world, and that's given him a better idea of the big picture. Dr. Adjogatse has helped numerous life science organizations to understand how to get to their next developmental or commercial milestone without wasting time or money.
Physician's Perspective on Rare Cancer Research and Development with Andy Hall | VibeCast Ep 34
Dr. Andy Hall originally trained as a physician- looking after patients with leukemia and other malignant diseases of the blood. At an early stage he became interested in how some patients responded well to treatment whilst others didn’t so he decided to spend a few months in the laboratory studying drug resistance in childhood cancer. The few months became nearly 20 years, initially as a lab-based scientist and later as the director of the Northern institute of Cancer Research in Newcastle in the North East of England. During his time working in the University, he frequently had great difficulty in assembling cohorts big enough to convince journal editors, and himself, that his laboratory observations were robust. At the same time he had the privilege of discussing his work with patients and was struck by how often they were keen to take part in research but were unable to make their wishes known. When he left the public sector in 2016 he set about finding a way for patients with rare forms of cancer who want to take part in research to be put in touch with groups who are undertaking primary research or setting up clinical trials. With 3 co-founders, Andy set up RareCan in August 2020. They have attracted funding from an enlightened group of angel investors and are about to launch another funding round in a few months time to support our rapid expansion to other markets including the US and Australia.
Revolutionizing Back Pain Treatment with Dr. Ashish Diwan (CEO of Cartago) | VibeCast Episode 35
A surgeon and scientist, Dr. Ashish Diwan has pursued molecular therapies to speed up tissue healing. He was awarded the Merrill Lynch Global innovation award for his Doctoral work and also the prestigious Phillip D Wilson award when at Hospital for Special Surgery, Cornell University. Both awards were for single molecule strategies for fracture repair (Nitric oxide) and for spinal fusion (rhBMP-2). His work using a recombinant protein CBT005 received the very prestigious Basic Science award from the International Society for the Study of Lumbar Spine (ISSLS) and is the key molecule being commercialized by Cartago Biotech.
Lab Equipment Financing Strategies for Biotechs with Jon Chee (CEO of Excedr) | VibeCast Episode 36
Jon Chee is the CEO and Co-founder of Excedr, and has spent more than a decade working in the life sciences industry. Before founding Excedr, he spent his academic career in molecular toxicology wet labs at the University of California, Berkeley. During his time in the lab, Jon realized that his research could easily slow down or grind to a halt if there wasn't access to proper laboratory equipment. With this bottleneck in mind, he began brainstorming with a friend and soon-to-be Co-founder about possible solutions for researchers. The lack of access to mission critical instrumentation eventually led to the founding of Excedr. Excedr is a laboratory support program that provides scientists with cutting-edge instrument leases and comprehensive coverage plans at an affordable price. Excedr's goal is simple: save researchers time and money. They replace the high cost and inconvenience of buying and maintaining lab equipment with a smarter, more efficient means of conducting research.
Community Feedback
We encourage you to explore our Discord server and learn more about our mission to accelerate the development of new treatments and cures through inflection point financing. 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!
Sincerely,
The Vibe Bio Community Team
#EveryCureforEveryCommunity