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Building biotech companies and raising venture capital financing

By 05.01.2023May 29th, 2024All, Features

Building biotech companies and raising venture capital financing

In our latest event co-organized with Pureos, we had three extraordinary biotech founders (one of them who went on to then become a successful investor) sharing their views on how to launch a biotech company:

  • Dominik Escher from Pureos Bioventures, one of our partners and early investor in both Alentis and Engimmune.
  • Prof. Thomas Baumert from Alentis Therapeutics, which raised over $80M in venture capital.
  • Dr. Rodrigo Vazquez-Lombardi from Engimmune Therapeutics, which closed a seed financing of $16.7M this year.

Read on to learn about their challenges as startups in biotech and how they overcame them.

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About BaseLaunch

We partner with scientists and entrepreneurs to help launch and grow exceptional biotech ventures developing cutting-edge therapeutics. And we know how to do this — so far our portfolio has raised over $450M in financing with an average series A raise of $30M per company.

Pureos Bioeventures: Impacting patients’ lives

Pureos is a venture capital fund that invests in private innovative drug development companies, with an emphasis on the next generation of biological drugs and drug formats.

Its select portfolio consists of companies developing innovative therapeutics for severe diseases and conditions. From the teams of those companies to the people at Pureos, everyone shares one goal: stay at the forefront of innovation with the goal to save and improve patients’ lives.

But Dominik didn’t just come to talk about Pureos but to tell us about his own entrepreneurial journey.

Over two decades ago, Dominik started ESBATech, a biotech spin-out from the university of Zürich. At that time, support was marginal or not even there. The entrepreneurial path was not something typically being considered by academic researchers. By many in academia, it was considered as leaving the promised land and moving to “the dark side”. Dominik took the risk and left academia completely to focus on his company.

It surely turned out well: Along the way, ESBATech managed to raise $90M and bring its lead programs into the clinics. In 2009, ESBATech was acquired by Alcon, which was later acquired by Novartis. As part of Novartis, Dominik continued to lead the programs for the next six years.

Dominik’s biggest dream was always to shake hands with a patient who benefited from his work. This dream came true with the approval of Brolucizumab in 2019. After all those years, doing that was the most rewarding moment in his biotech journey.

Financing is still hard to come by.

Although times have changed and the biotech industry is much more mature in Switzerland, funding is still hard to come by. But Pureos is more than willing to look at new companies emerging on breakthrough science, filling a clear patient need and having a very committed team.

They have made 18 biotech investments in drug development companies so far and are ready to do more. And also their partnership with BaseLaunch is a clear commitment to back the next generation of up and coming biotech companies. If you have a great idea, you might be number 19.

Alentis Therapeutics: Breakthrough treatments for fibrosis and cancer

Many people don’t know that more than 45% of all deaths are related to fibrosis. Alentis develops treatments for fibrotic and rare diseases and associated cancers through the previously unexploited non-junctional claudin-1 target that plays an important role in the pathology of liver, kidney, lung fibrosis and solid tumors.

But Alentis doesn’t address the disease indirectly as most current therapies do. Its pioneering approach has the potential to directly modify and reverse the course of disease progression.

In 2008, Thomas started the first experiments with the claudin-1 antibody. Almost ten years later, he applied to BaseLaunch.

“Our first contact with BaseLaunch in 2017 made the difference.”

Thomas received funding to help pay his non-science expenses, about which he says:

Although the money was helpful, it wasn’t what made Alentis. It was really the expertise and the network that made us successful. We were introduced to valuable investors and got help with many non core science related topics such as licensing the foundational patents. Those negotiations were tough and many companies fail to reach an agreement with the university. Other topics such as the strategic positioning of the company (that was originally focussed primarily on NASH) BaseLaunch was a key player in overcoming these obstacles.

Prof. Thomas Baumert

He also praises the Basel Area as the ideal ecosystem for biotech startups. Being in the same region as two of the biggest pharmaceutical companies in the world, Roche and Novartis, has its perks.

Thomas could recruit top talent, benefit from the tri-national border and talk to important people. He met, for example, with the Head of Antibody Development of Novartis, which greatly impressed the investors.

“They want to see that you’ve talked to the right people,” Thomas says.

Engimmune Therapeutics: From lab bench to business and beyond

T cell receptor (TCR)-based therapies are an emerging class of drugs that hold great promise for the treatment of cancers. But it’s technically very challenging to identify highly potent AND safe TCRs to ensure durable anti-tumor responses. ​

Engimmune’s platform technologies address those challenges to engineer next-generation T cell receptor therapies. The platforms are based on research and a lot of technology development by Rodrigo while working as a postdoc in the lab of Sai Reddy from the BSSE of the ETH Zürich.

After having the first very promising results, they decided to file for a patent in 2019 as they realized that their technology could be an excellent tool for developing highly specific TCRs with drug-like properties.

With this in hand, Rodrigo applied to BaseLaunch and got accepted.

“BaseLaunch gave us much more than just money.”

While working with the team as BaseLaunch, various consultants were brought in to complement the initial scientific founders. Ultimately, they were also introduced to their current CEO, Soren Mouritsen.

During this time, we also linked them to Pureos. Establishing this relationship early on was key to securing the investment of $16.7M from Pureos and Novo Holdings in the seed round a year later.

“The initial CHF 500k from BaseLaunch helped tremendously,” Rodrigo says. “But we benefited most from the feedback and expertise combined with the introductions to the right people at the right time.”

We provided expert advice in all areas, from manufacturing to IP, and involved the SIP (Switzerland Innovation Park) to help Engimmune secure office and lab space in Basel.

Rodrigo calls the Basel Area a very stimulating environment full of opportunities for collaboration. It’s full of innovation and entrepreneurship, which exposed him to the business side of drug development — something he encourages every new biotech founder to do. Coming from academia, it’s very important to learn what investors are looking for in an innovation ecosystem.

A few questions from the audience

What’s the first advice you’d give to a new biotech startup?

Rodrigo’s answer is planning. “Planning, planning, planning. It’s important to have a plan as general guidance, even if you can’t always stick to it. Also, build your team out as soon as you get the opportunity. In the beginning, you can rely on external expertise and consultants, but at some point, those roles have to be filled by your own team.

What’s the best approach for a biotech company to raise venture capital?

“Go as far as you can before trying to raise capital. We already had a platform and a compound. This proof of concept helped us attract a certain type of investor,” says Thomas. Dominik adds, “prepare well before you reach out to a potential investor. We receive so many business plans for medtech, diagnostics, AI and all sorts of things, even though we strictly fund drug development. It’s apparent that those people haven’t done any research on us, and that paints a bad picture.

What’s the current investment climate in general, and how does it affect biotech?

All speakers agree that funds are currently cautious about new investments. They do larger allocations to companies already in their portfolio. But nonetheless, COVID has pushed a lot of money into the industry. Biotech is important, and if you have a good project, you’ll still be able to find funding.

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