We speak to the co-founder of Molecule about building a unique marketplace for early stage therapeutic development.
Next week (September 1 – 4), the annual Aging Research & Drug Discovery Meeting takes place for the seventh time. As with many events, COVID-19 means that the event moves to an online format, so ARDD’s organisers have also made it completely free to attend. ARDD brings together a who’s who of top speakers from across the longevity spectrum to enlighten participants on the latest progress in the molecular, cellular and organismal basis of aging and the ongoing search for interventions.
Longevity.Technology: This four-day event is a must for anyone who wants to keep their finger on the pulse of our sector and we were fascinated to see a list of speakers spanning such a wide range of expertise. As always, how the Longevity sector is funded is a primary concern for us, and the VC panel that closes the day on Tuesday looks particularly interesting. We spoke with panelist Tyler Golato, co-founder of new “virtual accelerator” platform Molecule, about how his company is addressing the funding challenge in therapeutics development.
With the goal of decentralising drug development and helping scientists obtain funding for early stage therapeutics, Molecule claims to be building the first marketplace for biopharma intellectual property.
Golato teamed up with economist and blockchain expert Paul Kohlhaas about two years ago, with the initial idea of exploring how novel incentive systems and decentralised finance could be brought into the pharmaceutical sector, to try and improve some of the challenges facing the industry. Challenges such as how to deal with IP and patenting, the “valley of death” in translational medicine, and the lack of incentives towards collaboration.
“When I first met with Paul, the idea was to create liquid, tradable markets for IP around pharmaceutical and therapeutic IP,” explains Golato. “The idea being that, with certain aspects of blockchain technology, there were platforms and apps that were emerging for decentralised finance, that essentially allow a number of stakeholders and even just private individuals to collectively fund a project while being exposed to ownership in the intellectual property. This could be thought of as a more streamlined version of equity crowd financing.”
The idea was to create liquid markets for assets to try and bring liquidity into early-stage therapeutics development – a space that typically doesn’t have much liquidity.
“What would happen if insulin was collectively owned by diabetics, for example? What would that do to access? What would it do to pricing …”
“What would it look like if therapeutics were collectively owned by the individuals that would be using them?” says Golato. “What would happen if insulin was collectively owned by diabetics, for example? What would that do to access? What would it do to pricing and what sort of incentivization changes could that reflect on the industry in order to make drug pricing more fair, bring down the cost of development and allow for a sort of a broad risk-sharing model?”
While equity financing in therapeutics is not necessarily a new idea, Golato feels it’s an area that has struggled because the frameworks needed for effective governance and ownership haven’t really existed.
“So we began to look at how we can still apply those same frameworks into a more real-world context, and our focus really became primarily looking at innovation out of academia and small biotechs,” he says. “So in the preclinical, proof of concept stage, and using this distributed ownership and collaboration model to allow people to take a drug that they had discovered at an academic institution and move it towards a context where it could be commercialised.”
And this is where Molecule is today, still in its early stages, focused on identifying promising academic projects in the preclinical phases and working with primary investigators and universities to create frameworks to help those technologies come to market.
“We work with the researcher and the university to create a new virtual pharmaceutical company, which holds the IP that’s related to that asset and all the preexisting data,” explains Golato. “We then bring in investment – from private companies, venture capital, biotech funds, longevity VCs and so on – and that is basically done through an equity financing in this new virtual company that holds the IP around that project.”
But Molecule is aiming to go beyond the funding component and also create a framework to incentivize other collaborators to work on that asset. For example, a contract research organisation could perform preclinical experiments that help a therapy move closer to the clinic in exchange for a share of ownership in the intellectual property. Molecule is essentially aiming to create a two-sided marketplace, with inventors and organisations that hold IP on one side, and people who want to fund and collaborate on the innovation, and be exposed to equity in it, on the other.
Golato describes Molecule as being in a closed beta stage, and the platform is still six to 12 months away from going live with fully functional projects.
“We’re beginning to bootstrap the platform and marketplace, and what that involves is finding promising projects,” he says, pointing out that Longevity is a key area of focus for Molecule – identifying researchers that are focused on trying to create anti-aging therapeutics. “Currently, we’re working with seven different projects that we’ve identified as really promising, and are in the process of beginning to show these projects to partners, VCs and companies.”
By early next year and prior to going fully live, Molecule wants to select more than 20 therapeutics for the platform and establish partnerships with venture capital funds and development partners who are interested to fund these projects.
“The key benefits to investors are really visibility and discoverability – the idea that you would have many different projects from many different academic institutions in one place with a certain level of due diligence and discoverability,” says Golato.
“There are a tremendous number of universities around the world that live outside of the traditional VC hotspots. And a lot of these investments would typically not be available in the first place because we’re actually creating companies from projects that are living within academic Institute and represent a different type of opportunities than a VC would conventionally come across.”