LHON Opportunity 4
Academic scientists and biotechnology companies are working on pan-disease tools and technologies that could reinvent the research and discovery pipeline and therapeutic landscape. For LHON, this includes optimizing the delivery of gene therapies, gene editing, cellular reprogramming, cell replacement therapy, and AI for drug discovery and development. LHON is in the sights of a few gene therapy and gene editing endeavors, but as a rare disease, it may not have the name recognition or market potential on its own to attract scientists and companies looking for use cases for their technologies. LHON does, however, sit within multiple disease families, including mitochondrial diseases, optic neuropathies, and neurodegeneration, that together comprise a significantly larger patient population to become a compelling use case and entry point for multi-indication therapeutics.
LHON Collective has the ability to either invest in platform technologies and/or highlight these platforms among organizations and funders who might mutually benefit from their development. Investing in these areas will ensure that these research tools and treatments are available to the LHON field and patient community. The goal would be to accelerate and harness emerging biotechnologies by forging mutually beneficial relationships with their developers. This relationship may include financial support for preclinical or clinical development and easing the path to translation and commercialization by providing access to patients and patient data. Investments have the potential to create financial returns while also supporting the advancement of therapeutic interventions for LHON and aligned diseases.
During the LHON Program Retreat in 2024, participants highlighted and prioritized promising therapeutic modalities with significant potential to benefit LHON and other diseases if optimized for efficacy and safety. These included:
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Gene editing (CRISPR vs zinc finger nucleases, for example)
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Regulation of mitochondrial dynamics (biogenesis, axonal transport, mitophagy)
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Regenerative medicine, including cell-targeted gene therapy to reprogram muller glial cells into retinal ganglion cells
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Retinal ganglion cell therapy
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Gene therapy with improved and proven RGC tropism, mitochondrial import, and integration of wild-type protein into the protein complexes of the electron transport chain (this may involve development of new viral vectors, new mechanisms for gene expression, or new delivery methods)
Investing in platform tools and technologies and aligning with various disease areas can increase efficiency and cost-effectiveness, broaden therapeutic options, and position LHON as the gateway to addressing unmet medical needs across diseases, thereby benefiting multiple patient populations simultaneously. Achieving these objectives will advance scientific knowledge and potentially bring new therapies to market and/or overcome current limitations of therapeutics in development not only for LHON but also for related diseases. This approach not only establishes credibility and a positive reputation but also attracts more investors and other stakeholders for future endeavors.
Approaches to investing in multi-indication therapeutics
Investing in innovative tools and technologies requires matching the funding mechanism to the situation, vetting partnerships, and balancing financial risk and return. We outline three approaches to provide financial support to biotechnology companies or other product-driven research initiatives:
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Grants to fund product-driven preclinical research
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Contracts to fund specific research and development tasks
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Equity investments to accelerate research and development with the possibility of financial returns
Grants
Companies and other research organizations or initiatives are eligible to apply for grants (see Grant program). Grants can be used to fund a wide variety of research, from basic research to clinical trials. Grants that fund research with a clear path to translation, commercialization, or clinical application may include language that requires sharing intellectual property (IP) and/or right of first refusal to buy or license any resulting products.
Funding for these activities could easily fit within a scientific funding program as outlined in priority three. Initiatives such as the Gilbert Family research initiatives have utilized a mix of grants to academic institutions and biotech companies to accelerate research in the field.
Contracts
Contracts are agreements with companies and other research organizations to perform specific research and development tasks. Contracts typically have a defined scope of work and set deliverables, milestones, and financial terms. Examples of research activities funded by contracts could include creating a novel cell or animal disease model using a proprietary gene editing technology, leveraging an AI tool to predict drug efficacy, optimizing the formulation of an experimental therapeutic, or conducting a clinical trial.
Similarly, contract or project-based funding to a biotech company can be used as an approach to several of the aims above. Within our recent portfolios, BD2 has utilized a blend of grants and milestone-based contracts to provide targeted tools and services to the research consortium.
Equity Investments
Investments can also be made directly in a company (or through a vehicle like a venture philanthropy fund) in exchange for an equity stake. This comes with the potential for financial returns and input into business decisions. In therapeutic research and development, equity investments are often made in promising drug candidates and platform technologies to accelerate their development and commercialization. Investing in the earliest stages and getting to proof-of-concept can attract follow-on investors from venture capital, biotech, or pharmaceutical companies.
Based on our interactions with investigators and clinicians in LHON, and those in aligned biology and disease areas, building partnerships through investment will meet the critical need for bringing novel tools and technologies to a field that, historically, has been constrained by a lack of capacity to innovate due to its small size and limited access to funding. Key examples include optimized vectors for gene therapy, innovative therapeutic delivery methods, and novel cell therapy options. Investments in companies or research initiatives that are pursuing a commercial product require a different level of due diligence than funding discovery or knowledge-generating research to ensure the deal is fair and mutually beneficial.
Figuring out at which stage to invest and what type of investment to make will depend on the needs of the recipient and the funder; investments can be used for preclinical and clinical research, regulatory approval, and commercialization efforts. We recommend establishing a global advisory board that has a business advisory committee and a mission alignment committee for governance over investment decisions. Alternatively, LHON Collective could leverage an established venture program with aligned goals, such as The Mito Fund at UMDF, to assist with diligence and funding strategy.
The amount of capital required to invest in biotechnology companies and other product-driven research initiatives will vary based on the stage of the research. Early-stage or seed funding, typically directed toward proof-of-concept studies, requires smaller investments compared to clinical trials and commercialization efforts. While some nonprofit disease foundations have cited investments in the range of $200K to $2M, there are no strict upper or lower limits. Non-repayable grants usually come with a predetermined dollar amount, while contracts for specific deliverables may be negotiable but typically have a baseline cost. Equity investments are tailored to each case, involving calculated risk assessment and negotiation.
Select investments can be made immediately following due diligence. Establishing a global advisory board to weigh in on a broader investment strategy could take several months to a year and would require defining the purpose and responsibilities of the board, recruiting advisors with a diversity of expertise, and establishing operating procedures. Investment decisions can advance quickly following these steps, offering the potential for more immediate impact despite the acknowledged risks.
Considerations
Investing philanthropic dollars in for-profit companies or product-driven research requires decision-making that is informed by diverse perspectives and grounded in the realities of the field; an advisory board should be comprised of people who can deliver these perspectives. Beyond vetting scientific feasibility, investments in product-driven research also require considering regulatory requirements and market dynamics to mitigate risk. Additionally, prioritizing capacity-building initiatives and collaborative partnerships can multiply resources and expertise, strengthening LHON’s Collective’s ability to drive impactful investments. Lastly, guiding investment decisions towards initiatives that not only generate financial returns but also advance the foundation’s broader philanthropic goal to bring more and better therapeutics to LHON patients is critical for long-term alignment.
