Simon’s Blog

A couple of weeks ago, we met with one of the leading venture capital groups to talk about life sciences. The purpose of the meeting was to talk about what’s really going in the hottest biotech start-ups at the moment (as with many industries, there’s so much hype around, that what is heard publically is rarely a reflection of what’s actually going on). It’s was a great meeting.

One of the things we were talking about were drug discovery startups that have their own platform technologies. For the last five years or so, these have been out of fashion as far as substantial VC investments go. The reason for this is that, historically, companies like this have burnt huge volumes of cash (many tens of millions of dollars) without having much to show in return. Bad investments in other words.

Because of this, the conventional view has been that it costs around $40M to develop a biotech drug discovery platform technology to the point where it becomes credible in the industry.

However, when we compared notes in the meeting, it became clear this really doesn’t have to be the case. I think we all came away convinced it could be done with smaller investments. All of which is pretty exciting. Why? Because technology is the only realistic source new medicines. And it looked to me that this VC at least, is becoming comfortable with the idea of investing in platform plays again. I think people can expect to see some pretty interesting investments being made in drug discovery companies over the next couple of years.