Not long ago, neuroscience was a disappearing field in drug development, with pharmaceutical giants like Pfizer, Amgen and others retreating from the field. Now, with clinical and regulatory advances in Alzheimer’s disease, ALS and depression, the brain is once again a place investors are staking a claim.
While big pharma stepped back, venture capitalists have been working behind the scenes to bring new ideas forward. For the the Dementia Discovery Fund, which has committed almost $500 million to brain drug developers, that has meant focusing on science outside the mainstream.
“DDF was created to invest in new companies with a diversified pipeline of dementia therapeutics,” said Jonathan Behr, U.S. partner at Dementia Discovery Fund, or DDF, which is operated by SV Health Investors. “The conceit was that the large pharmaceutical companies were focusing a lot of their resources on the same mechanisms like anti-amyloid antibodies and over-investing in a really narrow set of drugs.”
Neuroscience research exits were often chalked up to the high failure rate of medicines for the brain compared to those for cancer or immune diseases. However, according to Behr, the slow investment was also the result of “a lack of fundamental understanding of the underlying disease.”
Factors like difficult drug delivery, a lack of biomarkers and an inability to biopsy held neuroscience back, Behr said. Risky and expensive clinical trials with symptomatic endpoints drove investors away, meanwhile.
Over time, that’s changed. “Each of those challenges has been addressed in some way,” Behr said. “Our understanding of neurodegenerative diseases has taken a quantum leap forward, and the platforms and tools we have to target the brain are fundamentally different.”
Stepping stones
New Alzheimer’s disease drugs like Eisai’s Leqembi and Eli Lilly’s still experimental donanemab are a step forward after years of failure. But there’s still substantial room for improvement.
“We need to be realistic that we were never going to cure any of these diseases with a single drug,” Behr said. “Having a drug that meaningfully slows disease progression for select patients is really important and meaningful to the patient community, yet still leaves a lot of opportunity and need for pharmaceutical or biotech companies to address with new drugs.”
Among DDF’s portfolio are clinical-stage companies like Therini Bio, which is focused on reducing inflammation in the brain that’s thought to contribute to dementia; Cerevance, which has multiple central nervous system candidates, including one targeting proteins that lead to cell death; and Alector, a biotech harnessing the immune system to treat diseases of the brain.
DDF-backed companies have made some progress. Alector, along with pharma partner GSK, are advancing an early-onset dementia candidate. Cumulus Neuroscience enrolled the first patient in a study of an early detection method for Alzheimer’s, while Caraway Therapeutics was acquired by Merck & Co.
None of DDF’s investments are in a company with anti-amyloid drug ambitions.
“The perception was that large pharma had that covered. There were so many anti-amyloid strategies, whether they be antibodies or vaccines,” said Behr. “Our mission was to see what's next [and] to develop a diversified portfolio beyond anti-amyloid therapies.”
A tailored approach
Specializing in a narrow field like dementia can be risky, but it’s the kind of risk that can pays off for VCs, said Behr, who holds a doctorate in bioengineering and spent time in neuroscience company creation before joining DDF in 2019.
“By being a specialty fund, we can assemble the expertise, the know-how, the people and the partners so that not only can we identify the best investments in the space, but we can also help actively manage them so that they have the highest likelihood of success,” Behr said. “Especially in a space like neurodegenerative disease, we think that expertise is critical.”