Paris, France, January 9, 2025 – Coave Therapeutics (‘Coave’), a company pioneering the future of genetic medicines, today announces the successful raising of €32 million ($33 Million) in Series A financing. The financing was co-led by Novo Holdings A/S and Bpifrance, with participation from Invus and UI Investissement, alongside existing investors Seroba Life Sciences, Fund+, Kurma Partners, Omnes Capital and Turenne Capital.
The financing will enable Coave to advance its proprietary ALIGATER™ (Advanced Vectors-Ligand Conjugates) platform, a breakthrough technology addressing key limitations in the delivery of genetic payloads to extra-hepatic tissues, including limited tissue specificity, delivery efficiency and safety. ALIGATER™ enables conjugation of targeting ligands, such as small molecules, peptides, or antibody fragments, on AAV or non-viral vectors, offering superior delivery efficiency, tissue specificity and safety profile for a broad range of diseases. Importantly, the platform streamlines the manufacturing process by avoiding prior AAV capsid modifications. These capabilities will enable Coave to develop best-in-class gene therapies designed for specific indications.
The funding will also enable Coave to advance its lead preclinical assets towards clinical development, with a primary focus on the central nervous system (CNS), neuromuscular and eye diseases. Coave plans to move two development candidates to CTA/IND-enabling studies in 2026.
“We are delighted to welcome this group of top-tier investors who share our vision for the ALIGATER™ platform. This funding is a critical milestone for Coave as we work to develop a new generation of targeted, safer, and more efficacious gene therapies,” said Rodolphe Clerval, CEO of Coave. “It also reinforces our ability to expand collaborations with pharma and biotech partners, driving innovation in the field of genetic medicines for a broad range of diseases.”
Emmanuelle Coutanceau, Partner at Seed Investments, Novo Holdings, commented: “Coave’s unique technology platform, strong proof-of-concept data, and experienced team, positions it as a leader in developing new generations of gene therapies. We are excited to see Coave acquiring one of our stealth-mode companies, broadening their international presence in Denmark.”
“Coave, with its ALIGATER™ platform for creating a new class of targeted gene therapies, has the potential to deliver groundbreaking new treatments to patients in need,” said Jean-François Morin, Investment Director at Bpifrance – InnoBio Funds. “With this Series A financing and a top tier team, Coave will be able to progress its pipeline of internal programs.”
In connection with the financing, Emmanuelle Coutanceau from Novo Holdings and Jean Francois Morin from Bpifrance will join Coave’s Board of Directors.
Coave Therapeutics is a genetic medicine company pioneering the development of innovative solutions to enhance the precision, safety, efficacy and manufacturability of genetic medicines. With its proprietary ALIGATER™ platform, Coave is at the forefront of addressing challenges in gene therapy delivery to extra-hepatic tissues, creating a robust pipeline targeting CNS, neuromuscular and eye diseases.
Headquartered in Paris, France, Coave Therapeutics is backed by leading international life sciences investors. For more information about the science, pipeline, and people, please visit coavetx.com and follow us on LinkedIn.
Novo Holdings is a holding and investment company that is responsible for managing the assets and the wealth of the Novo Nordisk Foundation. The purpose of Novo Holdings is to improve people’s health and the sustainability of society and the planet by generating attractive long-term returns on the assets of the Novo Nordisk Foundation.
Wholly owned by the Novo Nordisk Foundation, Novo Holdings is the controlling shareholder of Novo Nordisk A/S and Novonesis A/S and manages an investment portfolio with a long-term return perspective. Novo Holdings is a world-leading life sciences investor. Through its Seed, Venture, Growth, Principal Investments, Planetary Health Investments and Asia teams, Novo Holdings invests directly in life science companies at all stages of development. In addition, it manages a broad portfolio of Capital Investments, including equities, bonds, fixed income, real estate, and infrastructure assets. As of year-end 2023, Novo Holdings had total assets of EUR 149 billion. www.novoholdings.dk
Bpifrance is the French national investment bank: it finances businesses – at every stage of their development – through loans, guarantees, equity investments and export insurances. Bpifrance also provides extra financial services (training, consultancy) to help entrepreneurs meet their challenges (innovation, export).
InnoBio funds are investment funds dedicated to life sciences, managed by Bpifrance, which is also one of the LPs alongside pharmaceutical companies and institutional investors. These funds aim to invest in companies developing innovative products, close to or in early clinical development, with the objective of bringing them to clinical proof of concept. InnoBio funds take minority equity stake in companies and can lead or co-lead the investment rounds. For more information, please visit: www.bpifrance.com
Founded in 1985, Invus makes equity investments in both private and public companies. The firm is active across a range of industries including consumer products, technology and healthcare. Invus has offices in New York, Paris, Hong Kong and Singapore with over $10Bn under management composed of committed capital which enables it to invest with a long-term horizon.. Learn more at www.invus.com.
UI Investissement is an independent, specialized company in the development of companies with €1.5 billion under management. For over 50 years, UI Investissement has been supporting the leaders of startups, SMEs, and growing companies to help them become economically and sustainably successful businesses, with a focus on three key sectors: healthcare, agrobusiness, and business services.
With its expertise, UI Investissement provides support to companies in the health sector at all stages of their development and plays a central role in the ecosystem. It is through the Majycc Innovation Santé fund that UI Investissement supports entrepreneurs who aim to be the architects of tomorrow’s health. The roots of Majycc Innovation Santé are deeply connected to the DNA of several private clinic groups, nursing home groups, and mutual health insurance companies, representing entrepreneurship, health and human values, respect for corporate culture, and the projects of the individuals who build them.
www.ui-investissement.com
www.linkedin.com/company/ui-investissement
Coave Therapeutics
Rodolphe Clerval, CEO
contact@coavetx.com
MEDiSTRAVA
Sylvie Berrebi, Mark Swallow
coavetx@medistrava.com
Novo Holdings, Public Relations
Marie-Louise Jersin
maj@novo.dk
Bpifrance, Media Relations
Juliette Fontanillas
juliette.fontanillas@bpifrance.fr
Every start-up team ponders the all-important question: how to convince investors to fund their idea? Currently, the fundraising landscape is particularly challenging for most early-stage biotech ventures. A fortunate few are raising exorbitant rounds, allowing them to advance their products through preclinical development, but many others are struggling to find the funding they require. In this article, we share our investor perspective on what can help companies to stand out from the crowd, given recent advancements in drug development.
by Christina Takke
There is a plethora of advice available to start-ups on how you spin a story, engage your audience, and paint a picture of your company’s potential. When approaching investors, you have a slim window of opportunity to convince them of your chance of success and how you’re going to reward early financial backers with return multiples on their initial investment.
V-Bio is an early-stage venture capital fund, so we’ve been closely involved in shaping the story of multiple academic spinouts over the years, empowering young management teams to develop and tell their story and build sustainable companies. There are a few integral ingredients to this success: the quality of the management team and their technology, as well as having addressable markets and patent protection. But we think there are a few more factors that help companies tickle the interest of investors and give them a leg up in the steep competition for funding.
Knowing your place
The identification of new biologic targets remains an essential pillar for truly disruptive innovation. New biology and revolutionary science can proffer clever solutions to challenges that, until now, were unsolvable.
Unfortunately for smaller companies, big pharma and larger organizations are simply better equipped when it comes to scouting for later-stage programs, drafting clinical development paths that ensure regulatory approvals, and putting marketing organizations in place.
These major players can finance the clinical trials combining existing drugs and develop improvements on existing approaches by tweaking half-lives and developing convenient administration methods, etc. In most cases, it’s very hard for start-ups to compete in this arena, especially when budgets are limited. So where do younger companies have an edge?
A strong foundation for innovation
There are many examples of areas that are important to pharmaceutical companies, where these big beasts need fresh blood to sustain themselves. For example: despite the ever-growing development of treatments for metabolic disorders and obesity, there’s a lack of internal innovation in the area. The market for these drugs is enormous, yet the clinical pipeline is currently relatively uniform, primarily comprised of various combinations of incretin hormones (e.g.. GLP-1, GIP and Amylin) or agonists of their respective receptors. The space for new targets and biology is wide open and begging for input.
It is situations like this where academic spin-offs can seize great opportunities. Small and agile, start-ups can explore new biology, identify new disease-causing targets and rapidly develop technologies that make undruggable targets accessible. Of course, competition among the start-ups themselves is fierce, especially as many investors don’t dare take a leap of faith and fund an early-stage endeavor. This is why it is crucial for start-ups to query the fundamentals of their business ideas and validate each step of their approach along the way.
How to preempt the skepticism
True innovation is simultaneously promising and risky. Subsequently, there is a growing emphasis in drug discovery on picking the right target from the start. Here are some of our recent observations on how new technologies can derisk novel targets, thereby positively swaying a VC’s decision.
Human-first discovery
Advanced technologies – such as spatial transcriptomics, iPSCs, statistical genetics and computational AI/ML tools – are transforming our ability to identify and validate drug targets based on human biology. The focus in drug development is shifting from the reliance on biochemical assays and animal models towards the use of human-derived data, based on the growing awareness of the limitations of translating cell- or animal- derived results into patient efficacy
This human-derived data can come either from genomic, epigenomic, transcriptomic and/or proteomic analyses of liquid samples or biopsies of patients with specific diseases, ideally collected longitudinally before and during disease progression, or from human cells undergoing certain perturbations that mimic the disease state. Although some industry-standard animal models will still be required, start-ups can stay ahead of the curve by deciding to look to human-derived data right from the start.
Cause and effect
Causal Biology – i.e. establishing causal relationships between a target and disease – is critical to ensuring that a treatment will actually benefit the patient. While genetics plays a significant role in this, non-genetic evidence from proteomics and patient-derived cells can also help to validate a target’s relevance to the disease. For example, autoantibodies can indicate causality in autoimmune diseases without a direct genetic mutation. A solid grasp of causality is an edge for a company wishing to preemptively derisk a drug candidate.
Validate in advance
Once a target has been discovered, the important work of pre-clinical target validation begins. Here, advanced validation tools are revolutionizing preclinical testing, including patient-derived primary cells, iPSCs, organoids and human cells implanted in animal models. These tools offer improved insights into disease mechanisms and human relevance, as compared to traditional animal models. For example, organoid models (which replicate tissue-level complexity) are gaining traction in fields like neurology and immunology.
Get ahead of the revolution
Management teams must keep their pencils sharp when drafting their business ideas and pre-clinical development plans. Faster is not always better, if speed leads to stumbling blocks down the line. Think transformative: utilize multi-omics platforms and genetic data to identify novel targets; develop therapies targeting specific pathways or processes with clear causal links to the disease; and leverage patient-derived iPSCs or organoids to validate your early discoveries.
Drug development skills go beyond the target identification and validation, and remain critical assets for start-up teams looking to move to their next phase. At V-Bio, we believe the ‘human-first drug discovery paradigm’ has arrived. Early-stage companies positioning themselves at the forefront of this revolution will benefit from significant growth opportunities down the line, particularly start-ups that prioritize precision medicine and targeted therapies. The convergence of genetics, proteomics and human-based validation tools is creating a new playbook for biotech investment, offering a promising future for investors who are prepared to back
Multi-year effort leverages Muna’s all-in-human MiND-MAP spatial multi-omics approach to identify and validate new drug targets and treatment pathways for Alzheimer’s disease
GSK secures option to multiple high-value, validated Alzheimer’s-relevant targets for drug discovery, development, and commercialization
Copenhagen, Denmark, December 5, 2024 –Muna Therapeutics (Muna), a biotechnology company focused on developing innovative therapeutics for neurodegenerative diseases, today announced a research alliance with GSK to identify and validate novel drug targets for the treatment of Alzheimer’s disease. The companies will explore insights from Muna’s MiND-MAP platform, which applies spatial transcriptomics to brain samples from Alzheimer’s disease patients, cognitively resilient individuals, healthy controls, and centenarians with and without cognitive impairment. This unique dataset of exceptional breadth and resolution will fuel the discovery and development of innovative medicines for Alzheimer’s disease.
Together, Muna and GSK will assess postmortem human brain samples with spatial transcriptomics and other approaches to identify and validate potential new drug targets. The collaboration leverages Muna’s deep expertise in mapping the brain’s response to pathological protein aggregates and its all-in-human platform to identify cellular mechanisms, gene networks, and molecular interactions that underlie brain resilience. Candidate drug targets will be validated using Muna’s suite of humanized cell and animal models, supported by insights from patient tissue and biofluid samples.
“Our agreement marks a pivotal moment in Muna’s evolution and in the broader Alzheimer’s research landscape,” said Rita Balice-Gordon, Ph.D., Muna’s Chief Executive Officer. “By combining GSK’s commitment to breakthrough science with our MiND-MAP platform’s ability to deliver novel insights into brain resilience, we aim to transform the landscape of drug discovery for neurodegenerative diseases and bring new hope to millions of patients worldwide.”
Under the terms of the agreement, Muna will receive an upfront payment from GSK of €33.5 million. In addition, Muna will be eligible to receive up to €140 million per target in milestone payments, as well as tiered royalties on net sales of products. Muna will expand and enhance its existing MiND-MAP dataset and will lead the identification and validation of new Alzheimer’s disease targets. GSK will lead drug development and be responsible for preclinical activities, clinical development, manufacturing, and commercialization resulting from work on targets discovered and validated in the collaboration.
“By applying spatial multi-omics to unique patient phenotypes, Muna’s MiND-MAP platform is able to determine the genetic and cellular basis of progression and resilience in neurodegenerative diseases,” said Kaivan Khavandi M.D., Ph.D., SVP & Global Head of Respiratory/Immunology R&D at GSK. “The alliance exemplifies our discovery ethos, to utilize advanced data and platform tech to identify high-confidence, human-data-derived, causal targets, which we can support with GSK’s scale and expertise in clinical development and commercialization, to bring desperately needed new therapeutic solutions in Alzheimer’s disease.”
About Muna Therapeutics
Muna Therapeutics discovers and develops therapies that slow or stop devastating neurodegenerative diseases including Alzheimer’s and Parkinson’s disease. These disorders impact memory, movement, language, behavior and personality, resulting in disability and death of millions of patients around the globe. Muna focuses its groundbreaking science on identifying new medicines to preserve cognition and other brain functions, enhance resilience to disease pathology, and slow or stop the progression of neurodegenerative diseases. Its name reflects this focus: Muna means ‘to remember’ in Old Norse. For more information, visit www.munatherapeutics.com. Follow Muna on Linkedin.
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Media Contact:
Lia Dangelico
Deerfield Group
Email: lia.dangelico@deerfieldgroup.com
In recent decades, the biotech and pharmaceutical sectors have experienced unprecedented progress, reshaping patient care through the introduction of cutting-edge therapies. A stream of novel drugs has emerged at an increasingly rapid pace, for conditions lacking approved treatments or as improved treatments where existing drugs fell short in terms of efficacy, safety, or convenience. But is the health innovation industry falling victim to its own burgeoning success?
Over the past five years, an average of 50 new drugs per year have secured FDA approval – a significant surge from the previous average of 30 drugs per year, two decades ago. The driving forces behind this ongoing success are scientific breakthroughs in unravelling molecular intricacies of disease pathways, in obtaining a detailed understanding at the atomic level of disease targets, as well as in the continual expansion of new drug modalities targeting freshly mapped disease pathways.
Yet the pharmaceutical industry stands on the precipice of its own triumphs. In a landscape where an increasing number of drugs vie for a slice of the national healthcare budget, projected peak sales are simultaneously declining. A recent Deloitte study highlights a concerning reality for companies: between 2014-2022, the average anticipated peak sales of new drugs dropped from USD 550 million to USD 389 million.
Moreover, the window for commercial sales is being compressed. There are plenty of recent examples underscoring this trend, for instance: Spinraza – the ground-breaking antisense oligonucleotide FDA approved for Spinal Muscular Atrophy in 2016 – is already witnessing a decline in sales just five years post-launch. It now contends with competitors like Zolgensma (a gene therapy, which itself reached its peak four years after launch) and the recently introduced small-molecule drug, Evrysdi, which is now dominating the market. Similarly, sales of antibody drugs targeting the calcitonin gene-related peptide (CGRP) pathway have started waning merely five to six years after their 2018 debut, facing stiff competition from newer entrants like Nurtec, Ubrelvy, and Qulipta (all small-molecule CGRP inhibitors).
The window for profit narrows further
Beyond the challenges posed by the increasingly rapid emergence of next-generation pharmaceuticals, the commercial trajectory of recently-introduced drugs is under additional pressure from evolving regulatory measures. The 2022 US Inflation Reduction Act (IRA) has introduced a mechanism enabling Medicare (and, by extension, other payers) to lower the prices of specific drugs that have been on the market for either seven years (for small molecules) or eleven years (for biologics). This legislative shift adds another layer of complexity, resulting in an even more condensed timeframe during which a drug can command its full market price, irrespective of its patent protection period.
With the lifetime revenues of new drugs being curtailed by increased competition and regulatory constraints, it is imperative for biotechs, pharmaceutical companies, and venture capital funds to evolve their investment strategies. Only by doing so will they be able to maintain a viable return on their investments.
Cost reductions are imperative – but how?
The R&D costs of new drugs can be broadly categorized in two main phases: first, from drug discovery to preclinical studies; and second, from clinical studies to market launch. The prospects are relatively limited for significant reduction in clinical development costs. Despite advancements in digitalization and the integration of wearable sensors in clinical trials (which ease the burden for patients and staff, and enable more robust data collection), the average clinical cycle for new drugs isn’t decreasing. Instead, between 2014 to 2022, the time from trial initiation to clinical approval increased from an average of 6.1 years to 7.1 years.
The preclinical phase of drug development offers a more promising arena for cost and time reduction. This is enabled by groundbreaking progress on multiple fronts, such as the expansion of the chemical/biological drug space through AI-driven de novo compound creation, high-throughput digital simulation of drug-target interactions leveraging dynamic structural information, AI-based forecasting of drug efficacy and safety, and the diversification of drug modalities targeting specific disease markers. When used thoughtfully, these tools have the potential to significantly reduce costs and expedite the pace of preclinical drug development.
Furthermore, their judicious use can indirectly yield cost savings in the clinical phase as well: a more stringent selection of clinical drug candidates translates to a lower rate of clinical failure, hence reducing overall costs per approved drug. The accelerated pace of drug development also allows companies to increase their throughput, bringing more potential therapies to market in a given period. This can diversify a company’s portfolio and enhance its revenue potential.
Safeguarding future innovation
The commercial cycle of drug development is a complex interplay of opportunities and challenges. The societal benefits are evident, with an increased number of better drugs positively impacting the lives of countless patients, all at a lower cost to the payers. However, pharma and biotech companies, along with their investors, must carefully navigate the risks posed by the diminished lifetime revenues of their newly-launched drugs. It is imperative for the long-term future of health innovation that we comprehensively embrace the myriad tools available for shortening the drug development cycle – thereby reducing costs and increasing profit margins.
As drug development continues to evolve, investors will play a crucial role in shaping the landscape and driving the industry toward a future of faster, more efficient, socially responsible, and accessible innovation.
Marche-en-Famenne, Belgium, November 18th, 2024 — ATB Therapeutics (‘ATB’ or ‘the
Company’) is excited to announce the successful completion of a €54 million Series A funding
round, aimed at accelerating the clinical development of a groundbreaking therapeutic antibody
pipeline derived from its proprietary ATBioFarm platform. The financing was co-led by EQT Life
Sciences and MRL Ventures Fund (MRLV), alongside contributions from V-Bio Ventures, VIVES
Partners, the Belgian sovereign fund SFPIM, Wallonie Entreprendre, Sambrinvest, and existing
investors.
ATB Therapeutics is dedicated to pioneering First-in-Class biologics that incorporate novel cell
killing mechanisms, including enzymatic functionalities within targeted antibodies. These rapidly
produced heterobifunctional antibodies combine multiple targeting and killing domains,
enhancing their effectiveness and safety compared to traditional conjugates. The ATBioFarm
technology facilitates the scalable, single-step production of these sophisticated, highly stable
and homogenous biologics, promising significant advancements across various therapeutic
applications.
The current capital increase will allow ATB to expand and enhance its state-of-the-art ATBioFarm
platform as well as to accelerate development of its unique “weaponized” antibodies for oncology
and immunology applications. ATB’s research and development operations will be extended to
Ghent and will continue in Marche-en-Famenne, where the Company is also setting up a cutting
edge pilot manufacturing facility.
In conjunction with this funding, ATB is excited to announce the appointment of Mark Throsby as
Executive Chairman. Mark is an industry veteran and the former Chief Scientific Officer of
Merus (NASDAQ: MRUS) where he was instrumental in the development of the bispecific antibody
therapeutics petosemtamab and zenocutuzumab. With his wealth of experience and expertise in
antibody development, Mark further strengthens the Company’s leadership, as ATB embarks on
this pivotal phase of growth. The Company is also welcoming seasoned biotech investors Karin
Kleinhans, Partner at MRLV, and John de Koning, Partner at EQT, to its Board of Directors.
“Our successful financing round demonstrates the strong potential of the ATBioFarm platform
and the confidence prominent international investors have in our vision,” stated Bertrand Magy,
CEO and co-founder of ATB Therapeutics. “We are grateful to our existing investors and the Région
Wallonne for their unwavering support. This funding will enable us to bolster our team, expand our
operations, and advance our mission to deliver transformative therapies to patients worldwide.”
Mark Throsby expressed his enthusiasm for this new role, stating, “I am particularly impressed by
the ATBioFarm platform’s capability to swiftly generate a diverse array of candidate molecules
with unique cytotoxic and targeting features. This innovative approach addresses critical challenges
in selecting ADC drug candidates and opens avenues for new mechanisms of action
that fulfill unmet clinical needs. I look forward to collaborating with the ATB team to bring this
vision to reality.”
“The founders of ATB Therapeutics have demonstrated remarkable entrepreneurial vision by
establishing a proprietary drug discovery, development, and manufacturing platform from the
ground up,” remarked John de Koning of EQT Life Sciences. “The platform’s ability to manufacture
antibodies from a single expression construct that integrates both targeting and direct cytotoxic
functions is truly exceptional, positioning ATB as a prospective leader in the next generation of
biopharmaceuticals.”
“At MRLV, our mission is to identify and support innovative technologies capable of transforming
treatment approaches and enhancing patient outcomes,” added Karin Kleinhans. “We are thrilled
to collaborate with ATB Therapeutics as they advance a pioneering class of antibody therapeutics
towards clinical development.”
About ATB Therapeutics
Founded in 2018, ATB Therapeutics is a pioneering biotechnology company based in Marche-en
Famenne, Belgium, dedicated to the discovery and development of novel antibody therapies.
Leveraging a proprietary technology platform based on plant molecular farming, ATB Therapeutics
aims to deliver targeted solutions to high unmet medical needs, including oncology and
autoimmune diseases, through innovative, next-generation of weaponized antibody treatments.
About EQT Life Sciences
EQT Life Sciences was formed in 2022 following an integration of LSP, a leading European life
sciences and healthcare venture capital firm, into the EQT platform. As LSP, the firm raised over
EUR 3.0 billion (USD 3.5 billion) and supported the growth of more than 150 companies since it
started to invest over 30 years ago. With a dedicated team of highly experienced investment
professionals, coming from backgrounds in medicine, science, business, and finance, EQT Life
Sciences backs the smartest inventors who have ideas that could truly make a difference for
patients.
About MRL Ventures Fund (MRLV)
MRL Ventures Fund (MRLV) is a therapeutics-focused corporate venture fund of Merck & Co., Inc.,
Rahway, N.J., USA. From its headquarters in Cambridge, Mass., USA, the MRLV team invests
globally in early-stage innovative therapeutics companies that are developing transformative
medicines in any therapeutics area using any modality. The MRLV team of experienced-life
sciences venture capital professionals is committed to supporting great entrepreneurs in their
quest to create value through building companies that have a meaningful impact on health and
disease. For more information, visit www.mrlv.com.
About V-Bio Ventures
V-Bio Ventures (www.v-bio.ventures) is an independent venture capital firm specialized in
financing and supporting innovative life sciences companies. V-Bio Ventures was founded in 2015
and works closely with Belgium-based VIB, one of the world’s leading research institutes in the
life sciences. The fund invests across Europe in high growth potential start-ups and young
companies targeting transformational innovations in the biotech, pharmaceutical and
agricultural sectors.
RootWave’s technology kills weeds using electricity, offering farmers an eco-friendly alternative to chemical herbicides. The eWeeding solution supports our transition towards a more sustainable agricultural industry, protecting the health of both people and the planet.
Picture a tractor making its way through a field of crops. It drives up and down the neat rows of green stalks, pulling an implement behind it. In that attachment, video cameras and AI identify the crops and guide electrodes towards any weeds that have sprung up between the rows. The electrodes send a shock of electricity coursing through the seedlings, boiling them down to their roots. This kills the unwanted plants, while leaving the surrounding soil, crops and critters undisturbed. It may seem futuristic, but this is the electrical weeding solution developed by RootWave, delivered by the smart tech of its partner Garford Farm Machinery.
This technology is tackling a major global challenge. Feeding a planet of billions is no mean feat – for the past hundred years, we’ve relied on chemical herbicides to combat weeds and increase crop yields. “Farmers today face two major weeding issues,” explains RootWave CEO Andrew Diprose. “Many weeds are developing herbicide resistance, making our chemical solutions increasingly ineffective. Simultaneously, regulators around the world (especially in the EU) are restricting or banning herbicides to protect our health and the environment. This means farmers are on the lookout for non-chemical weeding methods that are cost-competitive, effective and safe, to alleviate their fears for the future well–being of their fields and families.”
“Farmers are on the lookout for non-chemical weeding methods that are cost-competitive, effective and safe, to alleviate their fears for the future well–being of their fields and families.” – Andrew Diprose, RootWave
Old tech; new breakthrough
The concept of electrical weeding (eWeeding) has been around since the late 1800s, but throughout the 20th century, the technology was consistently sidelined, as chemical herbicides were efficient, cheap and abundant, and we hadn’t yet wizened to their immense impact on health and biodiversity. “There was a push for the technology in the late 1990s, including by my own father who was conducting academic research on eWeeding in the ‘80s,” says Diprose. “But it was always sidelined, and not just because chemical herbicides were so popular: there were safety issues as well.”
In the past, eWeeding technology has used either direct current (DC) or 50Hz alternating current (AC). The problem with either of these is that the power needed to kill a weed is potentially lethal for a person. With access to modern electronics, RootWave has been able to develop an eWeeding device that instead uses high frequency AC. “The human body can absorb several thousand times more AC than DC energy,” Diprose explains “If there is an accident with an eWeeder using high frequency AC, the farmer may experience a burn, but unlike DC or 50Hz AC, the energy transfer won’t be fatal.”
Saving both money and soil health
High costs are a major barrier for the adoption of sustainable agricultural solutions. Farmers around the world are already operating on very slim profit margins – to keep their business afloat they’re often forced to pick products that are cheap rather than good for the planet. Happily, the RootWave eWeeder is cost competitive even compared to cheap chemicals, says Diprose: “Both RootWave and Garford have independently calculated that, although farmers pay a higher upfront price of our product, compared with the continuous cost of buying chemical herbicides the eWeeder saves farmers money in the long-term.”
“Our eWeeder is nice and clean; in line with sustainable, smart, precision-oriented agriculture, which is where this industry needs to be heading.” – Andrew Diprose, RootWave
The eWeeder also has an edge on other non-chemical alternatives like mechanical weeding machines which churn up the soil. Although this tilling destroys the weeds, it also kills beneficial bugs and disrupts the soil’s microbiome and structural integrity, meaning it can’t capture as much carbon or water. “The human race is entirely dependent on a very narrow layer of topsoil which we need to be taking better care of. Since our eWeeder doesn’t leave chemical residues or damage the soil, it can support both organic and regenerative farming practices. The technology also fits seamlessly with the trend towards using autonomous tractors powered by green energy, reducing carbon emissions. Our eWeeder is nice and clean; in line with sustainable, smart, precision-oriented agriculture, which is where this industry needs to be heading.”
Protecting people and the planet
RootWave initially developed its eWeeder for use in permanent crops like fruit trees and grapevines, but with the establishment of the collaboration with Garford in 2024, the eWeeder will now also be rolled out globally for row crops like vegetables, cereals and broad-acre crops like maize and sunflowers. “Combining forces with Garford has allowed us to create a formidable weeding solution for farmers, so they can get on with growing crops while also protecting people and the planet,” Diprose states, proudly.
There has been an unprecedented surge of investments in sustainable agriculture and food technologies in the last decade, but that trend now appears to have reversed into a free fall in funding. This pattern of promise-to-disillusionment perfectly matches the hype cycle previously demonstrated by breakthrough technologies in other sectors. Can we forge a path forward for sustainable agrifood start-ups?
In the past few years, we’ve written a series of articles on how VCs can help to positively affect the planet by supporting sustainable ag and food tech through technologies like fermentation. V-Bio’s focus on impact investment has been present since our fund’s foundation, so over the past 10 years we’ve been pleased to see a similar interest for sustainable solutions on the rise among other VCs and investors. Many funds have been motivated to back the “next big thing” in sustainability, hoping to capture the growing demand for green products among regulatory bodies and consumers.
In 2021, we were delighted to see global investments in sustainable agri-food start-ups peaking at $53 billion. Funding for the sector has since taken a dramatic downward turn. In 2022, investments fell from the $53 billion peak to $31 billion, only to be further halved to $15.6 billion in 2023. Many companies that were once lauded as game-changers have struggled to meet sky-high expectations, with some seeing their valuations plummet or already declaring bankruptcy.
As with any new and disruptive technology, the initial exuberance around sustainable agri-food has given way to a more measured and pragmatic outlook. The investing in this sector has matured, and stricter regulations have been put in place to limit deceptive greenwashing. This has exacerbated the slowdown in funding but is contributing to better focus and more impactful investments in the long term. This pattern – from promise to plummet to eventual plateau – is an archetypal example of the investment hype cycle for new technologies.
The Hype Cycle: From Innovation Trigger to Plateau of Productivity
The Gartner Hype Cycle is a model describing the common pattern of excitement, disillusionment and eventual stabilization that often accompanies maturation of new technologies. The cycle begins with the ‘Innovation Trigger’, where a breakthrough initially garners attention. This leads to the ‘Peak of Inflated Expectations’, where enthusiasm (and investment) outpaces the technology’s existing capabilities. Disappointment sets in during the ‘Trough of Disillusionment’, as early adopters begin to realize the limitations of the technology (and investors start to pull out). Some surviving companies nevertheless reach the ‘Slope of Enlightenment’, where the technology is better understood and can finally be developed into viable applications, ultimately culminating in the ‘Plateau of Productivity’.
Over the past decade, investments in sustainable agri-food start-ups have followed this classic trajectory. Initial hype drove massive attention for new technologies, but as the reality of scaling issues and restrictions have become apparent, the market began to recalibrate. We are now entering the ‘Slope of Enlightenment’, where these technologies (while no longer the subject of fevered speculation) are finally finding their niches and beginning to deliver on their promises in more focused ways. We’ll look at a few specific examples more closely to see how this pattern is playing out in three well-publicized areas: protein alternatives, vertical farming and autonomous farm vehicles.
The Alternative Protein Market
Impossible Foods – once lauded as “the future of food” – serves as a prime example of the hype cycle in protein alternatives. Founded in 2011, the company quickly became a poster child for sustainable innovation with its plant-based burgers designed to mimic the taste and texture of meat. The promise was not just a new food product, but a potential solution to the environmental and ethical issues associated with traditional meat production. Early investment rounds attracted significant funding from very big names and, at its peak, the company was valued at billions of dollars.
However, as competition grew and the challenges of scaling production and reducing costs became apparent, the company’s valuation declined. While Impossible Foods and its competitors like Beyond Meat still hold a significant market share, these products have not replaced meat to the extent that early advocates predicted. The initial excitement has been tempered by the reality that, despite existing demand, the tightening of consumer wallets and politicization of food has meaningfully impacted sales. Spending on healthy food is rising, but the ultra-processed nature of plant-based meat falls afoul of consumer preferences, which are trending towards less ingredients on their product labels. The result is a reduced appetite for meat alternatives packed with preservatives, as shoppers purchase other proteins instead.
Faced with this reality, Impossible Foods has reduced its headcount, slashed its operational expenses and improved its costs of goods, focusing efforts on specific markets where the demand for its products is strongest. By doing so, the company hopes to improve its margins and finally achieve positive cash flow in the coming years. While alternative proteins haven’t revolutionized the meat industry overnight, they are on their way to establishing a sizeable and viable niche. This is similar to the trend for plant-based milk alternatives, which have recently disrupted the dairy market and now look set to stay.
The Vertical Farming Conundrum
Vertical farming promised to revolutionize agriculture by growing crops in stacked layers, ostensibly using less land and water than traditional farming methods. The technology was seen as a potential solution to the challenges of urbanization, climate change and food security. Investment poured into the sector, driven by visions of a future where fresh, locally-grown produce could be available year-round in city centers.
However, the realities of high operational costs, energy consumption and logistical challenges have downgraded expectations. AeroFarms – despite being a leader in the field and securing substantial funding – has failed to deliver on promises and lost investor confidence. The company is now undergoing reorganization, trying to emerge with a more focused strategy.
Interestingly, vertical farming company Oishii raised $134 million earlier in 2024, showing that there is still some investor appetite for the sector. The key to fundraising seems to be the identification of the right market, something Oishi has done through its unique offering of strawberries and tomatoes with taste profiles that are unmatched by conventional products.
The potential of vertical farming remains but (as with the alternative protein market) it’s clear that the technology’s future lies in finding targeted, profitable applications rather than attempting to replace traditional farming methods on a global scale. Vertical farming may never replace conventional agriculture but it can complement it, offering solutions in specific markets that make economic and environmental sense.
Autonomous Agriculture
Another area where hype has given way to a more measured approach is the transition towards electric and automated agricultural equipment. Fueled by the broader push for electrification across industries, investors have been sold on the idea of farms transformed through solutions like electric, autonomous tractors, which could reduce labor costs and environmental impact.
However, the adoption of such promising technology has been slower than anticipated. Farmers (who already contend with slim profit margins) are cautious about investing in expensive new equipment, especially when the benefits are not yet fully realized. The challenges of integrating these tools and vehicles into existing farming practices, coupled with their need for supportive infrastructure, have also hampered adoption.
Yet, slowly but surely, the technology is finally finding its place. Monarch Tractors recently raised $133 million, for example, and the technology is gaining traction in specific markets where labor costs are high, qualified seasonal workers are hard to find, or where there is a strong emphasis on sustainable farming practices. Though the rollout may be going at a tractor’s pace, it is moving forward, fitting in with the broader global trend towards precision agriculture.
Learning from the Hype: Focus and Practicality
These company examples all illustrate a key lesson for investors and entrepreneurs in sustainable technologies: the importance of focus and practicality. The hype cycle reminds us that initial excitement often gives way to disillusionment, but this does not necessarily mean you’ve reached the end of the road. Instead, it is an opportunity to refine the technology, find the right markets, and build better business models.
As these industries move from the Slope of Enlightenment into the Plateau of Productivity, we’re seeing a shift from broad, ambitious goals to more focused, achievable ones. Companies are learning to operate within a niche where they can deliver real value. For investors, this is a reminder that the innovation cycle in sustainable agrifood technologies is long and capital intensive. Investors will only achieve a return when companies can identify a market segment where their products have a clear edge over conventional solutions, and their technology can be optimized and scaled to reach profitability.
Rise and Recalibration: The Path Forward
A benefit of slogging our way through the Trough of Disillusionment is that greenwashing of agrifood technologies is finally being tackled in a meaningful way. Start-ups claiming sustainability are now subjected to scrutiny, with standardization, stricter regulations and enforced ESG disclosures helping to prevent misleading marketing. This also applies to investment funds labelling themselves as green, impact oriented or ESG compliant. While this increased transparency and accountability has temporarily led to a perceived reduction in sustainable investments, it is helping to ensure that funding in the future is spent on truly transformative technologies.
The evolution of sustainable agri-food underscores the dynamic nature of innovation and the importance of understanding the investment hype cycle. As we’ve seen in many other sectors, some early expectations in the agri-food space were overly optimistic, but the recalibration of these industries is now leading to more sustainable, focused growth. As these technologies continue to mature, they will likely deliver on their more realistic promises – not in the sweeping, transformative ways initially imagined, but through targeted, practical applications that offer tangible benefits to people and the planet. Our lesson for the future is clear: innovation requires patience, focus, and a willingness to learn from past mistakes.
Ghent, Belgium, 19 September 2024 – Tanai Therapeutics (“the Company” or “Tanai”), a VIB spin-off company developing a new therapeutic class of obesity treatments, today announces it has secured additional financing from Novo Nordisk A/S and BioGeneration Ventures (“BGV”) alongside existing investors V-Bio Ventures, Qbic and VIB, bringing the total seed round to date to over EUR 6 million. Tanai is developing an oral therapeutic targeting a novel, genetically validated pathway in obesity that plays a key role in energy expenditure.
In addition, Tanai Therapeutics also announces the appointment of leading experts Prof. Bill Haynes, Prof. Susanne la Fleur, Prof. Sir Stephen O’Rahilly, Prof. Mads Tang-Christensen, Prof. Matthias Tschöp and scientific founder Prof. Savvas Savvides to its newly formed Scientific Advisory Board.
Tanai Therapeutics was founded in 2023 based on research at the VIB-UGent Center for Inflammation Research with initial seed financing from V-Bio Ventures as lead investor, Qbic and VIB. The additional financing secured from Novo Nordisk, a leading global healthcare company with a strong heritage in metabolic diseases, and BGV, a prominent European early-stage venture capital firm with a proven track record in building next-generation biotech companies, will be pivotal in advancing Tanai’s innovative anti-obesity therapeutics towards in-vivo proof-of-concept.
“Through its unique mode of action, Tanai’s genetically validated drug target has the potential to selectively promote fat loss through increased energy expenditure while preserving muscle mass, offering a promising new approach to obesity treatment”, said Karin Conde-Knape, Senior Vice President, Global Drug Discovery at Novo Nordisk. “Tanai Therapeutics is the first equity investment through our Science2Medicine iNNvest programme, which aims to incentivise and support innovative biotechs within cardiometabolism, and we look forward to collaborating with all its stakeholders.”
“For BGV, we have actively monitored this novel therapeutic area, even prior to its high growth rate, and have reviewed multiple investment propositions. Tanai’s mechanism of action is highly differentiated and therefore holds a very strong potential in tackling obesity”, added Rianne Ellenbroek, Principal at BGV. “The formation of this distinguished Scientific Advisory Board underscores our confidence in Tanai’s innovative approach and its promise to revolutionize obesity therapy.”
Jérôme Van Biervliet, Managing Director at VIB, added: “Together with V-Bio Ventures and Qbic, we are pleased to welcome our new investors and scientific advisors. We are honoured to work closely with such prominent experts in the field, which is a strong validation of the potential of Tanai’s novel therapeutic approach. This collaboration and financing will enable Tanai Therapeutics to advance its obesity program towards key milestones, and we look forward to reporting on the company’s successes.”
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The adage ‘teamwork makes the dream work’ rings especially true in the dynamic realm of biotech startups. Most successful biotech companies have a foundation built on a robust relationship between their founders and venture capital (VC) partners. This founder-VC partnership represents a symbiotic relationship between a venture capital firm and the founding team of a biotech startup. But what are the key factors for a successful partnership?
Factors for a firm foundation
Though it is tempting to reduce the founder-VC relationship to an exchange of cash for equity, there are many other important elements that transform it into a mutually beneficial partnership. In addition to funding, VC partners also offer strategic guidance and support, and work together with the company to ensure everyone achieves their goals. The relationship flourishes when there is an alignment of vision, trust, and open communication between founders and VC partners, all of which are crucial elements for driving innovation, achieving objectives, and generating value for all stakeholders.
At the heart of a strong founder-VC partnership lies a shared vision for the company’s future. Initially conceived by the founder, this vision is refined and amplified through the interactions with the VC partners and the market insights they provide. Both parties must have a clear understanding of the company’s mission, values, and long-term goals. This shared vision forms a robust foundation for decision-making and collaboration, capable of propelling the startup to greater heights of success.
“The adage ‘teamwork makes the dream work’ rings especially true in the dynamic realm of biotech startups. Most successful biotech companies have a foundation built on a robust relationship between their founders and venture capital partners.” – Charles Margarit, V-Bio Ventures
Trust is another factor that serves as the cornerstone of any successful partnership in biotech. Founders must trust their VC partners to provide advice, support, and resources that align with the company’s overarching goals. Simultaneously, VC partners must trust founders to execute their vision and make sound business decisions. Open and honest communication on all fronts is vital for establishing and nurturing this trust, through which you have a strengthening of the founder-VC partnership. To ensure that both parties remain aligned and work toward shared objectives, it’s good to have regular updates and discussions regarding the company’s progress, challenges, and opportunities.
VCs: Very Capable partners
Once the groundwork has been laid, early-stage VC partners are well-positioned to play a crucial role in the success of the biotech startups they support. VC partners – with their extensive experience of the common pitfalls and challenges of biotech development – can offer startups not only financial resources but also strategic guidance, assistance with business planning, fundraising, talent acquisition, and even operational support.
Early in the relationship, VC firms provide well-timed injections of capital that enable the company to achieve its starting goals. As the company’s activities progress, it will of course require additional capital. To aid in this endeavor, VC partners can provide founders with introductions to other investors in their network. This can help the startup connect with funds that have more capital to deploy, which is essential at later stages of product development when the company is pushing towards clinical development or the market. Ideally, these introductions will form the basis for new and complementary founder-VC relationships, which will continue to serve the company into the future.
“VC partners – with their extensive experience of the common pitfalls and challenges of biotech development – can offer startups not only financial resources but also strategic guidance, assistance with business planning, fundraising, talent acquisition, and even operational support.” – Charles Margarit, V-Bio Ventures
VC partners should also offer valuable insights and guidance on strategic operations, helping founders navigate common hurdles, especially during the critical transition from early-stage projects in the lab to operational reality. By recommending experienced service providers based on proven expertise (for example CROs, payroll providers, patent experts, and legal counsels), VC partners can support startups in a myriad of ways, enhancing their chances of success.
Additionally, VC partners can assist founders in identifying and attracting top talent to their team. With years of experience and a vast network spanning various industries, VCs provide invaluable access to experts who can support startups or facilitate partnerships with players in the industry. Some VC firms even have in-house venture partners: individuals who serve as a crucial link between VCs and founder aspirations. These venture partners can help to significantly accelerate the growth and success of biotech startups. By assembling a team of talented individuals who complement each other, biotech startups can thrive even in challenging market scenarios.
Find the right funder
Robust founder-VC partnerships are an absolute must-have when building a successful biotech company. By prioritizing a shared vision, mutual trust, open communication, and strategic guidance, founders and VC partners can forge a potent alliance that supports innovation, achieves business objectives, and generates value for all stakeholders. If you’re a biotech founder, carefully consider your financing options by seeking a supportive and experienced VC partner whose values align closely with your own.
After several years of dismal market activity, 2024 is already looking up for deals in the pharmaceutical industry, with a recent flurry of billion-dollar mergers and acquisitions. Is this trend being driven by the impending loss of revenue caused by soon-to-expire blockbuster drug patents? And what does it mean for earlier-stage biotech startups?
After two chilling and turbulent years for capital markets, it finally feels like spring has sprung in 2024: as green shoots emerge from the ground, we’re seeing a rush of Mergers and Acquisitions (M&As) for biotech and pharmaceutical companies. This inverse effect between interest rates and M&A activity is nothing new, but the positive trend in the life sciences seems set to last for a bit longer, according to Evercore, a global investment banking advisory firm. The public markets also seem to be coming out of their funk – with eight IPOs within the first six weeks of 2024. This high number is already closing in on the total of twelve IPOs in 2023.
This rotation of capital is the lifeblood of the innovative biotech industry, since reinvestments are an important driver of new company creation. As we highlighted in a recent article – ‘Lean years for company creation in Europe?’ – the last few years have seen this conveyor belt slow down, leading to significantly less biotech startups being formed. But it seems prospects are now looking up for both investors and patients.
The pharmaceutical sector is facing a dramatic loss of revenues in the coming decade, driven by a significant number of expiring blockbuster drug patents in the coming years. Bristol Myers Squibb alone has almost 90% of its revenue at risk in the coming 5 years – a deep hole to try and fill quickly. This loss of exclusivity has led to a significant number of high-profile pharma acquisitions in past few months. Bristol Myers Squibb inked two deals, buying out psychiatric disease specialist Karuna Therapeutics for $14 billion and radiopharmaceutical innovator RayzeBio for $4.1 billion. AbbVie also had a recent splurge, snapping up ImmunoGen and its ovarian cancer therapy ELAHERE for $10.1 billion, and then a week later buying neuroscience specialist Cerevel Therapeutics for $8.7 billion. Similarly, Novartis bought Morphosys for $2.7 billion in February and Gilead just announced that it will be buying Cymabay for $4.3 billion. The common theme for all these deals is that they all bringing late-stage or commercial assets into the pharmaceutical company pipeline, no doubt with the goal of plugging their impending dips in earnings due to patent expirations.
Bolstered by their windfalls from high-profile obesity drugs, Lilly and Novo Nordisk are better shielded from these headwinds than most, but even they appear to also be very active in setting up deals to maintain their lead in the cardiometabolic arena (e.g. with Novo’s deals with Catalent and EraCal Therapeutics). Other pharmaceutical companies seem to be trying to catch up to the leaders in the pack, for example, Roche recently announced their return to cardiometabolic disease – ironically an area Roche divested from just a few years ago – paying $2.7 billion upfront for Carmot Therapeutics.
Despite this flurry of M&A activity, the deals we’ve seen so far will likely only partially compensate for the projected deficits in earnings in the lead-up to 2030. Fortunately for pharma companies, their coffers are full to bursting, giving them the necessary ‘firepower’ for further M&A activity, as well as other means of creating future value for shareholders. According to EY, the top 25 pharmaceutical companies in the world have a combined $1.4 trillion of M&A capacity on the balance sheet which is ready to be deployed when needed, boding well for dealmaking prospects in the industry. In line with this information, the CEO of Novartis recently highlighted the company’s desire for bolt-on acquisitions in the $2-5 billion range.
Although the near-term picture looks more secure than it did 12 months ago, there is still a lot of work to be done by the pharma industry to maintain its revenue beyond 2030. Drug development is a craft measured in decades, not years, making it likely that the blockbuster drugs of the 2030s are still at a preclinical stage today. This will no doubt lead to the next stage of the M&A cycle in our industry: the rebuilding of the early-stage R&D pipeline. Activity in this sphere is the bread and butter of the life sciences investment industry and a prerequisite for keeping the innovation cycle going. Along with the billion-dollar M&A deals, it is likely that we will also see a rise in these smaller deals. These earlier-stage acquisition and licensing deals create less eye-catching headlines, but they are just as important for the ecosystem, and will provide a much-welcomed reprieve from the dearth of deals in recent years.