Investment realities in biotech: a patent attorney’s perspective

At this month’s Advanced Therapies Integrates conference, GJE partner Ross Cummings participated in a panel discussion focussing on investment for advanced therapy medicinal products (ATMPs).

Following what many called a “nuclear winter”, the strain placed on companies developing ATMPs has undoubtedly been challenging. However, today’s investment climate is far from frozen for the biotech sector. In fact, with innovation continuing at pace, there are strong reasons for optimism. The funding environment remains open to reward companies with compelling science, and in particular, those with a strong IP strategy as a bedrock. Where to look for this funding, and how to secure it, remain two prominent questions.

As to where companies are looking for capital, there are several well-established routes alongside a growing wave of newly formed VC funds which provide active and accessible sources of funding. Most notably, the globally dominant US market offers a pool of risk-familiar investors looking to take on companies with impressive pipelines. Closer to home, European funds are increasingly important – several are in fact deeply specialised in advanced therapeutic modalities, making them attractive partners for companies in the ATMP space. In the UK, early-stage companies can secure valuable support via both private investment and grants such as those from Innovate UK. This kind of funding can be instrumental for a company to generate data and curate an IP strategy which helps to build the story for potential investors. Selecting and pursuing the right funding source is essential, especially at an early stage, and the choice should be guided by a company’s commercial strategy and the underlying IP.

Having established the best source of capital, companies must successfully secure it. Attracting funding requires a clear story explaining a credible investment case supported by strong IP. For instance, a compelling narrative can be crafted around a strong unmet need for a particular therapeutic, or market dominance established by a robust IP portfolio. IP can also be pivotal in demonstrating a global strategy protecting core innovation and future advancements in key commercial markets. Further, clear freedom to operate (FTO) analyses can reduce risk perception and reassure investors. Ultimately, IP remains a key driver of confidence and value which can be leveraged by companies to create an attractive and well-substantiated investment proposition.  

Altogether, despite the challenges of recent years, the mood for biotech is optimistic. Certainly, capital flows toward companies with powerful science bolstered by robust IP protection and a clear strategic direction. Success can therefore depend not only on the selection of a suitable funding source, but also the development of a clear and convincing story that will attract the right investor. For companies that can address both of these points, the prospects are highly promising.

GJE’s advanced therapeutics team regularly assists early-stage biotech and pharmaceutical companies seeking to protect their innovation and that are seeking investment. To discuss your IP strategy, please contact us: gje@gje.com.