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After a dramatic post-pandemic downturn, the biotech industry is seeing a return of stability and an increase in healthcare workers. Feeling optimistic A March GlobalData survey showed no signs of optimism about the market’s recovery this year.
But the scars from the recent rollercoaster of events remain.
After capital flowed into the biotech sector in 2021, many overvalued companies missed key targets, leading to a slump the following year. Also, new macroeconomic pressures, such as rising inflation and interest rates, have led investors to become picky.
In this new normal, what technologies and companies are garnering market attention right now?
For Ayman Al-Abdalla, a partner at Mubadala Capital, finding companies to back isn’t about chasing the “wave” of investment trends, but adhering to the right fundamental principles.
“We are investing where there is an unmet need and where companies have a clear path through regulators,” Al Abdallah said.
Mubadala Capital, which manages more than $24 billion in assets across a range of sectors, has around 45 life sciences companies in its portfolio, according to Al-Abdallah. Promising companies also include AI-focused Recursion Pharmaceuticals, which leverages various datasets to map human biology and identify new drugs for various diseases. The company currently has five drugs in clinical stages and has an ambitious goal of developing $5 billion in drugs by 2025. Identify 100 candidates Within 10 years.
“We’re interested in supporting companies that are solving big problems.”
Ayman Al-Abdallah
Mubadala Capital Partners
Mubadala has also invested in Iambic Therapeutics, an AI-focused startup that aims to accelerate drug development with a platform that can be used across multiple therapeutic areas. So far, Iambic has developed one of its drug candidates, a tyrosine kinase inhibitor. Targeting HER2 and HER2 mutations — Moving to Phase 1 testing.
Here, Al-Abdallah shares his thoughts on the market recovery and therapeutic areas where further innovation is expected.
This interview has been edited for clarity and style.
PHARMAVOICE: How would you assess the current biotech investment market?
Ayman Alabdara: We remain ambitious to invest in biotech and healthcare, as evidenced by the strong developments occurring and data being generated month-on-month and quarter-on-quarter.
Signs of a recovery are emerging, driven by continued investor interest in healthcare, continued momentum in partnerships driven by strong fundamentals, and compelling data generated by technology and licensing companies operating in the space.
What unique factors do you look at when deciding which companies to invest in?
We are interested in helping companies solve big problems. For example, we see this when we see our companies using their platforms to map specific aspects of biology to develop therapies that address high unmet needs in one or more areas. Platforms and technologies are the tools to create value. But the proof is in the clinic.
We work with companies from the early stages of formation and conception. Our expertise is with pre-clinical or early stage companies. We keep a close eye on science and research trends.
Most investors seem to be interested in later stage assets, so why do you prefer early stage companies?
I like early stage companies because of the technological developments they are making in terms of developing platforms that allow for much faster data generation compared to manual, cumbersome lab approaches, and they can map new aspects of biology that cannot be tracked by traditional biological assays.
But it’s really a combination of investments in early stage formation, preclinical stage companies and some clinical stage companies. We work with management teams to help diversify their pipeline and manage risk. So we take all of this into consideration when we’re building our portfolio.
What areas are you least interested in investing in?
The lens I apply is, where is the unmet need and where is the industry not focused on solutions? I would highlight precision oncology as an area where I would like to see more companies and innovation emerge.
Response rates for most oncology drugs currently in development could be improved: there are still issues of toxicity and suboptimal efficacy caused by uncontrollable tumor heterogeneity, but we can control the development of drugs that take this into account and the tools that allow us to target drugs to the areas of high response.
Another area is the application of AI in drug development: AI companies are innovating how drugs are discovered and developed, but I believe there are still weaknesses in the workflow where you test in animal models but can’t apply it to humans – this is the weakest link in the chain.
At the annual BIO conference in San Diego this year, he participated in a panel discussion on extending cash runways and spoke about strategic milestone planning. do not have Would you use that strategy?
I think that’s true for most companies. Another topic that’s very important, especially for early stage companies, is prioritizing pipeline positioning for generating datasets and leveraging partnerships to attract investor interest. This is a series of early stage decisions that will have a significant impact on the future of the company.
We are working hard, in partnership with management, to review various clinical hits, potential scenarios and possibilities and prioritize the appropriate programs.
This approach is a key strategy for startups to mitigate financial constraints imposed by the macro market and focus on candidates that are most advanced and close to value inflection points. The second part is to target high-value therapeutic indications. The third is to think about synergies within the pipeline, either in basic biology or within modalities. And finally, using creative structures such as in-licensing and out-licensing assets is also important.
Some biotech industry leaders argue that companies should diversify their pipelines to spread risk. Others believe companies should stick to what they do best and specialize in one area. Where do you land?
It depends on the situation, but in my opinion it’s a combination of both approaches.
The traditional idea of building a pipeline by therapeutic area is a good one, but with today’s platform, the underlying disease biology can be covered by modality as well, cutting across traditional therapeutic areas and encompassing multiple disciplines. At the same time, there is a risk that companies will spread themselves too thin and exceed their expertise. That’s why our priority is to focus deeply on the underlying biology, rather than binary outcomes or single assets.
Are there any clinical results you’re excited about this year?
Personally, I am looking forward to the results of Biogen’s lupus trial (dapirolizumab pegol), which is currently in Phase 3. This is a disease area that affects many patients, including many I know personally, and it’s an area of high unmet need, so I’m excited to see progress on that front.
