In disease treatment development, the phase between basic research and advanced clinical trials is referred to as the “valley of death”.
While early-stage research is abundantly funded with public grants and pharmaceutical companies are willing to fund trials of proven solutions, research in the “translational” stage, where basic knowledge is applied to potential treatments, is notoriously difficult to fund. As a result, some promising treatments are never pursued.
The pandemic has made this dangerous valley “much deeper,” said Karen Petrou, co-founder and managing partner of Federal Financial Analytics, a Washington financial services advisory firm that has developed a new financial tool designed to help solve this problem.
During the pandemic, clinical trials were halted, resources withdrawn from laboratories, attention turned to immediate needs, and many resources dried up. New research projects were difficult to start.
At the same time, the value of funding scientific research became even clearer: without the initial efforts of academic laboratories, it would have been impossible for large pharmaceutical companies to accelerate vaccine development.
The solution proposed by Ms. Petrou, known as BioBonds, gained in importance.
The program would create low-interest, government-sponsored loans for translational research. Similar to mortgages, these would be wrapped in a bond and sold on the secondary market to risk-averse institutional investors such as pension funds.
In May, Rep. Bobby Rush, Democrat from Illinois, and Rep. Brian Fitzpatrick, Republican from Pennsylvania introduced a bill that, if passed, would create these $ 30 billion worth of three-year loans.
Ms. Petrou, who was diagnosed with retinal degeneration as a teenager and went blind in her 40s, first stumbled upon the “Valley of Death” in 2013. She raised money for studies to expedite retinal degeneration treatment, but potential investors said your translational projects were too speculative – they needed results that show a potential idea works, preferably with a large population dependent on pills.
She refused to take this as a definitive answer. Many countries support private sector funding for biomedical research, and each does it differently, Ms. Petrou said, “We needed an American model.”
Ms. Petrou and her husband Basil have advised Wall Street executives and regulators for decades. (She recently wrote a book on monetary policy that promotes inequality.) You had thought a lot about mixed public-private markets during the mortgage finance crisis. Inspired by green bonds – publicly secured loans that have created a $ 750 billion private market for sustainability projects since 2007 – they started work on the idea that became BioBonds.
“It’s a lifeline,” said Attila Seyhan, director of translational oncology at Brown University and a former Pfizer scientist, of the idea. He said his colleagues were equally intrigued.
Unlike grants, the researchers would have to repay BioBonds loans. Still, it is a “constant struggle,” said Dr. Seyhan, getting full funding, and “there is tremendous frustration with the lack of alternatives.”
He believes that university divisions are getting “creative” to make BioBonds work. “There will be losses,” he said. “But if 1 percent is successful, you pay off the losses. This is how drug development works. “
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Many schools are already encouraging scholars to find funding outside of grants to pursue their ideas. Scientists are increasingly saying that they need to think like venture capitalists and keep commercialization in mind when designing clinical trials so they can raise money from private companies to fund them.
“Even if we discover something, universities have to help researchers make the transition to commercialization,” says Dr. Richard Burkhart, surgeon and researcher at Johns Hopkins University School of Medicine. His work is currently funded by the National Institutes of Health, but he is working with his institution’s Technology Ventures team to commercialize his work.
While grants are preferable, they are not abundant. Dr. Burkhart believes BioBonds can help scientists and institutions navigate difficult translational space.
When Petrous first developed the BioBond concept, they proposed a modest pilot program to study blindness. The law was introduced in the 2018 session in the House of Representatives and in a new session in 2019. Then everything changed. “Covid hit and US biomedicine just stopped,” Ms. Petrou recalled.
Meanwhile, the couple’s understanding of the need for more translational research tragically developed. Mr. Petrou was diagnosed with pancreatic cancer in 2018. After an operation in 2019 as part of a clinical study by Dr. Burkhart, Mr. Petrou was considered cancer-free. But in April last year, a routine check-up showed the disease had come back.
The Petrous were determined to find another trial, but thousands of them were stopped because of the pandemic. They were stuck in lockdown at home and decided to rethink their BioBonds idea but think bigger. They repurposed and expanded their initial proposal to relieve the added stress on the already ailing translational space.
“When we started hearing about the havoc in the context of clinical trials, I was quick to turn around,” said Valerie White, a recently retired financial services lobbyist, formerly with Akin Gump. She had helped develop the original bond concept and immediately began talking to contacts in Congress about BioBonds.
Legislation introduced by Mr. Rush and Mr. Fitzpatrick in May called the Long-term Opportunities for Advancing New Studies for Biomedical Research Act, or LOANS for Biomedical Research, would require the Secretary of Health to guarantee US $ 10 billion a year for three years to fund loans to universities and other laboratories to conduct FDA-approved clinical trials. The bill is supported by 14 co-sponsors and about 20 organizations, including the Alliance for Aging Research, Alzheimer’s Drug Discovery Association, Blinded Veterans Association, and the Juvenile Diabetes Research Foundation.
“This should, quite frankly, attract the attention of many different sectors in Congress,” said Ms. White. In their view, more biomedical research will not only save lives, but also lead to increased military readiness and profitability, among other things.
She volunteered for the project for four years and said she would continue until the BioBonds Act goes into effect.
Mr Petrou will not be there to celebrate when that day comes. He died in March. Ms. Petrou believes the surgery he underwent as part of the clinical trial would have saved his life had it not been for other complications.
Ms. Petrou is determined to see the LOANS Act passed to pay tribute to her partner for more than a quarter of a century. She thinks a lot about all the pain people are going through now, fear that could be avoided in the future if more work was done on all kinds of remedies, including cancer and blindness.
“That was their baby from the start,” said Ms. White, who was present at the couple’s wedding and remained friends with them over the years. “It’s almost ironic that this whole project started with eye contacts that could have helped Karen, but in the end Basil could have benefited if that idea had existed before.”