OnCo
ideasIdea

Milestone-based venture philanthropy with royalties recycled into the pipeline

Cancer charities would fund companies to hit specific development milestones, as the cystic fibrosis charity did to create Kalydeco, and take a royalty they reinvest in the next drug.

Disease foundations move from grant-giving to milestone-based development contracts with biotech and pharma: payments are released on defined preclinical and clinical milestones for an agreed indication (for example a rare sarcoma, a paediatric brain tumour, cachexia), the foundation receives royalties or equity, and returns are recycled. The Cystic Fibrosis Foundation's investment in Vertex produced ivacaftor and returned more than $3 billion through a royalty sale; the Leukemia and Lymphoma Society's Therapy Acceleration Program and the Multiple Myeloma Research Foundation have applied versions of this in blood cancers. Solid tumours and paediatric cancers have few such programmes at scale.

Hypothesis
A consortium of cancer foundations deploying $300 million in milestone contracts over five years produces at least two registration-stage programmes in indications with no prior industry activity and a royalty stream sufficient to sustain the programme.
Rationale
Milestone contracts change what companies work on because the foundation absorbs early risk and brings patients, registries and clinical networks; blood cancer foundations attribute several approvals to this approach. Charity money used this way is leveraged several-fold by subsequent private investment.
What would test it
Two foundations pool a fund with a professional deal team, sign milestone contracts for five programmes, and report milestones achieved, follow-on capital raised and royalties at years three and six.
Maturity
early clinical
Who has to act
philanthropy
Cost to try
Large (over $50M)
Years to first evidence
6
Bottlenecks it attacks

Connected

9top

Pages like this

not linked directly; found by shared links