How would you describe the goal of the Oncode Bridge Fund?

The Oncode Oncology Bridge Fund provides Oncode researchers early-stage financing to help the creation and growth of new enterprises based on their excellent science. In short - the goal is to invest in companies and create companies at the same time; companies that will eventually go on and build medicines and bring diagnostics to the market and to the clinic.

Our entire deal flow is based on the exciting scientific findings in the labs of our Oncode investigators. We actively look for projects and ideas within the Oncode research community that have the potential to be turned into a clinical solution for patients in the near future. Transition of a project into a company requires resources - such as money and people – often lacking in an academic setting, which is where we come in. We attract both people and money in the early stages of projects, and we also give the support needed through our entrepreneurs in residence (EIRs) or consultants with decades of expertise on a subject matter.

In your role as fund manager at the Oncode Oncology Bridge Fund - what do you find most interesting about your work?

It is not one thing, but a combination of factors. Doing this work means plenty of hard digging into breakthrough science, with the challenge of understanding it and getting all the other aspects around it in shape for an investment. And that often feels like standing at the edge of the known and looking out, into the unknown. And then there is obviously the hope that these breakthroughs would someday bring benefit to cancer patients lives. You do want to transition these breakthrough findings into a company as quickly possible, with an aim to eventually transact with investors or strategic partners. So, there is a point where the science meets the business terms of the deal. Projects especially in their early days can fail to transact for a million reasons but when one does get across the finish line, it feels like small victory!

What is the process like, starting from the initial idea?

We engineer a project together with our researchers, make small investments to validate the hypothesis with a killer experiment approach but also look for entrepreneurs willing to get behind the concept in its early days. We want to present a solid company with a robust data set to our prospective (co)investors.

The key is to remain disciplined and stringent, whilst remaining capital efficient. It is better to set the bar high from the beginning and kill early kill cheap. It’s not uncommon for many first-time entrepreneurs to think that raising an investment is all about pitch decks, big money and valuation negotiations. In practice however, most early-stage investors spend a lot of their time and resources in differentiating and understanding the biological breakthroughs with an aim to turn them into products.

What happens once the hypothesis passes the tests?

Once we have the conviction in the data, we make provisions to deploy more of our own resources and look to involve other investors actively investing in that space.

In parallel we also have our internal approvals to gain for which we go to our investment advisory committee, which is now a five-member committee - people experienced in different facets of drug discovery, drug development, diagnostics. If our proposition survives their scrutiny, we then go ahead and settle on the investment terms with that venture.

I know you scout for what venture capital companies and large pharmaceutical companies are looking for in start-ups. What do they look for?

Large pharmaceutical companies have always been looking for more mature companies, either in the clinical phase or close enough, but that is changing rapidly. Then there are the venture capitalists, which come in different flavours: some are early-stage investors that look for companies in a preclinical stage with compelling data and a team in place. And now there are also investors in Europe, fortunately, that are looking for academic projects that are in an ideation stage. Albeit the average investment rounds have grown significantly over the years, the risk bearing ability of VCs in Europe has improved as well, which is great for the European life sciences ecosystem.

And then there are also big investors looking for companies that are close to a clinical stage with the goal to transact - within a reasonable amount of time - with a large pharmaceutical company or going public in 4 to 5 years. In that case the companies must be ready to commence clinical studies with a year or two from raising the investment. For the Oncode Bridge Fund the point of contact is largely the venture capital community looking for exciting new companies to invest in.

How do the interactions typically proceed with bigger VC firms? Can you maximise your chance of an investment besides getting the right scientific data of course?

Right scientific data is in the eye of the beholder. Nevertheless, it is very important to be structured and organised in conversations with VC funds. Most first-time companies underestimate the time and effort it takes to convince ‘one’ investor, let alone organizing a syndicate of investors, and they often do not speak to enough key opinion leaders prior to reaching out to the investors. Most investors are very upfront and very open and expect full transparency as well. But nothing is more frustrating than a poorly organised data room and a story that makes quantum leaps at each interaction without any real scientific evidence. This eventually leads to no traction with the investors, and they lose interest but it’s also not possible for them to say ‘no, thank you’. Often, the answer is – this is interesting, but show us more. There is always a chance that you may turn around the company or the project, into something exciting, and then they may be able to decide.

How do you find the opportunities and the projects that have potential? Do the scientists approach you? Does industry approach you with ideas of their own?

It works both ways and both directions are equally important and work well. Sometimes the researchers come to us, and other times the interest is driven from the industry side and whilst our researchers may not be necessarily looking to start something, we do take the lead and try to make it happen. In such instances our Business Developers at Oncode Institute play a crucial role in maturing these projects into interesting programs that we can spin out.

How is an academic project different from a biotech program?

In many ways, and the quality of scientific questions is not one of them, it’s the nature of these questions. These are very often commercial or clinical considerations that academics do not recognize as a hurdle, but for the industry they can become big concerns. Sometimes it’s about missing controls or right comparators that may lead to a false positive chase for the next financing. On the Bridge Fund side, we bring in experts very early on that are not academics, but people who build products for clinical use. They develop therapeutics, going from a target to a drug in the clinic. And when we draw on their expertise, combined with our investigators’ deep scientific understanding we create an opportunity that has a serious shot at solving an unmet need.

Where is the gap between an academic mindset and the mindset of someone that, like you said – builds a product?

Scientists in an academic setting are encouraged to have an exploratory mindset. At Oncode Institute, we in fact encourage such fact-finding sprees because this is where the next breakthroughs in oncology will come from. In a biotech setting, where the focus is to build a product, scientific experiments are rarely initiated without clear go/no go criteria. This is not necessarily a gap but a difference in expertise, which when combined can bring benefit to both the academic researcher and the biotech industry. In academia everyone talks of P values, and in the industry that is a good thing to have, but they are less interested in statistical significance, they are more interested in differentiating novel therapeutic approaches when compared to the standard of care for instance. Nevertheless, I think it is important to realize that academically interesting findings may not necessarily be always commercially relevant.

Is this something academics need to understand? Do they need to change their approach and their way of thinking?

This is where Oncode Institute’s valorisation team play an important role. Many of our inquisitive PIs do understand the concept of compounding errors and that analytics of data at hand are done slightly differently in academia than in industry. Whilst a change in the way of thinking is not necessary, knowing these few aspects may help an academic understand what makes biotech, big pharmaceutical companies or VCs tick.

What does Oncode Bridge Fund find exciting, in terms of new opportunities?

We don’t have a checklist for selection of opportunities for investment, thankfully! What makes a proposition exciting depends on a multitude of factors, some of which we have covered. In general, all our opportunities have a biological, clinical, and commercial hypothesis, all of which can be tested or validated to some degree before going full tilt with an investment.

How would you describe Oncode Bridge Fund’s successes until now?

I’m most proud of the fact that alongside investing in exciting new ventures, we have also backed many first-time entrepreneurs at Oncode. We have stuck with our investment model and that has yielded successes. In particular, our entrepreneur in residence program has added a lot of value to the companies we work with, and it’s great to see the evolution of first time CEOs through this interaction. We’ve kept the bar high, and we are confident that the companies we did invest in, have some substance to their story. It will be a great success to have one of our portfolio companies advance its programs to the clinic, which is not all fun and games but I’m confident that at Oncode Institute we will find ways to accelerate and improve this process.

Read the story of Immagene, the Dutch company developing next-generation immuno-oncology therapeutics here, and the story of Oncosence, the new company that aims to discover and develop therapeutics that exploit senescence to target tumours - here.