Conclusion

The concept of venture philanthropy is not as new as it sounds. The National Foundation for Infantile Paralysis engaged in venture philanthropy 75 years ago. Supported by donations from ordinary Americans, the foundation funded much of the research that led to the development of the polio vaccine, up to and including the final field tests that demonstrated the vaccine’s viability in real-life settings. The foundation succeeded because it had the determination, insight, and energy to pursue an endeavor that neither public institutions nor private companies could pursue on their own. The effort required massive involvement at every stage of science, from basic research through testing and on to commercialization. The program worked because the foundation stepped out of the public–private model for paralysis at the time and directly engaged in bold science.

This model of venture philanthropy was largely lost in recent decades, as nonprofit and government funding increasingly focused on early-stage research, leaving later-stage development and commercialization to the for-profit sector. Today, however, things are changing. Evolving circumstances in the drug development sector have created new gaps in the research process that voluntary health organizations are uniquely suited (and increasingly willing) to fill.

THE TRANSLATIONAL RESEARCH GAP

The modern drug development process has become extraordinarily costly and risky. It has been estimated that only 1 of every 10,000 new drug candidates succeeds, and moving from initial discovery to full com-



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Conclusion The concept of venture philanthropy is not as new as it sounds. The National Foundation for Infantile Paralysis engaged in venture philan- thropy 75 years ago. Supported by donations from ordinary Americans, the foundation funded much of the research that led to the development of the polio vaccine, up to and including the final field tests that demon- strated the vaccine’s viability in real-life settings. The foundation suc- ceeded because it had the determination, insight, and energy to pursue an endeavor that neither public institutions nor private companies could pursue on their own. The effort required massive involvement at every stage of science, from basic research through testing and on to commer- cialization. The program worked because the foundation stepped out of the public–private model for paralysis at the time and directly engaged in bold science. This model of venture philanthropy was largely lost in recent decades, as nonprofit and government funding increasingly focused on early-stage research, leaving later-stage development and commercializa- tion to the for-profit sector. Today, however, things are changing. Evolv- ing circumstances in the drug development sector have created new gaps in the research process that voluntary health organizations are uniquely suited (and increasingly willing) to fill. THE TRANSLATIONAL RESEARCH GAP The modern drug development process has become extraordinarily costly and risky. It has been estimated that only 1 of every 10,000 new drug candidates succeeds, and moving from initial discovery to full com- 53

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54 VENTURE PHILANTHROPY STRATEGIES mercialization is very expensive (Nelson, 2008). As a result, private in- dustry has focused less on earlier-stage development and instead on later- stage research, where the chances of success are higher. Consequently, a gap in the process of translating basic research into commercially viable product candidates exists. This has an effect on translational research at the academic level as well. Novel discoveries made by clinical researchers about the nature and progression of disease help to stimulate basic investigations in academia. Without these discoveries, research is hindered and diagnosis and treat- ment are slowed. In order to better position public–private partnerships to facilitate drug development, it is highly beneficial to take an initial assessment of what aspects of drug discovery and development research academia does best, what aspects the private sector does best, and what aspects are best done truly collaboratively. From there, partners can be- gin to map out their responsibilities and goals. Fortunately, voluntary health organizations are helping to bridge the gap in the process of translating basic research into commercially viable product candidates, funding efforts to translate initial scientific discover- ies into testable, clinical-stage drug development candidates, biomarkers, and diagnostic tools. This new model of venture philanthropy has been proven on the ground, not only in the pioneering work in polio, but in the current success of organizations like the National Cystic Fibrosis Foun- dation, whose venture philanthropy efforts have created a broad pipeline of drugs that are advancing rapidly toward the clinic. Today, an ever-increasing number of voluntary health organizations are developing translational research programs and are looking for new ways to leverage their resources and know-how to fulfill their missions and impact the lives of patients. FROM PUBLIC TO PRIVATE The presentations and discussions during the workshop showed that moving into research supported by venture philanthropy involves real risks and unique challenges. The venture philanthropy model calls for voluntary health organizations that are accustomed to working solely with other nonprofits to instead engage directly with the for-profit world, working hand in hand with (and investing in) private industry as they seek to advance drugs into the clinic. The transition from funding non- profit research to funding for-profit activities is a large one, and it raises

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55 CONCLUSION a host of critical legal, accounting, partnership, communication, and re- lated issues. Attendees at the workshop brought with them diverse ex- periences in setting up venture philanthropy programs and shared their insights, successes, and lessons learned. This workshop summary at- tempts to gather those experiences and insights into a single source so that they may be called upon by others who are looking to enter this field. Workshop chair Timothy Coetzee of Fast Forward of the National Multiple Sclerosis Society noted that embracing venture philanthropy does not mean turning away from original and basic science research. He stated in his concluding remarks that scientific discovery is still impor- tant, but it is also important to develop new funding models that bring products into the clinic. Voluntary health organizations should “own the strategy” as they embrace venture philanthropy, Coetzee said. They need to set their own agendas and guide the research they fund. It is a message borrowed from modern venture capitalism, where investors aim to de- liver not just capital, but “smart capital.” THE DOUBLE BOTTOM LINE Voluntary health organizations are in a unique position. They work with a double bottom line, looking not just at the dollars and cents but at the real-life impacts on patients. Many organizations receive funding from individuals committed to curing a certain condition and improving lives. That gives them the flexibility to invest in endeavors that might be too risky for private capital. By building upon what is already in place; forming partnerships with academia, industry, and government; and help- ing set the agenda for research, translational research programs supported by venture philanthropy can play an evermore critical role in advancing new scientific ideas into the clinic, turning them into products and, even- tually, improving the health and well-being of patients everywhere.

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