First published in Philanthropy News Digest's PhilanTopic blog. Click here for the original article.
More than a year into the COVID-19 pandemic, there has been much reflection around "lessons learned" across all sectors. In the biomedical research space, we've seen science meet the urgent need for safe and effective vaccines at miraculous speed to contain the spread of the virus. The mRNA technology used in some of those vaccines has broad implications for future treatments for a variety of other viruses, cancers, and diseases and is a clear indication of how far science has evolved in a short period of time. Imagine what treatments and cures could be unlocked — with the necessary funding.
In the United States, public funding for basic research has long come from theNational Institutes of Health, but the U.S. government lags other advanced economies in the amount of funding it provides for the translational research required to convert basic science into tangible patient treatments. And while more public funding for biomedical research at the critical clinical trial stage is essential, it is going to take public, private, and philanthropic dollars to ensure that biomedical research into promising treatments and cures doesn't wither on the vine. Federal programs such as theCancer Moonshot, state-level initiatives like theCalifornia Institute for Regenerative Medicine, and promising legislation aimed at providing private-sector loans to companies developing novel treatments for disease and disability are all helpful — but still leave a funding gap. There needs to be a third leg to stabilize those public- and private-sector efforts, and we believe that third leg is philanthropy.
As successful entrepreneurs and venture investors, we see our donations as investments in the mission of the nonprofit organizations we support. We each have a personal connection to the mission of theFoundation Fighting Blindness: one of us has experienced loss of sight fromretinitis pigmentosaas a young adult, and the other has raised two sons with vision impairment caused byStargardt disease. Based on our personal experiences, we have a keen understanding of what it is like to be a patient or have a loved one waiting for life-changing treatments to become available.
For fifty years, thanks to the generosity of donors, the Foundation Fighting Blindness has successfully funded research in pursuit of treatments and cures for the entire spectrum of inherited retinal diseases (IRDs) and dry age-related macular degeneration (AMD), which together affect more than two hundred million people globally. Yet, more needs to be done. The key discoveries made in labs need to make it into the hands of industry-led therapy developers to conduct clinical testing and win FDA approval. But a gap in funding often prevents this progress, and in this case, the science is now outpacing the funding.
To bridge this funding gap, the Foundation Fighting Blindness created the Retinal Degeneration Fund (RD Fund), a nonprofit, pure-play venture philanthropy investment vehicle designed to help accelerate the technical aspects of the organization's mission and advance its financial goals. Our respective family foundations contributed significant capital to launch the fund, which allowed us to be more involved in the organization's work by funding highly visible activities in biotech startups and spinouts. We've taken concepts and techniques from our venture capital finance and business management experience and applied them to our philanthropic goals of accelerating the progress on treatments and cures, while positioning the organization for long-term sustainability.
Launched in late 2018 with $72 million under management, the first fund is now 90 percent committed, with nine investments plus reserves. This invested capital has attracted an additional $400 million in capital to date from institutional co-investors and has produced its first exit with the sale of Vedere Bio to Novartis for $280 million, enabling the organization to plug a financial gap in its long-range science spending planandroll over significant funds to seed Fund 2.
We take comfort in knowing that the venture philanthropy model already has been successfully scaled by theBill & Melinda Gates Foundation, theCystic Fibrosis Foundation, and theJuvenile Diabetes Research Foundation, just to name a few. One key element is to manage it professionally and deliberately; one cannot just wander into biotech equity investing without experience, deep scientific know-how, and world-class advice and oversight. The RD Fund has an independent board of directors with expertise spanning retinal biology, clinical ophthalmology, finance, and entrepreneurship, and the board works closely with an executive management team with significant operational, strategic, and leadership experience. Importantly, the fund is able to rely on an international scientific advisory board and leverage the organization's patient registry and clinical consortium. In other words, the brain trust of the Foundation Fighting Blindness and its venture arm have the collective scientific and business acumen to best determine what is or is not an investible mission-related opportunity.
We are encouraged by venture philanthropy's ability to reap a return to be re-invested in furthering an organization's mission, especially in times of economic uncertainty. Most important, our experience has demonstrated that jump-starting the pipeline for treatments and cures through venture philanthropy holds real promise as a viable, scalable approach for addressing other underserved diseases impacting so many.
(Photo credit: GettyImages/Batke)
Gordon Gundis chair and CEO of Gund Investment Corporation; after losing his sight from retinitis pigmentosa in 1970, he co-founded the Foundation Fighting Blindness with his wife, Lulie, and others.PaulManningis founder, chair, and CEO of PBM Capital; both of his sons were diagnosed with Stargardt disease.