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Fifty Years partners with Molecule to reimagine biopharma research funding and collaboration
Biopharma research scientists are a hearty bunch. They have to be because they face comically bad odds!
For every new drug to make it to the promised land of FDA approval, another 10,000 have crashed somewhere along the way. This chasm – between the lab bench and the market – is known as “the valley of death”. Translating research potential into world-changing medicine is broken – but not for the reasons you might think.
The science is, of course, exceedingly difficult. But funding can be even harder! Principal investigators at a university lab can spend two-thirds of their time writing grant proposals in the hopes that a government agency or private organization will see fit to hand them a bit of money until they need the next tranche. The result is a financing hamster wheel that distracts scientists from doing the science it’s meant to fund.
The incentive structure is also counterproductive. The frequency of papers published in academic journals acts as a measurement system for university researchers. This “publish or perish” paradigm means researchers spend an inordinate amount of time publishing – and less on researching new drugs. It also incentivizes scientists to guard the intellectual property they work so hard to develop, which can be self-defeating! Doing foundational biopharma research solo is like trying to climb Mount Everest without sherpas to guide you, without fellow mountaineers to catch you when you lose your footing.
Take all those factors together, and those comically bad odds become much less mystifying. And it’s getting worse! The cost of getting a single drug to market has soared past $2 billion, while the average time has lengthened to 13 years. In fact, since the 1950s, the cost of developing a drug has doubled every nine years. Biopharma research is one of the few sectors where, as technology and tools improve, results have worsened. This is an unfortunate reality known as Eroom’s law. In short, biopharma research is more costly and slower than ever. It desperately needs innovation.
Enter Molecule, a drug development marketplace built on Web3 primitives to open the floodgates to a new era of biopharma research that is faster, more equitable, and breaks the innovation logjam. Molecule does this by turning research projects into assets that can be sliced into fractions in the form of special non-fungible tokens (IP-NFTs) that can then be sold to raise funds. The potential of this approach is vast. Researchers can more easily fund their work and unlock more time to spend on actual science. Their backers, be they patients, investors, fellow researchers, or really anyone, receive an ownership stake in intellectual property that might, one day, yield a blockbuster drug.
NFTs are, at their heart, a new iteration of property rights that allow value to be created and moved fluidly around the web. Molecule’s core innovation is its intellectual property NFTs (IP-NFTs), which confer legal rights of ownership to research-generated IP. Importantly, they also create a standard, akin to what Y Combinator pioneered with its SAFE financing documents. SAFEs leveled the playing field between inexperienced founders and seasoned investors by creating a template for funding terms that both sides understood and accepted. The result: negotiations that could drag on for weeks were eliminated. Partnerships close quickly, with no lawyer involvement and on fair terms for all parties.
IP-NFTs can do the same by catalyzing a new market in which any interested party can, say, buy an Alzheimer’s research NFT, or potential treatment for pancreatic cancer, or a Covid-19 vaccine! There are two natural extensions of the IP-NFT framework. One is the Molecule marketplace, where researchers can create profiles and pitch their projects to potential funders. The second one is Molecule’s launchpad for bio DAOs centered on areas of interest, from psychedelics to longevity.
DAOs are, effectively, engaged Web3 communities with a balance sheet. DAOs enabled by Molecule comprise patient groups, researchers, angel investors, and other enthusiasts & experts. These DAOs raise money by issuing tokens to members, who then vote on which research projects to support. The most prominent of the DAOs that Molecule is powering is VitaDAO, a collection of longevity enthusiasts who – among others – invested $250,000 in a project led by Dr Morten Schiebye-Knudsen at the University of Copenhagen. Morten’s group is researching whether widely available, off-patent drugs can reverse DNA damage, which correlates to a number of ageing-associated diseases, including arthritis and Alzheimer’s. The money, however, was just one benefit. The researchers were stymied. They screened compounds for effects on senescent cells but were not seeing useful results. Senescent cells increase with aging and hamper the ability of stem cells to regenerate, increasing the risk of numerous diseases. One of the researchers in the DAO, who was based 4,500 miles away in St. Louis, Missouri, suggested that they dramatically increase the threshold of compound concentration for which they were screening. Once altered, the researchers saw significant anti-senescent effects where previously they observed little.
That’s just one example of Molecule’s big idea. Creating communities with skin-in-the-game in exchange for their support can spawn new levels of collaboration. It also has the potential to realign incentives that, today, often run counter to patient needs. Goldman Sachs laid this bare in 2018 when it published a report that questioned whether inventing “cures” was a good business model for biotechs. Focusing on treatments that must be taken on an ongoing basis – in effect, a subscription business – was perhaps more desirable, the bank said, than creating a drug that is so effective that it reduces the pool of potential patients! Now imagine if the “cure” was instead owned by patient groups. How differently would treatments be developed and deployed if those set to receive them had a say? The team at Molecule is building the ecosystem to make that possible.
The team launched Molecule to massively accelerate biopharma research. Co-founder and chief executive Paul Kohlhaas is a serial entrepreneur who, as a student, took part in online biohacking communities of people who lacked access to medicines and resorted to making their own with imported raw materials. He later dove into crypto as a business development director at blockchain software company ConsenSys. Paul then started Linum Labs, a studio developing Web3 projects. He started Molecule with chief science officer Tyler Golato. Tyler saw first-hand how skewed incentives and poor processes undermined researchers and widened the valley of death. He experienced this misalignment at Columbia University Medical Center, where he researched experimental treatments for late-stage terminal cancer, and then at the NIH’s National Institute of Aging.
At Fifty Years, our sweet spot is supporting founders at the early stages of building deep tech companies that can generate huge financial outcomes and create massive positive impact.
Deep tech: Molecule is creating new infrastructure for bio innovation. They pioneered a novel legal framework to standardize and fractionalize intellectual property in the form of IP-NFTs. The result is a new form of preclinical biopharma crowdfunding that is faster, catalyzes collaboration, and gives a wide group of stakeholders a piece of the IP that might lead to a blockbuster drug.
$1B yearly revenue potential: The pharmaceutical industry brings in about $1.2 trillion each year. No less than 88% of preclinical assets – the next generation of potential “blockbuster”, billion-dollar drugs – reside in academia and biotechs. This is where most of them stay. By making it dramatically easier for researchers to raise money and build communities of interested and invested collaborators, Molecule aims to ignite an explosion of innovation that yields the next generation of blockbuster treatments.
Massive positive societal impact: As the global population hurtles toward 8 billion, the need for novel drugs and therapeutics is growing more acute. Yet the pace of biopharma innovation has slowed. Getting a single drug to market costs more and takes longer than ever before, leading to unnecessary human suffering. Molecule can reverse the decades-long decline of biopharma innovation by remaking how drugs are funded and developed.
Fifty Years was proud to participate in Molecule’s seed round, which was led by Northpond Ventures and included Shine Capital, KdT Ventures, Backed.vc, 1kx, Balaji Srinivasan, The LAO, Compound, Koji Capital, Petri Bio, and Box Group. We are excited to help Molecule create a new research ecosystem that is more productive, equitable, and better for humanity.