Where Are Clinical Trial Investments Going?

March 4, 2021
Moe Alsumidaie

Pamela D. Garzone, Chief Medical Officer at Calibr, shares her perspectives on how investor decisions are shifting dramatically into biopharmaceuticals.

Nicholas Christakis from Yale mentioned in his book, Apollo’s Arrow, that medicine tends to advance after large global pandemics. One indicator of such developments is to follow where investments are going, and investor decisions are shifting dramatically into biopharmaceuticals. In this interview, Pamela D. Garzone, Chief Medical Officer at Calibr, a division of Scripps Research, discusses her perspectives on this topic.

Moe Alsumidaie: How has the COVID pandemic impacted investments in early phase clinical trials?

Pam Garzone: Despite the pandemic in 2020, many (venture capital) VCs and PE (private equity) had closed significant funds towards the end of 2019, and we saw more of that investment move into the biotechnology sector than perhaps in past years, even though our industry is a high risk but high reward industry. Many investors tended not to go into biotechnology, as they used to invest heavily in retail and hospitality areas. So, the pandemic opened opportunities for investments in healthcare and biotechnology. 

I also observed more investments in the preclinical space. We went through this cycle of where there would be investments in companies that had already de-risked their assets i.e., issues that might emerge in the development process, and so the investors were focusing on companies with late-stage assets. I’ve seen investments and increased series A funding in the past year into startups with only pre-clinical assets. They’re several years away from getting into the clinic, but investors bet on the science, and they’ve jumped on the innovativeness of these preclinical assets.

And then, in concert with that, the IPOs have been astronomical; they’ve just been enormous, bringing in over a hundred million dollars. I see this emerging trend of investing earlier in companies with early assets, and the exits are enormous if you’re considering an IPO. And I think, companies working on COVID treatments just had huge valuations based on the promise of a cure, reducing the infection rates, to something manageable and reducing the death rate. Interestingly, we are seeing a renewed interest in investing money into bacterial and viral research, and a carry-over effect is to look at companies that work on drugs to treat infectious diseases.

Additionally, because everybody feared going into a clinic for a clinic visit, not wanting to go outside, but still participating in a trial or needing medical care, there appears to be a heavy investment in digital technologies. I believe that this was occurring, but I think the pandemic sped this up significantly. The pandemic changed the trajectory of investments in this area. Companies offering services ranging from AI to developing sensors to telemedicine and telehealth all benefited by raising much money from investors during the pandemic.

MA: Asides from renewed interest in microbiology and virology, what about a continued interest in existing disease indications and technologies, such as oncology and platform technologies?

PG: There is documentation suggesting that oncology remains very high as an investment focus, and investment in platforms also remains very high. Platforms include RNA technology , cell-based therapy or other modalities such as antibody-drug conjugates. You build onto an initial indication then expand into other therapeutic areas. For example, engineered cytokines are being developed to treat cancer and with slight modification in affinity, you can develop them for auto-immune diseases. Cell and gene therapy have exploded in the past several years with the success of CAR-T treatments. And then there have been successes with gene therapy as well. There has been much investment in cell and gene therapies to date; it started before the pandemic, and I believe will continue. . The other area of focus is on orphan drugs and rare diseases, where the development path is somewhat shorter because there are fewer patients to treat, but you can have premium pricing and make it very attractive for investors to invest in smaller niche markets.

MA: How was funding impacted at study sites?

PG: At the emergence of the pandemic, everything shut down, and many of the clinical sites, which are associated with world-renowned institutions or smaller institutions, stopped. They had to repurpose their staff to take care of COVID patients; they halted elective surgeries and research activities that brought funding to those institutions. We saw a re-shifting of the personnel to take care of COVID 19 infected patients. And then the institutions were not taking on complex early-stage studies or phase one safety type studies due to staffing issues. Instead, they prioritized late-stage trials or trials for drugs that already had shown benefit. Then, as things relaxed in the summer, we saw research activities pick up with staff being brought back to the hospital to work on research. We saw an increase in decentralized methods such as telemedicine, telehealth visits, and foregoing some blood sample collection for laboratory and exploratory assessments.

MA: Now that the clinical trials industry changed and the way we run clinical trials has changed, what plans are you seeing being made to anticipate changes and expectations in the future?

PG: We are going to see an increase in the use of decentralized clinical trials. This was already happening, but the pandemic pushed its implementation. The pandemic will modify the way we conduct the trials; reducing the number of on-site visits, incorporating telemedicine into the trials, allowing patients to visit an external lab that’s close to their home, that they can go and they can hto have blood samples drawn, which are subsequently shipped to a central laboratory.

Additionally, what’s interesting is the way the regulators stepped up their game to do things differently than what they’ve done in the past. They allowed deviations such as missed visits due to COVID-19 as long as the reason was documented. Also, they allowed rolling regulatory submissions for IND dossiers for COVID-19 treatments; This change will impact how we conduct trials, collect the data, and when to engage agencies in discussions. 

Moreover, the collaboration that was displayed among the pharma industry was exceptional. Because of that collaboration, having one company manufacture another company’s drug to help facilitate getting enough doses has shifted the conversation. We saw how collaboration can result in very positive outcomes during the pandemic, such as reducing timelines and developing drugs faster. I would hope that these types of partnerships continue to scale, so we can continue to develop novel therapeutics at an even faster pace.

Moe Alsumidaie, MBA, MSF, is a thought leader and expert in the application of business analytics toward clinical trials, and Editorial Advisory Board member for and regular contributor to Applied Clinical Trials.