"Two thirds of the floor space here in Atlas’s office is incubator space for six to eight nascent companies with the expectation that in six to 12 months they outgrow that space and launch elsewhere nearby."

Michael Gladstone

PRINCIPAL, ATLAS VENTURE

May 14, 2020

Can you provide an overview of Atlas Venture’s current portfolio and the approach you take to investing?

Our company-building approach is flexible and allows us to customize the business model for the science rather than the other way around. We are investing now out of our 11th fund, which is a US$350 million closed-end fund. We have a separate vehicle, a US$250 million opportunities fund which is a vehicle to invest in the Series B and later rounds of our existing portfolio companies as they grow and mature. A big part of our strategy in being an early stage investor is venture creation. We are helping to form and build many companies we invest in – at least two-thirds of our companies are ones where we work together with academic or industry experienced entrepreneurs to form and launch and often initially incubate in our office. To support that, two thirds of the floor space here in Atlas’s office is incubator space for six to eight nascent companies with the expectation that in six to 12 months they outgrow that space and launch elsewhere nearby.

Is the recent success of the biotech sector more a product of the long-term bull market that we are experiencing or is it reflective of the maturing of the sector?

The last six to eight years have been great for healthcare and biotech. Underlying that are real secular changes in drug discovery and development. We are reaping the benefits of the genomics boom in the early 2000s, which yielded new drug targets, coupled with many new tools at our disposal to make drugs and to evaluate biology. Overall, the tools and information at our disposal are at a dramatically different place than they were 20 years ago, which has contributed to many transformative new drug approvals and strong capital market performance for the companies delivering those drugs.

How much of the value being driven from the industry is coming from innovative and novel drug therapies?

It is more important than ever to arrive early in a new class of drugs. It used to be that if you were the first to market in your therapeutic class, you might have that class to yourself for five to 10 years. But that period is shrinking, and now you can have several players in the same product space within a few years. Often, a disproportionate share of the market goes to the group that arrives first or second or comes in with a dramatically differentiated product. This competition and the sense of urgency it provides is a great thing for patients, and it makes it more important than ever for biotechs and pharma to address outstanding unmet needs. Showing up late with an undifferentiated product is unlikely to be commercially viable.

Regarding Covid-19, what is the timeline to bring a therapeutic to market. How does this compare to the typical timeline?

It can typically can take anywhere from two to six years to go from starting a program from being ready to enter human clinical trials. The typical timeline from clinical entry to FDA approval can be somewhere between four to 10 years. Obviously we’d like to have effective coronavirus therapies and vaccines much sooner than that, and companies and regulators are working hard to streamline this path in light of the urgent medical need.

The fastest opportunity for Covid19 is probably to repurpose existing drugs, such as antivirals or anti-inflammatories, to determine if they have clinical benefit in Covid19 infection. If you have a drug that is relatively safe in humans and you have an idea of what dose to give, repurposing it to be able to do a rapid clinical study in coronavirus is relatively quick. The road is likely longer to establish the safety and efficacy for novel therapies, such as vaccines or neutralizing antibodies, but there is already tremendous progress being made very rapidly, and multiple novel drug candidates from these classes could be in clinical trials within 2020.

What areas are primed to make the biggest breakthroughs?

There has been an explosion of new modalities, things like cell therapy, gene therapy, oligonucleotides, and targeted protein degradation. As we learn more about the genetic underpinning of diseases, these novel tools will increasingly be a powerful and direct way to directly address the central cause of many illnesses.

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