Novo Holdings has changed the scope of its REPAIR Impact Fund to enable it to bankroll antibiotics for longer. REPAIR began life focused on projects between lead optimization and phase 1, but, in light of the tough funding environment for anti-infectives, will now support programs into phase 2.
Denmark’s Novo, the holding company for Novo Nordisk, set up the $165 million (€147 million) fund two years ago to provide early-stage funding for drugs and vaccines against resistant microorganisms. The focus reflected a belief that a funding gap existed between lead optimization and phase 1. Now, having invested $48 million in eight companies, Novo has identified a later-stage funding problem.
Aleks Engel, director of REPAIR fund, outlined the gap and his response to it in a statement: “Based on experiences to date, we may slow down our early investments slightly in order to potentially advance projects further.”
In practice, that will mean REPAIR keeps some money back to support phase 2 trials run by some of its portfolio companies. Without support from REPAIR, the fund’s portfolio companies could struggle to raise money for phase 2 trials if other investors divert money away from the sector in response to the commercial difficulties faced by companies such as Achaogen and Melinta Therapeutics.
Even after the change in focus, the period between lead optimization and phase 1 remains the sweet spot for REPAIR. The fund began 2020 by unveiling investments in two more biotechs with programs in that sweet spot.
REPAIR invested €7 million in Mutabilis, a French biotech that is currently putting a wide spectrum Gram-negative anti-infective agent through lead optimization. The other investment funneled $3.9 million to Maryland-based IBT Vaccines to fund work on a preclinical-stage Staphylococcus aureus vaccine.