Managing partner of o2h enterprises for the first longevity investment in Five Alarm Bio and the broader challenges facing venture capital investment.
British antiaging biotech startup Five Alarm Bio (FAB) recently closed a seed funding round from investors including Cambridge Angels, Meltwind, O2H Ventures and Syndicateroom. The funding follows a $450,000 Biomedical Catalyst grant from Innovate UK, which was awarded to FAB earlier last year to develop its technology as a treatment for chronic wounds.
Building on the breakthroughs made by its founder, Dr. William Baines, in understanding how age-related chemical damage accumulates in cells and tissues, FAB is developing a small molecule approach aimed at boosting our immunity as we age, ultimately extending our healthy lives. bodies.
A key player involved in orchestrating the round was o2h Ventures. The Cambridge-based investment firm specializes in biotech and FAB is the first longevity-specific investment.
Longevity.Technology: o2h Ventures is part of the o2h group of companies, which also includes contract research services and an incubator for biotech startups. The group aims to nurture and invest in emerging life science and technology companies, biotech startups, small molecule and biologics developers, digital health and software companies. To learn more about o2h and its first investment in longevity, we spoke to Sunil Shah, managing partner of its therapeutics division.
After initially launching in angel investment, o2h Ventures has grown into two funds, both targeting early-stage ventures in the biotech space.
“We invest in pure play drug discovery and therapeutics, where companies are developing assets and looking to develop them into clinical trials or proof of concept,” says Shah. “We also look at companies that have some kind of technology platform, like AI and machine learning and quantum, that are trying to improve the drug discovery process.”
A platform and treatment company
Shah explains that FAB technically fits into both investment categories.
“FAB is essentially developing a platform around a specific area in the antiaging space,” he says. “It also fits as a pure play therapeutics company, but there could be many projects that come off the back of it and lead to the clinic.”
The latest investment will drive further research into FAB’s proprietary approach, testing new compounds for their ability to extend the healthy lifespan of cells in vitro and improve their function in disease-related models. Shah, who has known FAB’s founder for many years, said Bains was instrumental in the decision to make the first investment in o2h’s longevity.
“William is really one of these brilliant, extremely clever people – in terms of science ability, he has it all,” he says. “When he came to me with this idea for a company in the longevity space, I really wanted to get involved. I was already interested in the longevity space but hadn’t invested in the space yet – it was very difficult to find obvious early-stage opportunities to invest in. , which has some kind of translational therapeutic window.”
Insect health duration increased by 40%
Once Bains was able to show positive results in the lab, improving the health of insects by 40% with the test compound, Shah knew it was time to get some proper funding into the company. Recognizing that Bains’ strengths lie more in science than in the day-to-day running of a biotech startup, Shah brought in Dr. Janet Thomas, a pharmaceutical drug discovery and development expert, as CEO.
At the same time, I proposed to invest in the company and brought some other investors as well, he says. “With the seed funding in place, as well as the grant the company won, we are now in the running. Being a full-time CEO means William is fully involved in science – we now have some scientists working with him on biology, with first data expected soon.”
FAB has also received a Kickstarter award from o2h, which aims to provide cost-effective access to a large inventory of chemicals and reagents for synthesis to support the creation of novel IP around chemistry.
Investing in longevity
When it comes to investing in longevity, one of the major concerns for investors like Shah is the opportunity to partner with pharma in the future.
“We always look to invest early, but longevity is a very broad field, and our hope is always to be able to partner with pharma at some point,” he says. “There are many diseases that can be addressed within longevity, so if you can find an indication that can provide a short-term clinical trial in a rare disease, for example, then it becomes more interesting for early-stage investors. Because if you can see a clinical target, That’s something you might be able to share with pharma.”
Of course, says Shah, there are also early-stage longevity investing opportunities from very wealthy individuals.
“There are family offices and high-net-worth individuals that will throw a lot of money into the space because we’re all getting older,” he says. “They have more money, and they want to live longer and healthier. I’m turning 50 next month and I know where they’re coming from!
For some “pure play” longevity companies, Shah suspects it may be easier to get a very high net worth individual for a clinical trial than trying to focus on partnering with big pharma.
“There are many people who will invest in this space, because it may or may not make them money, but they are hoping that it will help them extend their lives,” he says. “There’s a huge amount of interest in the space, but there’s also a lot of noise, so for professional investors like us you really need to show the path to proper scientific, clinical validation and monetization.”
Venture capital is facing challenging times
How does Shah feel about the current state of VC investment after venture capital funding in biotech and longevity declined last year?
“I recently went to meet some of the big LPs in the United States, the big players who invest in biotech funds and other funds in general,” he says. “Company valuations have been hit hard because of Silicon Valley banks and other things, so LPs exposure to venture capital is as high as the asset class. On top of that, interest rates are rising, so they need to allocate money to fixed income.”
Shah says this means LPs are now less likely to make new investments in other VC funds.
“Even though VC funds have money globally today because everyone has been raising their funds over the last few years, if they try to raise more money, I think it’s going to be very, very challenging because LPs are overexposed. If VC funds have been around for the past three or If it doesn’t pick up as it has in the last four years, it will put a further squeeze on VC funding for the next few years.”
On the other hand, says Shah, family offices are still investing, so there is still money for good companies. He also believes that the UK may be somewhat protected from the venture capital hit, partly because valuations in the UK tend to be much less “frothy” than in the US, but also because of other factors.
“We’ve remained very disciplined in our investment approach, and many of our projects are getting their next round of funding, which is really good,” he says. “There are a lot of EIS funds and venture capital trusts in the UK, all of which have raised a lot of money, and are doing very well – they’re paying the money back! These tax efficient funds, I think, are really boosting the UK market and making sure that good companies keep getting funded. .”