This Is How We Solve Long Covid.

How Venture Philanthropy Might Help.

Cystic Fibrosis life expectancy has almost doubled in 20 years.

FDA treatments are now approved, and quality of life is much better.

All because of a strategy called venture philanthropy.

Here's what we can learn from the Cystic Fibrosis Foundation.

This might just be how we solve Long Covid & ME/CFS too.

Intro

In this article I hope to provide an overview of what venture philanthropy is, how its been used effectively by the Cystic Fibrosis Foundation, and how we might use a similar approach to find effective treatments for Long Covid & ME/CFS.

I will also provide a roadmap of what I believe are some of the steps that will take us from where we are now, to a world full of awareness, treatments, and an end to millions suffering.

I’ll be covering the following:

• What is Cystic Fibrosis?

• What is Venture Philanthropy?

• Venture Philanthropy Agreement Structure

• Benefits For Pharma Companies and why they would be interested

• Success for Cystic Fibrosis

• Potential Issues

• What Long Covid & ME/CFS can learn

Let’s dive in.

1. What is Cystic Fibrosis?

Cystic Fibrosis is a genetic condition that affects ~ 100k people worldwide. It is caused by a faulty gene that affects the movement of salt and water in and out of cells. This, along with recurrent infections, can result in a build-up of thick, sticky mucus in the body's tubes and passageways – particularly the lungs and digestive system.

Back in 1998, the average life expectancy for someone with Cystic Fibrosis was just 32.

However, things have changed; Children born with Cystic Fibrosis in 2021 are expected to live to 56, with 50% reaching 65.

There are multiple FDA approved drugs now, and there is a whole host of trials under way for further exciting research.

But how did we get here?

2. Venture Philanthropy

Venture Philanthropy is a model, where non-profits invest into research projects.

It essentially is a model of Venture Capital, but with a mission to deliver on treatments, rather than profits. Let me explain:

In venture capital, a number of investors will invest their money into a venture capital ‘fund’. Lets keep things simple and say we have 10 investors, all putting £100 each → giving us a total fund of £1000.

The money from the fund is then invested across a variety of different companies. Because venture capital often invests into early stage companies, they spread their investments across a large number of companies, many of which will fail, but hoping for that one big payout (uber, Air BnB etc.)

Let’s say the fund was split across 10 investments, with £100 invested in each. Quite likely is that most will fail (let’s say 9/10 do) which means we lose our £100 investment into each of them. Yikes, we’re down £900! :(

But thankfully one of our investments came through! One of the companies grew massively and we got a return of 20x our investment (£2000).

That means we doubled our money and we can payout our initial investors. Awesome!

Now Venture Philanthropy is interesting because rather than using and spending donations on select projects, with no money to come after, it uses this money in a similar way to venture capital.

Let’s say we received a £5 million donation.

Rather than spending this donation as a grant to a research project (or even number of research projects), this donation would be invested into a variety of different projects with the hope that one of these would return big time, allowing us to reinvest more money, again.

Example:

Certain diseases like Cystic Fibrosis realised the power of such a model and so their venture philanthropy organisation was created.

Investments have the potential to make big returns, which can then be reinvested in more research and developing further treatments.

For example, in 2014 CFF sold royalties for $3.3B, from a mere $40M investment.

This is not an overnight success, but if we want to think high-impact for Long Covid and ME/CFS, we need to think long term as well.

This seems a higher-impact way to use our grants and charitable donations.

2.1 External Investors

Another benefits of such a model for these types of illnesses, is that it can in turn attract even more investment from external investors.

Let’s take the T1D fund for example, aimed at tackling Type 1 diabetes, a disease that affects over 20 million globally.

As shown below, to date, the T1D Philanthropic Fund has raised and invested about $70 million—in large increments from high net worth individuals. The T1D Fund has in turn attracted almost $400 million in private investment, mainly from life sciences VC firms. Since its inception, private investors, investing alongside the T1D fund, have provided leverage of almost 6X.

An overview of the spread of investments from both the T1D fund, private investors and the leverage achieved.

As you can see, by demonstrating an investment strategy as an organisation, there is the potential to persuade external investors that there’s something worth taking a chance on here too! The results can be huge, like the example above, with another $391M going into the area (6x what the foundation could produce).

3. VP Agreement Structure

I won’t go into too much detail, but I will give a brief overview of some aspects of the agreement structures that such venture philanthropy foundations use.

Royalty Interests'

Unlike regular investments, where an equity % of the company is obtained through investment, the foundation obtains royalty interests instead. Rather than owning a percentage of the company, the foundation takes a % of the product revenue, should the drug be successful and become commercially available.

This helps to keep the priority being on successful treatments, not a specific companies success.

Interruption License

Unlike conventional VC, the foundation holds what is known as an interruption license. In simple terms, this means that if the company they are invested in switches away from developing said drug, they are entitled to take ownership of the drugs assets.

This license enables the foundation to take ownership of any assets, should the company decide to shelve or cease developing the drug (due to funds, changing interests etc.). This means prior development isn’t wasted.

This negates risk if the company decides to change track.

For a full breakdown of the interruption license, see this report.

4. Benefits for Pharma Companies

For biopharma companies, financing from a disease-focused nonprofit is attractive for a number of financial and non-financial reasons.

Low-cost, non-dilutive capital

Low-cost, non-dilutive capital: Agreement is more attractive than usual funding (don't lose equity, less involvement from investors)

The capital provided by disease-based non-profits like the Cystic Fibrosis Foundation (CFF) is typically less encumbersome than traditional VC funding. Rather than giving up equity, returns are delivered in the form of royalties from future sales of the drug, should it be successful. There’s also less ‘involvement’ from the investors. The company can focus more time developing the product, and less appeasing the board every 2 weeks.

For biopharma, the bar to invest in development is lowered, as they are incentivised to pursue programs with higher risk but higher reward than they might otherwise be able to sustain.

All without having to give up an equity stake.

Resources & Expertise

The attractions are not only financial however.

Foundations like the CFF brings extensive, non-financial resources and expertise to the drug development process. They have a scientific team to help interpret clinical data and improve study design, as well as a network giving them the ability to run clinical trials quickly.

Depending on its stake in a particular program, members of the CFF may attend periodic research meetings or participate on scientific advisory committees to provide insight into the disease.

Patient Community

The Cystic Fibrosis patient community was one that was rather neglected, but engaged.

Access to an ecosystem of engaged and willing patients of the condition provides yet another benefit for the biopharma firms who receive investment. A centralised organisation with extensive relationships with its patient community is invaluable for biopharma companies to gain insights and participation, that would otherwise not be readily available.

Data

Another vital benefit to working with the foundation is the access to data.

The CFF has been continually collecting data for years thanks to its extensive data registry and a highly engaged patient community.

Such data can significantly lower the risk of the development process, especially during the early stages as it allows companies instant access to an abundance of data they can use to point their research and need not repeat.

We find ourselves in a rather similar situation with Long Covid & ME/CFS. Despite a dire lack of clinical trials, we actually have a large quantity of data gathered over the years. We also have a particularly engaged patient community on whom we can call on to assist with such data collection and research.

Companies such as Eureka, Visible and studies like DecodeME entail a tonne of data that could be centralised for use as described above in the CFF.

5. Success for Cystic Fibrosis

Since the Venture Philanthropy arm was created in 1998:

• Life expectancy nearly doubled in 20 years.

• $225 million invested EVERY year.

• Multiple effective FDA approved therapies

The success of the Cystic Fibrosis Foundation has been nothing short of remarkable, and has paved the way for a number of other such foundations, setting forth a blueprint for other nonprofits in other diseases to follow a similar path.

We can see below the drug pipeline for various Cystic Fibrosis therapies, and their stages in the drug development process. The sheer quantity of trials is nothing short of impressive.

6. Potential Difficulties

The whole point of this article has been to show how an excellently executed strategy has produced incredible results for another, neglected illness, and how Long Covid & ME/CFS can learn from this too.

This isn’t to say that the road for ME/CFS will be identical however, nor will it be without challenges, some of which are listed below.

1. Biomarkers

Cystic Fibrosis was in the *somewhat* fortunate position that a clear biomarker was available. The Venture Philanthropy model was made possible by the fact that many years of research had gone into the disease prior and had identified genetic modifications that could be targeted.

When the Cystic Fibrosis Foundation venture philanthropy arm was formed, they had the benefit of having decades of research, revealing a huge amount on the mechanisms of Cystic Fibrosis.

These prior decades advancing the basic science of the condition led to a comprehensive understanding of the biology of CF, which later led to the identification of the CFTR gene and potential therapeutic targets.

Biopharma require a foundational understanding of the condition in order to conduct translational medicine and so this must be the first stop for Long Covid & ME/CFS.

As our understanding of the illness and number of potential therapeutic targets increases, a greater proportion of funding can be directed at therapeutics, as has been done by the venture arm of the CFF.

Above shows the Cystic Fibrosis Foundations funding for both research grants and therapeutics over the years. As research reveals more about the disease, a greater proportion of funding goes towards therapeutics.

2. A step back

As outlined above, an understanding of mechanisms is imperative for incentivising pharma to invest in developing treatments.

But a current lack of a biomarker doesn’t mean we can’t do anything.

With no treatments and little research on EB, EB Research founded ‘Venture into cures’.

Put simply, they go out and fund relevant, promising research at universities in exchange for IP rights and/ or a royalty share. When/ if these projects gain commercial success, the returns from the shares will be plowed back into more research projects, making every dollar count, time and time again.

As their chairman stated - “This was effective in that it secured a seat at the table when the IP moved from academic to commercial settings.”

As also stated above, over time, as we learn more about the disease, we can switch the proportion of investment from more research heavy projects, to those devloping therapeutics.

For Long Covid & ME/CFS, this will allow us first to target finding a mechanism, and then invest in potential therapeutics as we progress.

3. Initial Capital

In order for a project similar to the CFFF to get off the ground, a large investment of initial capital is required, a barrier that should not be overlooked.

In order for Long Covid and ME/CFS to initiate such a philanthropic fund, we will need professional, charitable organisations that develop a large fundraising capacity.

The current state of affairs is not particularly promising, with ME/CFS raising & some of the lowest amounts per person with the illness, but with the sheer scale of the illness, and with proper structure and marketing, these organisations could follow a similar road as those such as Mind, Cancer Research, Cystic Fibrosis Trust etc.

(More on this to come in a future article)

4. Communication

Communication and engaging patient communities can often be a slight blocker and take time, but Long Covid & ME/CFS actually have the benefit of having a highly engaged patient community. One issue is that many sufferers are in fact to ill to take part or spread awareness, so ensuring the organisation and other work is communicated effectively will be something to bear in mind.

5. Pricing

One downside to note that comes as a result of the royalties model is an inability for the foundation to set drug prices or influence biopharmas commercial plans once a drug reaches the market.

Helping to fund treatments is all well and good unless those that need them are unable to afford them. This is a challenge that foundations will have to tackle by engaging with insurers, supporting patients and more.

The hope is also that accelerating the development of additional drugs will create a more competitive environment that will drive prices down.

A Roadmap for Long Covid & ME/CFS

Below I outline how a roadmap might look in our journey to a cure. This is a brief outline how how it may look based on my research and observations of how other organisations have done it.

This is open to editing and undoubtedly will change, but I hope to provide a basis for how we may get started.

1. Establish a credible charitable organisation

We need a centralised, reputable charitable organisation as a central hub from which the fund can operate. Much like the Cystic Fibrosis Foundation, Cancer research etc.

Such an organisation, a professional outfit that operates like a business will gain credibility amongst both government and investors and allow us to operate in an agile and aggressive way.

This organisation will be able to raise funds effectively like other charities do, and act as a credible point of contact for philanthropic investors and lobbying in governments. This organisation needs to be run like a business, with effective onboarding flows for prospective donors, marketing campaigns, and real direction.

2. Establish a centralised scientific board

The Scientific Advisory Board would be made up of leading doctors, scientists, and researchers. The Board’s expertise would span everything from Long Covid & ME/CFS to viral studies, genetics, rare diseases, and clinical trial development.

The board would evaluate and score every project we fund, offering guidance so that we can focus on projects that can put treatments into the hands of patients within the foreseeable future.

The board would be able to make decisions on which mechanisms are most likely to hold clues, and direct the organisation accordingly.

3. Build a strong community

This is one thing that we have to our advantage already. The Long Covid & ME/CFS community are thoroughly engaged, as indicated by participation in mass studies such. has Decode ME and the use of symptom tracking apps like Eureka & Visible.

Providing a centralised organisation with a long term vision will give the community direction, whilst also providing guidance on how to engage others in their life.

Further to this, the community is of great asset when it comes to engaging patients for trials, data seeking and gaining patient insights.

4. Add a venture arm to the organisation

The venture arm of the organisation will need to be a professional, business-run outfit, run by those with experience of working on boards, and overseeing investment projects. This nonprofit drug discovery arm will aim to facilitate drug development contracts, and take us from the initial research phase, through to drug development, much like the Cystic Fibrosis Foundation have done.

The steps of these investment approach may look as follows:

1. Academics

   Invest in a variety of academic research across different universities, private labs etc. to understand more about mechanisms.

2. Private/ Public biotech & pharma

   Start funding public and private companies to see research results commercialised. The funding model would match that described earlier in this article.

3. New company formation

   Much like Cancer research Horizons, the foundation could offer schemes to foster entreupeurial endevours targeting single therapies.

4. Holding company

   Gradually shift weight of investments from research to drug development. As these startups under the holding company requires more and more capital (as they head to clinical trials), the holding company can support them.

5. Ensure future drugs are accessible for all

There is little point developing effective treatments, if they are too expensive to be obtained by those in need.

This barrier to care is a very serious issue that we will have to tackle, and I look to the Cystic Fibrosis Foundation for inspiration. A few things that can help prevent this are as follows:

• Lobby for financial assistance programs for those in financial hardship

• Engage with insurers and government to ensure decisions are made based on QOL improvement, not just profit.

• Establish a free help that helps patients navigate financial, legal, insurance, and other issues.

• Accelerate the development of additional drugs that will create a more competitive environment that will drive prices down

Conclusion

Long Covid and ME/CFS are conditions that affect millions worldwide, and this number is only growing.

Whilst there may be many underlying causes (from microclots to viral persistence, ANS dysregulation), this does not mean it is untreatable.

Although this likely heterogeneity may mean it is initially less attractive to biopharma companies, this doesn’t mean it isn’t viable to treat.

No two diseases are the same, and each will require a different funding strategy. There is a vast spectrum of market sizes and scientific/ commercial understanding of various diseases. There are rare diseases with small market sizes and no treatments. There are also more common diseases with larger markets, some treatments, but no cures. This is not a one-size fits all approach, and we will need to tailor a fund approach to suit that of the illness we are dealing with.

I find it truly inspiring however, that these cure-seeking organisations, for what otherwise seemed incurable illnesses have managed to make meaningful process in driving scientific understanding and finding cures.

It will not be a quick nor easy road, but with the right strategy and commitment, I believe we can do the same.

This article has been a labour of love, but I am certain to have missed some things. Any comments or suggestions would be greatly appreciated, I would love to hear your thoughts!