At the beginning of 2020, I said to the Seventure team, that this would be the ‘Year of the Microbiome’.I still believe this will be true even in a COVID-19 world when our lives have been turned upside down; the way we work, live and function has done a complete 180-degree turn. As a result, there will be an increased focus on health and well-being, which underlines the importance of the microbiome even more.
A decade ago, we only suspected a connection between the gut microbiome and our overall health. Over the last few years, we have seen direct proof of this relationship, supported by the number of microbiome-related patents now nearing8,000…
As a Venture Capital (VC) firm, we have seen a significant increase over the past few years in the number of promising start-ups with focus on the microbiome. Our dedicated Health for Life CapitalTM fund – the first microbiome-focused fund in the world – has attracted a growing interest from a broad range of investors. Our portfolio companies, alongside dozens of other firms in this field, have been reporting success after success, and several Phase II/III clinical trials are already lined up to start or conclude this year.
The COVID-19 pandemic has surprised us all. While it wasn’t entirely unexpected, its impact will be much more significant and long running than one could imagine, for all industries, not only the biotech sector. Clinical trials are being delayed, financing is reduced, priorities are being re-organised – and we are only seeing the tip of the iceberg.
On that premise, while the COVID-19 pandemic requires us to reprioritise our lives, one of the main areas that will enjoy increased attention will be our underlying health, i.e. our immune systems, and how we can keep them strong. Extensive research shows that a healthy gut microbiome supports our immune system and how it defends us against new infection.
The microbiome research area is vast – as a small selection, our portfolio embraces companies from those developing therapeutics for oncology, autoimmune or infectious diseases, through those investigating the gut-brain axis to support CNS patients, to firms developing various health products, nutritional food ingredients or offering personalised nutrition services to improve our gut microbiota. The microbiome, be it in our gut, on our skin or in other parts of our body (mouth, lung etc.), has an undeniable impact on our health and increased research is necessary to understand more about these intricate connections, to improve our own health.
The increasing importance of the microbiome has also been shown by the unexpectedly high number of successful financing and re-financing deals our portfolio companies achieved, despite the pandemic situation. MaaT Pharma (€18M Series B), (Citryll ((€18.5 M Series A), BCD Biosciences ($4M seed funding so far); while Enterome (€46.3M), Vedanta, LiMM Therapeutics as well as Siolta all reported successful refinancing deals.
When our first Health for LifeTM fund was launched in 2014, many were skeptical about how successful we would be in finding financing. When it reached EUR 160 million, we created a real stir in the marketplace. We are now raising our second fund, which has already exceeded our initial target of€200 million – despite the current uncertain world.
There are other great signs for the microbiome sector as this year has already seen major M&A transactions and financing. DSM acquired Glycom for €765 million; and recently Gilead and Second Genome announced their cooperation in a deal worth up to USD 1.5 billion. I believe, this is only the beginning of such high-profile deals in this sector.
In addition to these significant deals, we have seen the first positive preliminary results from clinical trials, such as our portfolio company, Vedanta’s Phase I studies for inflammatory bowel disease,Finch’s oral microbiome drug Phase 2 trial for recurrent C. difficile infection, as well as Ferring andRebiotix’s Phase 3 trial results for the same indication.
All these factors together suggest that the microbiome won’t be a temporary fad. At Seventure, we believe that the microbiome will play a crucial role in the long term – it will be a game-changer – as we seek to strengthen our immune systems, in order to prepare us against future epidemics (or pandemics). Where this proves to be the case, so will the financial interest and transactions follow.