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Delaware biotech companies face ‘careful navigation’ to success

Katie Tabeling
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To continue to develop cutting-edge treatments to cure cancer and other serious issues, Delaware's bioscience companies look for the best team possible and those who believe in their mission.

Prelude Therapeutics is driven to deliver best-in-class cancer therapeutics, which means it needs the best team in its labs, c-suites and board room. |DBT PHOTO COURTESY OF MICHAEL BRANSCOM/PRELUCE THERAPUTICS

A patient once told Kris Vaddi that they waited outside for the FedEx truck to stop and make a delivery of extremely precious cargo: a drug treatment.

“She would wait for the delivery so she could put it in her arm and just look at it, thinking ‘this is going to change my life,’” he said.

Vaddi has moved on from that company, but that patient’s story has stuck with him even today as he leads Prelude Therapeutics. Earlier this month, he cut the ribbon on Prelude’s headquarters and research lab at the Chestnut Run Innovation & Science Park, signaling a new chapter for the cancer drug development firm.

“This building came from a vision that we want to put patients first— and what gets me excited is being able to offer new medicines that we are discovering and developing. The goal is to advance toward clinical trials for the first patient in milestone, and to me approaching that date is really about the patient waiting to receive a drug that could be their only hope,” he said.

The journey for rising and mid-stage cancer drug manufacturers or pharmaceutical firms to offer life-changing treatments is not an easy one for founders to walk. Biotechnology and life science companies have long fought against long development cycles and a high need for capital to fuel innovation.

On a larger scale, companies like Pzfier spent $10.7 billion in internal research last year. Delaware publicly-traded companies like Incyte has planned 10 new products in its pipeline by 2030 and spent millions in research and development in the last year.

But many like Vaddi have found that the journey can be made with careful navigation, guided by the same vision from all parties: founders, staff, researchers and investors. The starting point must be driven by an idea, and at Prelude, it’s about developing drugs for underserved cancer patients with best-in-class therapies. And the team behind it — be it at the board room or in the lab — must all share that goal, no matter how long it takes.

“I’ve found that good ideas are much more fundamental to success because that is where investors will gravitate toward,” he said. “It’s also about having the right team that can make the decisions along the way so you’re not wasting resources on the bad.”

“There’s a lot of people who can come up with an idea, but you need to have the resources in place to shepard those ideas from potential molecules, to clinical candidates to commercialized products,” he added.

Lay of the land

With potential scientific breakthroughs on the line, early to mid-stage companies in Delaware are all on the hunt for supporters to back their work. Deloitte estimated the development of a single new drug costs about $2.3 billion, and the United States Food and Drug Administration (FDA) process can take roughly 10 years from the first trial to final approval.

Over the last few years, investors have been more risk-averse in early stage companies, particularly in the short-term. The Pitchbook and the National Venture Capital Association reported that deal-making slowed down last year for the biotechnology sector, with a quarter less funding committed from venture firms. 

In the biopharma sector, venture firms invested $18.4 billion across 481 deals last year, according to the report. Pitchbook analysts found that 40% of the deals made in 2023 were in later-stage drug companies, signaling firms are not looking to invest heavily in the preclinical work needed to even come out the gate.

For companies that aren’t public, it’s the No. 1 priority to identify and secure investment from funds that are knowledgeable about the market and have the patience and interest in a long-term investment, Delaware BioScience Association President Michael Fleming said.

“The whole process can take a very long time to even see read-outs and how effective these treatments are,” Fleming added. “With investors becoming very cautious about short-term funding, it’s created a real pressure for these companies that need the funding to invest and advance medicine that can be real game-changers. So you really need people who are knowledgeable about the process to be involved.”

Some biotech companies have considered scaling back clinicals and making strategic decisions on projects and securing resources. One option to secure funds is to go public on the stock market. Recently, Prelude closed out a $25 million share sale to help support its pipeline of therapies like  PRT3789, a selective degrader that targets cancer cells without damaging healthy cells.

At one point, Vaddi was involved in three start-ups, not including his time at Incyte, and he’s seen many others succeed and fail. For him, the key elements to success are having many innovative ideas in the works and a capable management team with a proven track record. Without the support of a strong team, many ideas can die on the vine.

“We’re already in a high-risk category because we want to do transformative work to give hope to patients that don’t have options, not what’s convenient,” Vaddi said. “The bigger the company, the more people you have doing the same job, and that’s something to avoid. And I find that with a team, we all have the same reason why we want to work at Prelude. It’s something I talk with all my managers and I used to with our employees.”

Small state, big dreams

There are some signs the clouds are parting for founders when it comes to finding the money to fuel their work. The XBI biotech stock index bounced back in February, rising 15% in the month. But some of Delaware’s start-up founders are still looking to make their dreams happen and it can be difficult in a small state stacked against the Philadelphia region.

A bigger region could mean more competition for talent, partnerships and funding. But others like Irene Rombel, the founder of BioCurie, have found the opportunities are still here. She was thinking about relocating to other “Cellicon Valley” markets like Boston or Philadelphia, but found that the talent pool is surprisingly deep in the First State to keep her here.

Irene Rombel successfully landed a spot in the Cure Xchange Challenge to boost her company BioCurie in February. | PHOTO COURTESY OF APCO WORLDWIDE

That includes tapping into those here for the National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL), University of Delaware and other higher education partners for life science companies.

“I’ve been able to hire a lot of local, high-caliber talent including interns from UD and Del Tech,” she said, noting that BioCurie’s head of product engineering is a recent UD graduate. “With a small company, you can get exposure and more responsibility in working on a commercial product, compared to what you can with a larger company.”

BioCurie is developing artificial intelligence that aims to use algorithms and software for gene therapy production to find the optimal process to expedite potential treatments – and lower production costs. It’s an idea that has already landed a $100,000 Delaware EDGE Grant last year – and recently winning a spot in the cohort at Cure Xchange Challenge in New York City. As one of ten finalists, BioCurie has access to $1 million in seed funding and in-kind resources as well as access to the life science lab’s network.

“I think this will open a lot of doors for us, because Cure represents a who’s who of people in the health care industry,” Rombel told DBT. “I see myself commuting there at least once a week because it’s all about who you bump into. The more time I spend there, the higher chance I have to bump into great people.”

Elsewhere, Cellergy Pharma President Ron Dudek has licensed technology from Nemours Children’s Hospital to work on cellular immunotherapies that target a subset of B cells that trigger allergic asthma and food allergies. The privately held company was awarded $300,000 by the National Institute of Allergy and Infectious Diseases last month, which will help it move into the Innovation Space.

“Part of the challenge I’ve found is educating the investor community about the value of antibodies to treat severe allergic asthma, because the there’s products that have reduced symptoms. But they’re not cures. And there are thousands of people who struggle with severe asthma,”  he said.

But otherwise, he’s found that Delaware has an air of optimism when it comes to the start-up community, buoyed by state grant programs and local colleges and research hospitals. With the small size, it’s also easy to get in front of state and federal representatives to make the case for grant applications when needed.

“Everyone I’ve met is enthusiastic and wants to help make it happen. We’re proud to be part of building a biotech ecosystem in Delaware,” he said.

 

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