Milestone-based venture philanthropy with royalties recycled into the pipeline
Cancer charities would fund companies to hit specific development milestones, as the cystic fibrosis charity did to create Kalydeco, and take a royalty they reinvest in the next drug.
Disease foundations move from grant-giving to milestone-based development contracts with biotech and pharma: payments are released on defined preclinical and clinical milestones for an agreed indication (for example a rare sarcoma, a paediatric brain tumour, cachexia), the foundation receives royalties or equity, and returns are recycled. The Cystic Fibrosis Foundation's investment in Vertex produced ivacaftor and returned more than $3 billion through a royalty sale; the Leukemia and Lymphoma Society's Therapy Acceleration Program and the Multiple Myeloma Research Foundation have applied versions of this in blood cancers. Solid tumours and paediatric cancers have few such programmes at scale.
- The valley of death between lab and product · Most academic discoveries die before anyone tests them in people because nobody funds the middle step.
- Rare and paediatric cancers without markets · Taken together rare cancers are a fifth of all cancers, but each one alone is too small for a company to invest in.