The Future of Investments in Immuno-Oncology

The Future of Investments in Immuno-Oncology

As major bio-pharmaceutical innovation focused meetings #Bio and #ASCO are approaching, it is good to look at this past year, which was the record-setting for investment into the bio-pharma sector.  The industry cruised past its previous VC funding record of $7.3 billion, which was set back in 2015, and saw biotechnology companies raise $9.3 billion in 471 deals, according to PitchBook [1]. The sectors growth was bolstered through “mega-deals”, making it the best year out of the last seven when it comes to volume.

From our experience in managing bio-pharmaceutical innovation in the past few years, it seems apparent that venture-backed funding for bio-pharma deals, especially those with immune-therapy like assets, will remain robust in the coming years.

The global cancer immunotherapy market was estimated to be USD 61.9 Billion in 2016 and have a CAGR of 14.0% from 2016 to 2021. Factors such as increasing incidence of cancer and rising healthcare expenditure are driving the growth of this market. [2] Today, Goldman Sachs values the IO market at around USD 140 Billion and predicts it could grow by another USD 100 Billion.

Additionally, more biotechnology companies are pursuing personalized medicine. From 2015 the personalized medicine market has grown an estimated 40% to about USD 1.76 Trillion. It is predicted that in 2020 the market will be worth USD 2.7 Trillion. Scientific progress, particularly around manipulating genes and cells have been astonishing. The pipeline of oncology drugs in clinical development has expanded by 45% over the past decade. [3]

This is very exciting and promising news for patients, but also showcases a significant opportunity for investors.

The attraction of immunotherapy stems partly from the limitations of conventional treatments.  It is estimated that nearly three-quarters of USD 50 Billion spent a year on cancer treatments provides no benefit to the patient [4]. Furthermore, the guidelines for Regulatory Approval can further obstruct a promising therapy’s path to market access. This is a problem we go into further detail in on our post Digital Era of Pharmaceutical R&D.

Many prominent academics and researches worry that much of the inflow of capital into cancer research is chasing similar opportunities. This presents a clear conflict for biotechnology companies looking to differentiate their compound for better out-licensing opportunities.

We see that in the very near future, investment in immuno-therapies will be heavily reliant on the biotechnology company’s ability of proving efficacy through multiple biomarkers other than patient survival rate.

While immune-therapies still have a long process of research and development, they have the potential to radically change the way we approach cancer treatment. Immuno-Oncology is just one of the exciting new innovations that are occurring in the oncology sphere. It seems like everyday a new break through is made and a new compound is discovered. I believe this is one of the most exciting ages of clinical research and I look forward to what the next few years have in store.

Dr. Olga Kubassova, CEO of IAG, Image Analysis Group and Venture Partners 

Share your thoughts about the future of immune therapies and how do you think it will drive the future oncology market! To continue this discussion or learn more about IAG email: contact@ia-grp.com

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