A new generation of philanthropists, whose wealth was created via entrepreneurship in technology-driven fields, has the unique opportunity to make a real difference in speeding the pace of progress in the fight against cancer. Not content with having hospital pavilions named for them or with giving large, open-ended gifts for academic research, they want to use their wealth to have a direct and visible impact on patients’ health. Research we have conducted has revealed a variety of new, highly impactful investment approaches that can help accelerate the pace of the development, approval, and commercialization of new cancer therapies. By embracing these new approaches this new generation of philanthropists has the opportunity to truly help cure cancer.
The results-oriented attitude of the new generation of philanthropists couldn’t have come at a better time. Rapid advances in precision medicine and immunotherapy are ushering in a new era in the treatment and cure of many cancers. And new approaches to philanthropy, often termed impact investing, have emerged as a path to meet their goals. As part of our work with the Harvard Business School-Kraft Precision Medicine Accelerator, funded by a $20 million gift from the Robert and Myra Kraft Family Foundation, we have been studying these approaches. It is our belief that they have the potential to dramatically speed the pace at which more and more cancers are either cured or become chronic, rather than deadly, conditions.
Three big ideas underlie these new approaches: precision medicine, disease-focused investing, and investing at scale. Precision medicine refers to delivering the right medicine to the right patient, at the right time, and in the right sequence. It can only be realized when the scientific understanding of a particular cancer includes knowledge of the genetic and molecular aberrations that that are causing the disease. Once the science reaches this point, the chances of creating a disease-modifying therapy go way up. To illustrate, 10 years ago personalized medicines accounted for less than 10% of the U.S. Food and Drug Administration’s drug approvals. By 2017, that number had increased to 34% and is heading to over 40% this year.
The improved odds of success in drug discovery are providing new opportunities for donors to back what has become known as venture philanthropy. In this approach, drug discovery is developed around a specific disease and is financed by the efforts of a disease-focused foundation. For example, it was the venture philanthropy of the Cystic Fibrosis Foundation that allowed Vertex Pharmaceuticals to refine and test the drugs that have resulted in three FDA-approved treatments that enable 90% of CF patients to live symptom free. Because CF is a relatively rare disease, affecting roughly 70,000 people worldwide, pharmaceutical companies were unwilling to invest in potential cures. But that didn’t stop the Cystic Fibrosis Foundation which raised over $200 million specifically earmarked as venture philanthropy to back drug-discovery and clinical-trial efforts. As Josh Boger, the founder of Vertex, has stated, “Without Cystic Fibrosis Foundation funding, Vertex would not be in CF.”
This same approach offers an enormous opportunity in the cancer space. What is needed are many investments aimed at the different underlying causes of each specific cancer type. While this creates concentration risks, which are typically avoided by venture funds, they are precisely what disease foundations should be doing and where the new generation of philanthropists can make an enormous difference by taking on one particular type of cancer.
One timely example illustrates the point. Senator John McCain recently died from glioblastoma, a relatively rare but very deadly form of brain cancer. Ted Kennedy and Beau Biden, former Vice President Joe Biden’s son, died from the same disease. Treatments to cure or modify glioblastoma could come from a large, say $150 million, venture philanthropy fund whose only mission is to identify and fund start-up companies with a variety of approaches to conquering this disease. Developing such funds — be it in glioblastoma, ovarian cancer, or any of the other less-common cancers for which no effective treatments exist — is a unique opportunity for young and older philanthropists who want to see their dollars create cures.
While venture philanthropy funds represent a way to invest at scale in a particular cancer, larger funds are beginning to emerge that invest at much greater scale in a broader range of cancers. Andrew Lo, a finance professor at MIT, has been a trailblazer in this area. Armed with numerous simulations, Lo has argued that a large megafund of investments in cancer companies could not only help find cures but also produce more predictable returns for investors.