#AseBioID24 | Claves del ecosistema biotech vasco que refuerzan el potencial del AseBio Investor Day 2024: “San Sebastián es una ciudad de ciencia e investigación”

Asebio

06 May 2024

R&D is the central axis of any biotechnology company. These companies face significant challenges when it comes to obtaining financing to develop their disruptive innovations, characterized by long cycles, the need for significant investment volumes, and high risk. Additionally, biotechnology companies operate in highly regulated and complex markets.

This scenario will be examined on May 15, 2024, in San Sebastián (Donostia) during the celebration of AseBio Investor Day, a meeting point between prominent national and international investors and biotechnology companies.

David Roberto García, CFO of Laminar Pharma, Silver Sponsor of AseBio Investor Day 2024, outlines throughout these lines the main challenges that the company has had to face with the development of LAM561, a clinical phase treatment they are developing against glioblastoma.

AseBio: Access to financing is a cornerstone of the biotechnology sector, where most companies are SMEs with disruptive R&D projects that require substantial investments and prolonged timelines before yielding their first marketable results. What are the main challenges you have faced in terms of financing?

David Roberto García: I don't think I'm surprising anyone by saying that financing is the main challenge for a biotech company like Laminar. Our company was founded in 2006, and since then, we have been developing our main compound, LAM561, which we hope will obtain marketing authorization for the treatment of glioblastoma multiforme in less than a year. That means 18 years without sales and investing in R&D.

The biggest challenge in our case has been finding support from large venture capital funds, which still perceive the project as risky even now in phase 3 with indications of efficacy and the potential to become the first approved drug for glioblastoma in 19 years. Like any project in any sector, there is risk, but our case is paradoxical; currently, we have more than 2500 individual investors who are assuming the risk and trusting us in every round of funding. The estimated resources needed to complete the project have been drastically reduced, but it still poses a challenge for a fund to share the reduced risk. Is there a need for a change in mindset in the sector?

AseBio: Financing enables disruptive innovations like LAM561, the clinical-phase treatment you are developing against glioblastoma, to translate into tangible benefits for society. What has been the development process for this?

David Roberto García: It's been a long but always exciting process. From the first designs and sketches of the molecule on paper, its initial synthesis, testing in in vitro experiments, many, many in vitro experiments, observing that it was capable of reducing tumor volume in animals... to the first clinical studies in humans. How quickly can 18 years of work be summarized?

Like all long journeys, there have been steep hills, obstacles, challenges, rewards, and quieter stages, but fortunately, we can say that we are still walking towards an increasingly closer goal. And it's a pleasure to keep walking with the team we have at Laminar.

AseBio: You recently closed a funding round of 9 million euros. What has it meant? What are the next steps?

David Roberto García: The successful closure of that round has been a great breath of fresh air, but we must keep breathing. As the project approaches its final stages, there are higher associated costs, so we cannot relax in the search for funding. In fact, we have opened a funding round of up to 7 million to complete the project's financing. Undoubtedly, being able to close a round of such magnitude in a delicate economic ecosystem has shown us that more and more people are aware of our project and eager to be part of it. We are happy to see that people increasingly see investing in biotechnology as a good opportunity economically, while also contributing to societal development.

The next step is the upcoming interim analysis after the summer, where the first open data reading of the trial will be conducted. If the data are positive, we can apply for marketing authorization, and then for the first time, patients will be able to benefit from LAM561 outside of a clinical trial. That would be the goal that would make us happiest at Laminar.

AseBio: From your experience, what aspects should be improved or strengthened in Spain to facilitate the financing of biotechnological innovation?

David Roberto García: We believe that the area with the most room for improvement is private financing, specifically changing the concept of risk. Once the solidity of a scientific project, which has received institutional support and public funding based on competitive programs, is demonstrated, we believe it should be easier to access support from large private capital.

As we have already mentioned, it must be understood that while these projects certainly carry risks, the social benefit derived from them and their great economic potential should allow for the acceptance of those risks. Biotechnology companies that have been operating at a loss for years cannot be expected to provide guarantees, collateral, and other forms of ensuring the success of an investment. All investors know that the potential benefit of an investment is tied to its potential risk of failure, and we accept that risk when we invest. We understand it's a business, but if an individual assumes risk when investing in a mutual fund, for example, without any guarantees, shouldn't large capitals, with greater resources and knowledge, be able to assume the same risk without guarantees?

AseBio: In this regard, what role does public investment play compared to private investment?

David Roberto García: Public funding is essential because, based on criteria of excellence and competitiveness, it is often provided as grants or under favorable conditions for the company. It's a type of funding that is undoubtedly crucial for the initial stages and can even be important for more advanced stages. We ourselves were fortunate (and deservedly so) to obtain over 6 million euros in funding from the European Union (H2020) to develop our phase 2b/3 clinical study.

However, unfortunately, public funding is not sufficient, and it always needs to be successfully combined with private funding, whose criteria are always more "diffuse" as they depend solely on each investing company. It's definitely a whole different world!

AseBio: The AseBio Investor Day stands out as one of the most important meeting points between investors and biotechnology companies, with innovation as a common thread. What opportunities does an event like this offer?

David Roberto García: These types of events are essential, considering how difficult it usually is to access financing. You have to knock on as many doors as possible, and an event like this allows you to do so in a simple and efficient way. And there's something we believe is even more important: it allows you to do it face-to-face.

Many times, the decision-making process will depend on the investor's trust in the team they are investing in, and for that, it's essential to get to know each other, and there's nothing like doing it in person. Additionally, the fact that there's a possibility to present the company to the entire audience helps capture the interest of those who might not be initially interested.

AseBio: What do you expect from participating in an event like this?

David Roberto García: Well, this time we are attending for the first time as sponsors, so we are especially excited. We go with the idea of conveying the message that the project continues to progress and is getting closer to our final goal, approval by regulatory agencies. Since we have an open round of funding, our goal will be to meet with different investors interested in the project and see if we can somehow find a scenario where both parties benefit, so that ultimately patients can benefit. It's sure to be a very interesting few days!

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