Most posts in this blog so far have been about due diligence, expertise and a couple of other topics. One notable exception is the case study where we briefly looked at a company claiming to tell a person's occupation from their photo. But we do have other examples, see below for another case study.
Several months ago, I did a due diligence report on a biotech startup (Avogadro One itself being a startup, we still need day jobs to pay our bills 🙂 ). I cannot name the company, so please excuse the lack of detail. That startup had developed a nanoparticle that can deliver CRISPR and other drugs into specific cells inside a patient's body. They claimed that nanoparticles were safer and more potent than other methods currently in use. Not being a biologist myself, I had to research the technology and check independent sources to see if their claims made sense.
A typical due diligence task is to see who else is working in this field. This helps with several things:
- It shows potential competition. Obviously, all research in this field is very early and there is little competition right now. But knowing the landscape can tell you a lot about future competition. For example, which research centers are active in the industry, which corporations are supporting this research, or what startups are pursuing commercialization. Note that the latter compete for funding, not just customers.
- Conversely, if a company is the only one in a sector, this might be a red flag. Lack of competitors is rare and suspicious and thus warrants deeper research. The presence of other players suggests that it's a valid market.
- Relative strengths and weaknesses of competing technologies. People like to point out their own strengths and other people's weaknesses to prove their technology is better. This helps to validate some claims from the company you are researching.
- Understanding the sector. If you're not an expert in a field, what insiders consider 'common knowledge' might be a revelation to you. Reading relevant articles lets you catch up on some of these things. It won't make you an expert, but at least you can ask targeted questions when you talk to one or to the company.
So I entered nanoparticle drug delivery into our platform to see what comes up. Here is what I ended up with:
- MIT researchers have discovered a way to deliver messenger RNA (mRNA) into cells using polymers called amino-polyesters. (source)
- KAUST scientists have developed a delivery method based on coating the molecular components of CRISPR with sponge-like ensembles of metal ions and organic molecules. (source)
- Researchers from the University of Georgia in Athens are using nanoparticles carrying a drug or a catalyst that release the substances when exposed to a magnetic field. (source)
- MIT researchers used nanoparticles to deliver CRISPR into liver. (source)
- Researchers from Hong Kong Baptist University have developed a delivery method using aptamer-enabled lipopolymer to treat bone cancer. (source)
- Scientists at the University of California, Berkeley, used a gold nanoparticle-based method to cure Duchenne muscular dystrophy in mice. (source)
- Researchers from the University of Massachusetts Amherst have also used nanoparticles to deliver CRISPR tools inside cells. (source)
Note that I limited my search to the period between January 2017 and July 2018, and the above shows just a small part of our due diligence exercise. New research is published regularly, so this list is not exhaustive. The main goal was to show that this is a legitimate area of research and to find out some facts. We discovered that leading academic institutions are investigating distinct target drug delivery approaches. In fact, this area seems to be quite hot, yet diverse. We also found some support to the company's claims.
To a biotech professional, this approach might seem amateurish. After all, we did not read the original research papers, did not review experiment data and can hardly tell a moiety from an aptamer. But for our purposes, this was a good result. With little pre-existing knowledge, we now have some understanding of the market. It's not perfect, but now we can have a more educated conversation with an expert and with the company.
One of our main goals is to make it easy for non-experts to understand technology. Thus, angel investors can reduce information asymmetry when investing in SciTech startups. And we believe experts will appreciate the ease of tracking sectors that Avogadro One will offer.
We'd love to hear how you deal with similar tasks and how you keep track of new developments in your market. Please take a few minutes to answer our questionnaire. To find out when you can use our platform, sign up for our mailing list here. And feel free to reach out to me on LinkedIn if you have any questions or want to chat.