Although he didn’t know it then, the hospitalization of Alok Tayi’s newborn daughter presented him with a way out of a chicken-and-egg problem.
Tayi is a scientist with a background in materials science and extensive experience in the biotech industry — among the speakers at this week’s upcoming SynBioBeta conference. After a postdoc with Harvard scientist George Whitesides, he went on to found a series of software companies with a focus on the life sciences and over $100 million in venture funding. “I learned many things in these early ventures — getting to product-market fit, building an organization that scales, having a sense of how things get stitched together,” he explains. “I had a unique adjacent view of how the life sciences industry operates and an understanding of some of the bottlenecks and challenges, having built software for every function even though I hadn’t been a practitioner.” However, the one thing these experiences did not reveal is the extent to which the obstacles around developing treatments aren’t necessarily discovering them, but instead are funding them.
It was having his daughter hospitalized at birth that revealed to him how rate-limiting funding was. She was suffering from a relatively common disease with well-characterized biology but no tangible treatment options, and other parents in the newborn intensive care unit seemed to be facing a similar uphill battle. In trying to navigate this harrowing experience in part by understanding the landscape of the biotech industry — something Tayi was well-attuned to from his own professional background — he found himself faced with an archetypal chicken-and-egg problem. To get from the pre-clinical to clinical stage of drug development, companies need some relatively small amounts of money to generate data, but no one will usually fund these companies without that very data.
In short, the contours of drug development are defined around inflection points — the kinds of milestones that serve as “power-ups” to move a company to the next level of funding and scientific research by increasing a company’s valuation and strategically informing what the path forward can and should look like. Inflection points that are often most under the microscope occur before drugs enter Phase 2 or 3 clinical trials, covering terrain often referred to as the “valley of death.” It is in these early stages of drug development where the most translational science has to occur and the possibility of failure is most consequential, foreclosing possible phase trials ahead.
This model of inflection points is not just an explanatory one; instead, it guides investment theses and informs in what and when people are willing to invest. “I was walking around Kendall Square [Cambridge, Massachusetts’ biotech hub] talking to all of my friends in venture and pharma — few were willing to take a leap to invest in drugs despite having money around, which was really a surprise for me,” Tayi explains.
Instead of feeling disempowered by the seemingly grim prospect of curing certain every-day and rare diseases alike, Tayi saw this funding conundrum as a possible pressure point to alleviate — and so, Vibe Bio was born. Built around the ethos that every patient should feel part of community and empowered to pursue a cure — instead of being underserved because of seemingly too expensive or too risky treatments — Vibe runs on the idea that inflection point financing can be more innovative. By putting the power to finance pivotal work for rare diseases in the hands of patients and providing technical experts for consultation, Vibe allows communities to find the best partner for the kinds of work they want and need to treat their diseases. In short, patients are enabled to collectively fund the kinds of cures they want, when they want it.
This funding is designed specifically to address inflection points — for example, to allow two or three high-potential programs to move forward other than a “lead,” which usually has the largest potential market and thus marginalizes rare disease programs. Tayi outlines this process as first engaging the company, obtaining specific information on the kinds of data and experiments needed, doing the necessary scientific diligence, and finally addressing the fundamental financing question of whether Vibe’s money can get a company to its next stage of funding. “Near such an inflection point, a few $100,000 to $1 million can unlock 8-plus figures in capital once deployed,” he emphasizes. If the community chooses to fund such an endeavor, the company chooses whatever contract research organization they may want to work with, and Vibe pays for the work up front. It shares in the downside risk, but if the company is able to get its data and move to the next funding round, Vibe is paid back from future proceeds to drive the model’s sustainability and scalability. “There is a modest upside,” Tayi explains, “and it’s not a loan or form of equity financing. But honing in on inflection points allows us to take advantage of a near-term window where our own milestones are aligned with a company’s.”
Vibe is currently a traditional C corporation, but it espouses the ethos of a Decentralized Autonomous Organization (DAO) to which it plans to formally move towards over time. DAOs are an instantiation of a model of capital and governance that allow communities to set priorities and allocate funding in a decentralized manner. As an added benefit, the experts who discovered a potential medicine in the first place can be provided the capital to move it forward, instead of building a brand-new team to do so.
Tayi sees a few key advantages to DAOs as a formal instrument. “They uniquely enable a risk-tolerant pool of capital, liquidity of capital, and a larger pool of participants,” he explains. “Practically, if you’re looking for a business model that allows you to deploy capital and return more capital than you put in, and in a reasonable timeframe, DAOs offer the kind of capital source to do more of that sort of work.”
How? For Vibe, it comes down to scale. “In the world of drug development, there’s over 13,000 diseases out there. You need infinite scalability of participation to go after all of them, and current corporate structures have limits around the number of owners of stock. However, because of the ups and downs of building biotech, it’s important to have access to highly risk tolerate capital that’s also liquid,” Tayi offers.
Instead, DAOs — and their basis in cryptocurrency — allow for the possibility of infinite scalability in a high-value asset class, with the capital for people “who love to do disruptive things.” He sees DAOs as instrumental in being able to go after “more risky, but less ‘return-type’ investments. By decreasing the return threshold due to liquidity, you’re enabled go broader with your aperture of disease.” For now, Vibe is exploring these possibilities with the foundation Chelsea’s Hope and a focus on Lafora disease, while growing a larger community of biotech innovators and patients.
DAOs are only one component of a larger movement around Decentralized Science, or DeSci, that is predicated on the promise of putting the power of science back into people’s hands. The idea is that DeSci creates a more “open, equitable, and transparent research and development environment…that allows anyone to participate in the drug development process,” says Tayi. By bringing together capital, people, and tools around a common value system and mission, Vibe sees the opportunity for every community to be part of finding a cure for the problems they care most about.
In part, this is possible because there seems to be a degree of commonality that structures the drug development process and its associated risks, making parts of these well-trodden processes approachable for companies and patients alike. At Vibe, this crystallizes in the form of software — to analyze high-potential programs at scale and visualize all of the incoming projects — and community coming together to offer insight into what might work, all encapsulated in a “vibe score.” Through this set-up, the community owns both the process of distributing capital and the proceeds from investing it.
“We want to rewrite the rules of biotech centered around patients and scientists who made the whole thing possible,” Tayi says. In just over a year, Vibe is showing just how this might be possible — one community-funded drug at a time.
Thank you to Aishani Aatresh for additional research and reporting on this article. I’m the founder of SynBioBeta and some of the companies I write about, including Vibe Bio, are sponsors of the SynBioBeta conference and weekly digest.