MDA Venture Philanthropy—not your father's research program
An increasingly popular trend in funding research projects is “venture philanthropy,” which applies effective business principles and practices to nonprofit goals.
Now, MDA has put this model to work for its research program by creating a new nonprofit spin-off, MDA Venture Philanthropy (MVP), that seeks to overcome barriers and speed the development of drugs for the diseases in MDA’s program.
MDA’s research program focuses on the discovery and development of new therapeutic ideas. MVP’s goal is to identify the most promising and advanced of those ideas and help move them to the next phase of development by attracting philanthropists who can make the large gifts necessary to start the drug development process.
The two main factors that inspired the creation of MVP are the advanced status of several projects in MDA’s research pipeline, and the decision by the Association to employ novel means to expand its fundraising reach. Creating a separate funding source ensures that MVP projects won’t overlap with or subtract from MDA’s national or local fundraising.
It’s important to note that, while MVP donors may be entitled to a tax deduction, they do not receive any financial return on their investment in MVP projects.
A new paradigm for MDA research
Launched in January, MVP evolved from, and builds off the success of, MDA’s translational research program, which has funded the Association’s most promising and advanced projects since 2004.
Formed as a 501(c)3 nonprofit, but functioning like a venture capital firm, MVP aims to secure major donations (upwards of $500,000) from individuals, which it then channels to specific projects in an effort to get them through the expensive and time-intensive initial stages of development.
The crucial beginning stages of drug development often are referred to as the “valley of death” because many projects never advance further. The hurdles involved in these early stages include such things as initial screening for likely compounds, optimization (finding the best formulation for a compound), toxicology, manufacturing and scale-up (increasing production from laboratory scale to the levels needed for clinical development), submission of the application for a drug that never has been tested in humans before (an investigational new drug, or IND), and phase 1 (and sometimes phase 2) trials.
These challenges loom even larger when they involve drugs designed for rare diseases. Because the number of people with such diseases is smaller, so is the potential for profit, resulting in less incentive for companies to invest.
Once a drug clears the initial stages of development, it’s much easier to attract the necessary investment by pharmaceutical and biotech companies, because the companies can see that major funds already have been invested and all the initial work accomplished.
After those early stages have been completed, says Sharon Hesterlee, MVP senior vice president and executive director, “MVP brings together people with means who care about the disorders in MDA’s program, and companies that, with funding, will develop these therapies and see them through the final stages of development.”
MVP funnels donations into one of four investment “portfolios:” amyotrophic lateral sclerosis (ALS), Duchenne muscular dystrophy (DMD), spinal muscular atrophy (SMA), and a fourth category that includes the other neuromuscular diseases covered by MDA, such as myotonic muscular dystrophy (MMD) and Friedreich’s ataxia (FA).
The focus on ALS, DMD and SMA stems from the advanced nature of several projects in the development pipeline, Hesterlee explains.
MVP donors receive regular information about drug development progress in their “portfolio.” Profits on MVP investments are invested back into the portfolios from which they were derived.
The program takes a proactive approach when it comes to awarding grants, continually evaluating companies in need of funding. A detailed 13-week evaluation process includes review and input from MVP’s business advisory and scientific development boards as well as ad hoc scientific reviewers, after which a contract may be developed with plans to move forward.
Two organizations, one goal
MVP and MDA are working hand-in-hand to get treatments for muscle-wasting diseases to the people who need them.
“The most exciting thing about the launch of MVP is the fact that we truly need this mechanism to fund drug development because years of MDA-funded research have produced so many different therapeutic opportunities,” Hesterlee notes.
“We need to move as many of these promising ideas as possible into clinical testing as fast as possible, and we think through MVP we’ll be able to streamline the system and attract the funds to do it.”