Hear from CIOs, CTOs, and other C-level and senior execs on data and AI strategies at the Future of Work Summit this January 12, 2022. Learn more


Every trend has its counterexamples, and the rush of venture funding into biotechnology is no exception.

VentureWire reports today (subscription required) on the case of Sequella, a small Rockville, Md., biotech working on new therapies for drug-resistant tuberculosis (whose bacterium is pictured at left). The company is seeking $20 million to put SQ109 (link to PDF), its leading TB-drug candidate, through mid-stage human testing. So far, however, the company isn’t finding many takers:

“There are 30 venture capital firms that are Sequella watchers,” said Sequella Chief Executive Carol A. Nacy. “But the venture financiers are very risk averse.”

As a result, Sequella, based in Rockville, Md., has had to raise much of the $26 million it has raised to date from angel investors and through grants from National Institutes of Health. Founded in 1997 and leveraging a drug library developed in conjunction with the NIH, Sequella now has a diagnostic patch in Phase III trials and a lead compound, SQ109, which just completed Phase I.

Nacy said that the tuberculosis market has been like a roller-coaster in the past 50 years. “In the late 1950s, TB was the number one killer of people in the U.S.,” she said. That spurred a bevy of antibiotics to combat the disease, and the development of a combination treatment in the 1970s effectively ended innovation in the field. “So the medical community said, no more unmet need,” she said.

But the bacteria continued to mutate, eventually developing into drug-resistant strains that became a crisis by the 1990s. Big pharma and investors alike have slowly realized the need to invest more in infectious diseases, but Nacy said that TB in particular has been neglected. Still, some industry giants like Pfizer Inc., Johnson & Johnson Inc. and Sanofi-Aventis SA have dipped their feet in, and Daiichi Sankyo Inc. sold the TB portion of its infectious disease platform to Sequella in 2004.

Medical authorities have been warning about the dangers of drug-resistant TB for nearly a decade, but apparently the message is still a tough sell where some venture capitalists are concerned.

VentureBeat

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
  • up-to-date information on the subjects of interest to you
  • our newsletters
  • gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
  • networking features, and more
Become a member