Microbiome ventures: from curiosity to saturation almost overnight.

The microbiome investment landscape has rapidly moved from an area of scientific curiosity to an area with an almost exponential increase in the number of start-ups, over $700m of venture capital in 2016, newly minted accelerators at J&J and Illumina and even the emergence of a dedicated VC fund. In this post I lay out what the current market looks like and where there still might be opportunity for entrepreneurs entering this space. In later posts I’ll do a deeper dive into each disease and platform area.

With potential treatments for many conditions that have largely evaded effective treatment to date, from autoimmune to neurological disorders, the current proliferation of interest in microbiome is clearly justified. Moreover compared to traditional drug development the microbiome is often seen as relatively easy to work with: it’s both accessible (principally either in the gut, skin or mouth) and treatments exhibit relatively low levels of toxicity, especially where derived from naturally occurring bacteria or phages.

This reduces the challenge to one of identifying the signal in the noise and utilising emerging cell manipulation techniques to modify the levels of relevant microbiomes and their products accordingly. However, it is far from plain sailing, in most cases the science is far from proven and it’s still a huge challenge to relate the sequenced genes to specific organisms and specific functions in an individual's gut. This is changing rapidly however with recent developments such as the Functional Shifts Taxonomic Contributors method (FishTaco for short, surely this year’s winning acronym) having made this substantially more achievable.

Firstly, diagnostic companies.

The ‘simplest’ approach is that taken by the likes of uBiome in which they map out the different classes of bacteria in the gut at a single point in time and highlight correlations to known disease phenotypes. Others, such as DayTwo look to correlate eating habits with changes in the gut over time and through this inform dietary choices. These models are more like web based subscription services than traditional biotechs and in the end marketing dollars will win out over IP. They are going for the mass scale, long term play, i.e. the 23&me model of providing just enough value to collect data at scale and use this to infer correlations which then have some statistical certainty before entering a trial.

The discovery platform approach

Many microbiome companies focus on mapping changes in the microbiome genome within a known disease population and use this as a platform to follow a more traditional drug discovery path, identify targets and create new small molecule and bacteria cocktails that attempt to nudge the microbiome away from it’s disease state (dysbiosis). Enterome is one of the most established players in this space, beginning life in 2012 and now with $36m behind it, as is Second Genome which has raised over $42m in funding and has several strategic relationships with major pharma companies.

Hyper-targeted antimicrobials

It is of course an absolute travesty that we still routinely use broad spectrum antibiotics, wiping out both helpful and unhelpful bacteria and causing a trail of resistance issues. Many companies are looking at how to make anti-microbials more specific, C3J Therapeutics does this by targeting their signalling molecules whilst Eligo Bioscience engineers bacteria to produce targeted antimicrobials. Another really exciting approach is identification and engineering of bacteriophages (bacteria specific viruses) as pursued by Epibiome.

Pre-biotics

These complex carbohydrates cannot be digested by the gut but are instead metabolised by the microbiota. Here they lead to the production of short chain fatty acids which in turn release key signaling molecules related to satiety, gastric emptying and insulin release. It’s long been known that increasing or decreasing exposure to certain compounds which occur naturally in food (particularly fibre) can indirectly influence diseases states, especially in the context of autoimmune diseases. What’s changed is the ability to sequence the microbiome population to tease out how the population changes in different disease states and how certain food groups are able to modulate this.

The aim of pre-biotics is a rapid solution to repair these populations. Sadly this is increasingly relevant as our diets shift towards a far high proportion of sucrose, fructose and starches leading to significant reductions in the populations of critical bacteria and / or modifying the relevant signalling pathways. Microbiome therapeutics is a leader in this space and has already demonstrated several successful trials in the area of type-2 diabetes.

Pro-biotics

Instead of feeding the existing bacteria this approach restores specific populations of bacteria. This is in part inspired by the apparent success of fecal transplants which are essentially introducing someone else's microbiome into another person’s body. The trick is in getting a bit more specific on which bacteria are exchange. Vedanta is one of the leaders in this space having raised over $50m and claiming to have identified 17 kinds of Clostridia bacteria that either induce tolerance (useful for autoimmune) or stimulate immune response (useful for infectious disease). Another really interesting company in this space is Evolvebiosystems, they aim to restore the loss of bifidobacteria in newborns, thought to be the result of an increasing preference for C-sections, antibiotic use and decreases in breastfeeding.

This area also includes some almost outlandishly clever approaches from the likes of Synlogic (in partnership with Abbvie) and Blue Turtle Bio in which bacteria are modified to produce proteins that dynamically up or down-regulate existing bacteria in the gut, whist Azitra takes a similar approach to skin diseases. Essentially your own personal pharmacy.

Tracking a rapidly evolving market

Tracking the microbiome market

With the market moving so quickly I thought it would be useful to create a dynamic way to track which companies operate in which disease areas and the approaches they are applying. The google sheet can be found here and is editable for anyone who wishes to add in anything I’ve missed (I hold high faith in humanity that it won’t be vandalised!).

What’s next?

The field of Microbiome is already relatively crowded. There are companies addressing almost every conceivable disease state either by adding bacteria, ‘bacteria food’ (pre-biotics) or small molecules that modulate the population. Most firms claim to have a ‘leading’ platform for sequencing and working out what to change but in the main this is still traditional drug development. The real edge of this field feels like it’s in dynamic modulation of populations by bacteria or phages and building those smarts in to bacteria themselves rather than relying on an external decision and treatment system.

There are also a bunch of more practical issues: if you need to sequence anything you need to collect thousands of stool samples. It’s also still quite expensive (at least £100 a go even with a few clever tricks). It would no doubt advance the field to shift to some sort of in-situ live sequencing platform. Secondly it’s incredibly complex, varied between individuals and affected by environmental factors so sorting signal from noise is extremely challenging. Once again highly personalised and non-intrusive monitoring might go some way to resolving that.

We should also remember that the importance of the microbiome extends beyond humans with applications in reducing disease and antibiotic use in intensive agriculture (e.g. Healthy Cow Corp) and in facilitating the growth and survival of crops (e.g. Indigo Agriculture). Finally as with all biological organism derived solutions growing, processing and distributing is still a major challenge.

If you’ve got other ideas to make a step change in this space or are interested in building a venture but haven’t quite found the right team or idea join us at Deep Science Ventures.