Earlier this month, the Trump administration instructed the National Institutes of Health (NIH) to implement restrictions on certain categories of funding allocated to research institutions.
While a federal judge has temporarily halted the implementation of this policy, government funding for nascent biotech startups may still experience delays or possibly be discontinued altogether, warns Chris Gibson, co-founder and CEO of Recursion, a biotech firm leveraging AI for drug discovery.
Seeing this confusion as an opportunity, Gibson and fellow biotech entrepreneur David Bearss established a pre-seed venture fund called Altitude Lab Pre-seed Venture Fund, which aims to invest between $100,000 and $250,000 in 10 to 15 biotech companies.
Startups that qualify for Small Business Innovation Research (SBIR) grants from the NIH are encouraged to apply for funding from this initiative. The fund will be managed by Altitude Lab, a nonprofit life sciences accelerator in Salt Lake City that Recursion launched five years ago.
“SBIR grants have always been important to me,” Gibson stated. “When we first started Recursion, our initial step was to secure an SBIR grant, which led to us receiving $1.46 million from the federal government.”
According to Gibson, that funding received in 2014 enabled Recursion to develop its dataset, which underpins its machine learning algorithms and drug discovery platform. Since then, the company has successfully secured multiple rounds of venture capital from renowned investors such as Lux Capital, Menlo Ventures, and Felicis, eventually going public in 2021. Recursion’s market cap is now over $4 billion.
Gibson expressed hope that this fund “will bridge the gap” for emerging biotech firms during this period of uncertainty surrounding NIH funding.
“Early-stage science is inherently risky. It can be challenging to predict how these companies will perform, but those funded by SBIR grants are significantly more likely to attract private investment,” he noted.
Additionally, the fund will contribute to the growth of the biotech landscape adjacent to Recursion. Startups will have access to 12 months of office and lab space at the Altitude Lab facilities.
“We’re cultivating our own version of a mini-Cambridge right in the heart of Salt Lake City,” Gibson remarked.
Compiled by Techarena.au.
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