Explaining the Open Philanthropy Project’s $17.5m bet on Sherlock Biosciences’ Innovations in Viral Diagnostics

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Ear­lier this year, the Open Philan­thropy Pro­ject awarded a five-year grant and made an ad­di­tional in­vest­ment in Sher­lock Bio­sciences to sup­port the de­vel­op­ment of a di­ag­nos­tic plat­form to quickly, eas­ily, and in­ex­pen­sively iden­tify any hu­man virus pre­sent in a pa­tient sam­ple.

Devel­op­ment of this tech­nol­ogy would rep­re­sent a sig­nifi­cant ad­vance in viral di­ag­no­sis, and could both re­duce threats from viral pan­demics and also benefit health care broadly. In one im­ple­men­ta­tion of the test, which might be suit­able for use in field clinics or for home use, sam­ples can be tested in less than an hour us­ing just a strip of pa­per.

We be­lieve that the broad po­ten­tial of Sher­lock’s tech­nolo­gies is matched by co-founders and a team of deeply ex­pe­rienced sci­en­tists, en­trepreneurs, and clini­ci­ans who are al­igned with our goal of mak­ing a uni­ver­sal viral di­ag­nos­tic sys­tem available wor­ld­wide. The new com­pany, re­cently spun out of the Broad In­sti­tute of MIT and Har­vard, is de­vel­op­ing tech­nolo­gies li­censed from the Broad In­sti­tute and Har­vard Univer­sity’s Wyss In­sti­tute.

Open Philan­thropy Scien­tific Re­search Pro­gram Officers Heather Youngs and Chris Somerville sat down with Com­mu­ni­ca­tions Officer Michael Lev­ine to talk about the ra­tio­nale for the grant and in­vest­ment, how mar­ket forces af­fect biotech com­pa­nies, and what we hope Sher­lock Bio­sciences will be able to ac­com­plish. The ques­tions and an­swers have been ed­ited lightly for clar­ity.

What prob­lem is this pro­ject try­ing to solve?

Chris: In 2015, a Korean na­tional went back to Seoul af­ter a va­ca­tion in the Mid­dle East. He wasn’t feel­ing well, he went to a hos­pi­tal, and they couldn’t figure out what was wrong with him. Even mod­ern hos­pi­tals have a very small num­ber of things they can di­ag­nose, and if they can’t di­ag­nose it, they get a sam­ple and they send it off to a re­gional fa­cil­ity. Two weeks later, when they dis­cov­ered he had MERS, they quaran­tined around 17,000 peo­ple that had come into con­tact with him. It cost billions of dol­lars, and more than 30 peo­ple died. It could have been a lot worse if that strain of MERS had been re­ally viru­lent. If that had been an even more deadly and in­fec­tious agent, it would have been a catas­tro­phe. In a city of 10 mil­lion peo­ple, it could have started a global pan­demic. On the other hand, it could have been much sim­pler if doc­tors had been able to iden­tify the virus within the first few hours af­ter the pa­tient ar­rived at the hos­pi­tal.

Heather: You can’t treat an in­fec­tious dis­ease if you don’t know what it is. If you do know what it is, that can help you (1) treat the pa­tient faster, and (2) use the ap­pro­pri­ate drugs so you’re not us­ing an­tibiotics when you need an an­tiviral and en­courag­ing an­tibiotic re­sis­tance, or vice versa. It is sur­pris­ing that, in this day and age, it may take weeks to know what virus you have. We were watch­ing a re­cent in­fluenza epi­demic and knew many peo­ple were be­ing mis­di­ag­nosed. You can’t do proper epi­demiol­ogy if you don’t know what virus you have. All of these things are im­por­tant for gen­eral health and pan­demic pre­pared­ness. We re­ally want some­one who’s got an in­fec­tious dis­ease to be able to know very early on ex­actly what they have and seek the ap­pro­pri­ate treat­ment. That’s the goal.

Chris: Our in­ter­est is in get­ting much, much bet­ter di­ag­nos­tics into wide­spread use. This as­say is much more sen­si­tive and quick than cur­rently available meth­ods. We think it can be done within an hour of ar­riv­ing at the hos­pi­tal. In one im­ple­men­ta­tion of the test, which might be suit­able for use in field clinics or for home use, sam­ples can be as­sayed in less than an hour us­ing just a strip of pa­per. If the Korean hos­pi­tal had this as­say, they would have im­me­di­ately seen a sig­nal say­ing MERS, and then they would have quaran­tined that per­son and ev­ery­body who had been in con­tact with him. That’s the vi­sion. Hun­dreds of thou­sands of peo­ple ev­ery year die of in­fluenza, and if they knew early that they had it, they could get os­eltamivir, which is ac­tu­ally quite effec­tive if you use it early enough. We want in­ex­pen­sive and quick di­ag­nos­tics for all dis­eases out there in the world. We think this tech­nol­ogy has the ca­pa­bil­ity of pro­vid­ing that, not just here but in the less de­vel­oped world.

How did you find Sher­lock Bio­sciences?

Heather: We had done a sur­vey of di­ag­nos­tics when we were do­ing our vac­cine land­scape in 2016. At that time, we felt there wasn’t any­thing new in the space and that the sci­ence was mov­ing along at a good pace, and there wasn’t a good fund­ing op­por­tu­nity for us. But when we saw the re­search com­ing out of Feng Zhang’s lab, we rec­og­nized it was a step change—that his in­ven­tion was a new tool that would be much more sen­si­tive than the PCR tools or an­ti­bod­ies that are cur­rently used. We knew that it had a chance to be exquisitely sen­si­tive. They had de­vel­oped it enough to not only tell the differ­ence be­tween very closely re­lated viral strains but also to de­tect it on a sim­ple pa­per strip. So we got ex­cited about that, but we figured it would take off on its own.

A cou­ple of years later, Chris and I were at a re­treat for new sci­en­tific op­por­tu­ni­ties. We kept try­ing to get peo­ple in­ter­ested in a viral di­ag­nos­tic with­out much suc­cess. In the park­ing lot, we ran into David Walt, a Har­vard pro­fes­sor who had pre­vi­ously co-founded sev­eral im­por­tant com­pa­nies. He told us he was part of a new com­pany that could de­tect a sin­gle can­cer cell in a per­son’s body. We asked if he thought they’d do a viral di­ag­nos­tic, he went away and talked to his col­leagues, and af­ter a cou­ple of weeks he got back to us.

What are the mar­ket forces on biotech com­pa­nies like Sher­lock Bio­sciences?

Chris: We do not have good in­sights into the forces shap­ing the biotech in­vest­ment com­mu­nity. How­ever, when we started in­ter­act­ing with Sher­lock, they told us that in­vestors seemed fo­cused on op­por­tu­ni­ties other than viral di­ag­nos­tics. Thus, we con­cluded that to meet our goals of mak­ing a uni­ver­sal viral di­ag­nos­tic sys­tem available wor­ld­wide, a philan­thropic in­vest­ment would be nec­es­sary.

Heather: The challenge of mak­ing this eco­nom­i­cally vi­able is very hard. Of 14 Ebola di­ag­nos­tics that were ap­proved in the last epi­demic, only two are available for the cur­rent out­break. What hap­pened to the other 12? They got fund­ing from gov­ern­ment agen­cies to do a proof of con­cept, but they didn’t go all the way through ap­proval and man­u­fac­ture be­cause there was only a small mar­ket.

Chris: Be­cause it’s im­pos­si­ble to know when the next Ebola epi­demic will arise, com­pa­nies are re­luc­tant to de­vote re­sources to de­vel­op­ing an ex­pen­sive Ebola di­ag­nos­tic. Most com­pa­nies want to fo­cus on things that they can sell in the de­vel­oped world, in the United States and Europe, where they can sell for good value be­cause the health care sys­tems will pay. But we’re in­ter­ested in dis­eases ev­ery­where – in both the de­vel­oped world and the de­vel­op­ing world. That’s where philan­thropy comes in.

Why did you make both a grant and an in­vest­ment?

Chris: The de­ci­sion to in­vest or award a grant varies from case to case. In some cases, we’re sim­ply try­ing to sup­port vi­a­bil­ity of a com­pany that has promis­ing tech­nol­ogy that we want to see brought into ap­pli­ca­tion. We’re usu­ally try­ing to help get them to the point where they’ve solved all of the prob­lems so they can raise con­ven­tional in­vest­ment.

In the case of Sher­lock, we wanted to both as­sist with fi­nan­cial vi­a­bil­ity of the com­pany and also to make it pos­si­ble for them to de­velop a type of product that may be less prof­itable than other ap­pli­ca­tions of their tech­nol­ogy but which we think has high value in the con­text of avert­ing catas­trophic risk from a pan­demic.

I’m very ex­cited about Open Phil’s abil­ity to make in­vest­ments. I think there’s prob­a­bly, in some ways, even more need for fund­ing cer­tain types of pre-com­mer­cial de­vel­op­ment than in the ba­sic re­search side. In this case, we wanted to di­rect them to­ward our in­ter­est. Thus, from the be­gin­ning we went in with the idea that it would be a grant and an in­vest­ment. The grant money has obli­ga­tions, and a bud­get, and mile­stones.

Heather: The grant pro­vides a part­ner­ship be­tween Open Phil and the com­pany to do what makes sense to de­velop the viral di­ag­nos­tic. We’re putting this first on their agenda. The in­vest­ment al­lows them to do what needs to be done for the fi­nan­cial fu­ture of the com­pany. We have a joint re­search and de­vel­op­ment com­mit­tee that meets of­ten to dis­cuss the tech­ni­cal limi­ta­tions and what is pos­si­ble so we can make sure the prod­ucts that are de­vel­oped meet our goals. A grant is more ex­pen­sive for us up front, but it makes sense in the long run.

We’re not try­ing to in­terfere with the busi­ness de­vel­op­ment and the busi­ness model for the com­pany. In fact, part of the rea­son for us in­vest­ing in ad­di­tion to mak­ing the grant is that we want to sup­port that nor­mal, nat­u­ral de­vel­op­ment, and think that the fi­nan­cial suc­cess of the com­pany will en­hance their abil­ity to de­velop the di­ag­nos­tic that we want to see.

Chris: Our goal is to con­tribute to the for­ma­tion of a very suc­cess­ful di­ag­nos­tic com­pany us­ing very pow­er­ful, al­most uni­ver­sally ap­pli­ca­ble di­ag­nos­tics. We want to kick­start them into the ar­eas that we think have a lot of hu­man­i­tar­ian value. Like the Gates Foun­da­tion’s in­vest­ment in early vac­cine de­vel­op­ment, we want to take a lot of the early cost out of it, give them mo­men­tum in that field, and then they should carry it for­ward into the fu­ture, into ap­pli­ca­tion. They’re en­thu­si­as­tic about our goals. At the same time they have to make a prof­itable, sus­tain­able en­ter­prise. So far, we’re early days but we’re very al­igned.

Heather: Another rea­son we in­vest in com­pa­nies is that not all pro­jects need help at the re­search stage, some need help at the trans­la­tion stage. There’s a vac­uum from the re­search stage to the com­pany stage. Just get­ting some­thing from an aca­demic lab into some kind of in­dus­trial pro­cess is one thing. After that, there’s a sec­ond valley of death of get­ting that com­mer­cial­ized product into the mar­ket, get­ting peo­ple to ac­tu­ally buy what­ever you’ve made. Those are big hur­dles. We think the com­pany will gen­er­ate a fi­nan­cial re­turn, but we’re will­ing to tol­er­ate the risk that it won’t.

Do you think Sher­lock has a good chance to suc­ceed?

Chris: Yes, we do. We think there will be in­cen­tives in the health care sys­tem for early di­ag­nos­tics in the de­vel­oped world but it’s hard to make a lot of money in di­ag­nos­tics, par­tic­u­larly in the de­vel­op­ing world, which is where we want to see this tech­nol­ogy go. Open Phil wants us to take risks. If all our com­pa­nies make money, prob­a­bly we’re be­ing too con­ser­va­tive. Some of our in­vest­ments need to fail or else we’re not aiming high enough.

We have a lot of con­fi­dence in the founders, as well as the man­age­ment team – CEO Rahul Dhanda and chief tech­nol­ogy officer Will Blake. The com­pany’s nine founders are amaz­ing peo­ple and are out­stand­ing sci­en­tists who bring com­ple­men­tary skills and ex­pe­rience to the com­pany: Feng Zhang, David Walt, Jim Col­lins, Pardis Sa­beti, Rahul Dhanda, Omar Abu­dayyeh, Jonathan Gooten­berg, Deb­o­rah Hung, and Todd Golub. David Walt, as an ex­am­ple, was a co-founder of Illu­mina and Quan­terix who has been down the path of de­vel­op­ing tools and is very ex­pe­rienced at go­ing from dis­cov­ery to im­ple­men­ta­tion.

Sev­eral of the founders are on the board of the com­pany, so that gives us con­fi­dence that they’ll use their ex­pe­rience to help the com­pany suc­ceed. They have similar goals as we do. They want to see their tech­nol­ogy de­vel­oped and used in the world.

Where does this fit into our sci­en­tific re­search port­fo­lio?

Chris: It definitely fits into our in­ter­est in in­fec­tious dis­ease. We have a pretty big an­tivirals ac­tivity. We’ve got an in­creas­ingly big vac­cine in­ter­est. Be­ing able to di­ag­nose an in­fec­tious dis­ease is a com­pan­ion to those. If you stand back and say, “how can we pre­pare for the next pan­demic?” we see these three things: de­tect it early, and then try both a drug ap­proach and a vac­cine ap­proach to stop­ping it. That’s how those three things fit to­gether.

Heather: It also has the global health per­spec­tive. Mak­ing the best use of the ther­a­peu­tics we have means pre­scribing things when you can, not pre­scribing things to the wrong dis­eases, and un­der­stand­ing the epi­demiol­ogy. We’re en­ter­ing a world of big data, and if you don’t have good data, it’s use­less. Right now we don’t do very de­tailed di­ag­nos­tics. That makes it very hard to track long-term out­comes. We’re start­ing to see that, ac­tu­ally, in­fec­tious dis­ease might have a big­ger role in chronic con­di­tions than we thought be­fore. Be­cause we don’t track com­mon in­fec­tions, we can’t do the sci­ence to de­ter­mine the long-term out­comes. So this could have both an im­me­di­ate global health im­pact and a longer-term health im­pact in un­der­stand­ing chronic dis­eases that are re­lated to in­fec­tions.

It’s a great ba­sic sci­ence tool play as well. We have these new dis­cov­er­ies, and get­ting them into use as quickly as pos­si­ble is a challenge. The sys­tem is re­ally slow, it takes a re­ally long time to get a dis­cov­ery out. It’s some­times decades to get some­thing from a re­search lab to a hos­pi­tal, let alone a con­sumer product.

Chris: We’re look­ing for re­ally broad im­pact. Even though this was origi­nally driven by our de­sire to pre­vent a catas­trophic pan­demic risk, if we can also get all kinds of ad­di­tional pub­lic health value, that low­ers the thresh­old to go into some­thing. In the case of Sher­lock, that was a fac­tor for us, be­cause we can see a lot of ap­pli­ca­tions for it. The fact that it can run on pa­per strips means it can prob­a­bly be used ev­ery­where in the world.

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