Expanding an already huge market is a dream for any investor. It does not happen often and the process is never easy, but if it can be accomplished, the rewards are massive. Understanding the risk is important but not being involved is ignorance. Most companies within a market, that is large to begin with, understand this. An investor that also understands this is one that may find incredible rewards.
Aileron Therapeutics Inc., a development stage biopharmaceutical company, is currently working to develop a new class of pharmaceutical platform. Recently, the company has received an influx of $40 million in capital from several leading pharmaceutical companies. The financing was co-led by new investors SR One Ltd., the independent corporate venture fund of GlaxoSmithKline (NYSE: GSK), and Excel Medical Fund.
To understand the significance of this particular company, one must understand that there are basically two major platforms that service the pharmaceutical industry, small molecules and biologics. Although there are variations to accomplish new product development, these are the basic platforms that allow for new product growth. If a new platform can be developed and proven, expansion can be achieved and exploited.
The company is primarily working in the cancer area but finds that its platform could be applied across several pharmaceutical sectors. The technology deals with molecular devices, often called “staples” and proteins. In many instances, proteins put into the blood stream break-up quickly as they enter the blood stream, not allowing for effective action of the drug. The platform that the company is working with keeps these structures in-tact so that they can perform the desired function before break-up. The work to date suggests that the company is having success as GlaxoSmithKline PLC, Novartis AG, Roche Holdings AG and Eli Lilly and Co. have banded together to support the work. Most importantly, one must understand that having a consortium of companies, such as these, pulling together to support this type of company is highly unusual and an indication of where the company’s work stands.
As written in past posts on this topic, there is quite a bit of capital available for investment. There is, however, a point where the science and technology begins to run up against a developmental wall. From many points of view, this wall is beginning to appear past stem cell work that is making quick strides. Opening up of a new product development front could mean an entirely new process that would bring billions of new revenues to the market. Aileron Therapeutics may well be on track toward opening this new front. Larger pharmaceutical companies recognize it and so should the investor. There is still work to be done, but if the current research pans out, there will be vast profit that nobody will be quite prepared for.
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