July 2020
I hope this note finds you well. I’ve had a mix of emotions watching what is happening across U.S. cities — feelings of both frustration and some hope. I’ve been speaking with and listening to various business leaders who are making public and private commitments to do more for the African-American community and it’s encouraging. Whatever actions you are taking today or anticipate taking in the future, I encourage you to check in periodically with friends and trusted advisors to keep yourself accountable. I welcome your ideas and thoughts on the subject.
I’m excited to share that we will have two summer associates joining Raba for the next few months (Sam and Claudio). We see this type of program as one more way that we can build out Raba’s network of talented people with in-depth knowledge of our operations.
Raba summer associates:
Sam Natbony is assuming a new role as a technology investor at Accel-KKR in the fall. He previously worked at PJ Solomon, a New York-based investment bank, advising technology and media companies on M&A and financings. Sam graduated Summa Cum Laude from the University of Pennsylvania with a BA in Political Science.
Claudio Bruno just completed his first year at the Stanford Graduate School of Business. He had been an economist at the Italian Development Bank, where he worked on the bank’s investments, managed key relationships with national and multinational development banks, and co-authored several publications for the IDB. Claudio graduated Cum Laude (both his undergrad and masters) from Bocconi University in Milan, where he focused on economics.
In this update, we will dive deeper into our investment in 54Gene, a company we believe is working toward solving incredibly important healthcare challenges for the benefit of Africans and all races.
54Gene, an African genomics platform:
I’m excited to share more detail on our recent investment in 54Gene. We first got to know the founder, Dr. Abasi Ene-Obong, in early 2019 through an introduction from Iyin Aboyeji, co-founder of Flutterwave. At the time, 54Gene was in its very early stages with the mission of building a genomics company that would move African and global healthcare forward, and had just been selected to join the YCombinator program. We were intrigued by the idea of genomics in the African context, and made an effort to stay in contact with Abasi. While African genes are believed to be the most genetically diverse in the world, only 2-3% of sequenced DNA is from African origins. What this practically means is that drug and diagnostics products are being made without the inclusion of robust African data sets, and that means we all lose out. We did our research based on the supposition that 54Gene could build a company that harnesses the potential of genetic, clinical and phenotypic data for the benefit of better healthcare for all. And we were particularly tuned in to the question of “why now?”
Why now?
Since the human genome was first mapped in 2003, scientists have pursued the promise of genomics to enhance medical discoveries. The opportunity to improve drug discovery is vast, as there are over 7,000 known genetic diseases, and only 350 therapies. To understand the space, we engaged and spoke with a spectrum of thought leaders over a period of more than a year. We discussed the implications of African genomics with leading researchers, scientists and investors to understand the potential and the risks. Developing the PCSK9 gene to help manage high cholesterol is one example of genomic research that contributed to significant drug discovery (the finding came from the study of genetics of African populations). Drug discovery companies like BridgeBio have leveraged genetic data to produce a 4x increase in the probability of commercialization of drug therapies and a 8x return on investment vs. industry averages. Fundamentally, using genomics for drug discovery is a proven approach, as genetically-validated targets are more likely to succeed in clinical trials (which helps drive large pharmaceutical company outcomes). However, human biology is extremely complex, and while the space holds promise, we are early in the evolution of harnessing its potential. Over the last decade, have made significant advances in developing platforms, tools and broader datasets to push the field further.
Convergence of computational power, tools and data:
Several powerful trends are converging that will further advance healthcare over the coming decade. Companies like Insitro are building large genetic, clinical and phenotypic datasets and leveraging machine learning to model outcomes that speed the process of drug development. Companies like 10xGenomics enable researchers to see biology at very high resolution and at scale, which allows for high-throughput analysis at the single-cell level. Even as of just a few years ago, these kinds of tools weren’t available. To date, direct to consumer DNA companies like 23&Me have used cost-effective genotyping to create DNA data sets (think of genotyping as skimming the headlines of a book vs. sequencing, where you would read the entire book). However, the cost of whole exome sequencing (WES) continues to come down. Just think, a decade ago, the cost to sequence a genome was $50,000. Today it’s under $600 (the cost is mostly for the chemicals used) and a Chinese sequencing company called BGI announced sequencing capabilities at $100.
Team and platform...
Over the last decade, the Wellcome Trust, NIH and the Bill and Melinda Gates Foundation have made important investments in training geneticists and researchers across the continent through the work of H3Africa, a consortium that enables fundamental research while developing infrastructure, resources, training and ethical guidelines to support sustainable research. H3Africa has built an important foundation for African genomics. To build on that work, 54Gene has formed the African Center for Translational Genomics to provide a platform for African scientists to further collaborate. Today, 54Gene works with over 300 researchers, clinicians and geneticists to further develop genetics capabilities across the continent. Critical to the company’s work is ensuring data is procured ethically and with informed patient consent. Leading that effort is Aminu Yakuba, who previously chaired the H3Africa Ethics and Regulatory Affairs working groups. The team is further supported by a scientific advisory board that includes Dr. Michael Murray, the clinical director of Yale University’s Center for Genomic Health. Dr. Murray’s work is focused on understanding the value of using DNA-based screening of populations in order to identify individuals with disease risk, such as cancer and heart disease. The advisory group also includes technologist Jeff Hammerbacher, the founder of Related Sciences (RS), a firm focused on drug discovery for major diseases. Prior to founding RS, Jeff was a founder and Chief Scientist of Cloudera, an Entrepreneur-in-Residence at Accel, and manager of the data team at Facebook.
The implications of COVID:
Over the last three years, venture capitalists have invested over $40 billion into drug development, with about half going to cancer and rare disease therapies and about 5% ($2.2 billion) going toward drug discovery that focus on infectious diseases. The discrepancy is quite logical. With infectious diseases, you help eradicate a virus and you eliminate demand for the drug, whereas oncology therapies and chronic ailments have the potential for large, long-term revenue opportunities. COVID and its related health, societal and economic impacts will likely drive important change around infectious disease research and therapies. Serve Saxonov, the founder and CEO of 10xGenomics, had this insight on the company’s May 11th earnings call:
“I think there's going to be more focus on infectious disease type of research and infectious disease types of applications. I'm not sure if that necessarily breaks more toward the sort of clinical applications relative to baseline research, but it's all kind of pointing to greater fundamental investment that we see in biology and genomics, in particular.”
54gene is on a mission to build out the base of African genomics data in order to sustainably improve the development, availability and efficacy of medical products that will prove beneficial to Africans and the wider global population. If you are interested in learning more, please email me to join one of our monthly calls with the founder/CEO (Raba LPs only, please).