Why we invested in “bedside bioreactor” ADVA Biotechnology
AGP invests in Israeli founders and helps accelerate their growth in the United States. Our approach has been described as a "pull" strategy: We spend hundreds of hours with our U.S. corporate partners to understand their technology needs, which drives and derisks our deployment of capital.
During our conversations with large U.S.-based hospital systems, we discovered two interesting and converging developments.
1. CAR-T therapy adoption is growing
Payers and providers universally discussed with us the challenge of treating cancer. New and powerful state-of-the-art cancer surveillance and early detection tools, are, as The Wall Street Journal put it, “radically altering the landscape of cancer risk and screening.”
These new technologies and capabilities are impacting both detection and incidence of cancer: According to the National Cancer Institute, the number of new cancer cases worldwide per year is expected to rise to 23.6 million by the year 2030.
Thankfully, during the last decade, immunotherapies — which enlist and strengthen the power of a patient's immune system to attack tumors — have rapidly become what many call the "fifth pillar" of cancer treatment. These immune system-boosting treatments have shown the ability to shrink, and even eradicate, tumors in some people with advanced cancer.
As a result, CAR T-cell therapy has generated substantial excitement among researchers and oncologists; treatments with these therapies are growing at a 56.2% clip year-over-year.
2. CAR-T therapy manufacturing is expensive and inefficient
Unfortunately, as both payers and providers discussed with us, the average cost of a CAR-T therapy case is “nearly half a million dollars:”; indeed the National Cancer Institute pegs the average cost at $450,000.
The high price tag is largely due to the fact that CAR-T therapies are customized for each individual patient: T cells from the patient need to be extracted, transported, and “re-engineered” in out-of-hospital laboratories — a manufacturing process that is long, complicated, manual and centralized.
But what if there was a cost-efficient process for this cell therapy at point-of-care? One that didn’t require transport, centralized manufacturing, or manual laboratory technicians?
This challenge, posed to us by U.S. payers and providers, was solved by ADVA, an Israeli company led by Dr. Ohad Karnieli. A well-known expert in cell and gene therapy who ran advanced manufacturing at several therapeutics companies, Dr. Karnieli had assembled a rock-star team to develop the first automated CAR-T cell manufacturing platform.
The company’s “ADVA X3” platform, as it is known, is a revolutionary, modular system that enables autologous cell-therapy manufacturing at bedside. A fully automated, remote-monitored, single-use solution, the X3 enables large-scale cost-effective manufacturing of lifesaving cell therapies at point of care.
Backed by machine-learning and artificial intelligence, the single-use unit can extract and spin up CAR-T cells on-premise — on a device the size of a large printer.
This was a step function shift in the delivery of CAR-T therapy.
Conclusion: Direct match with our corporate relationships
There was much to like about ADVA when we invested: A visionary leader, a proven team, a working product, a defensible technology, a pulsating market need, and a remarkable innovation that aimed to accelerate and transform the manufacturing process for personalized cancer and other treatments.
In addition, the company directly intersected with our investment hypotheses around "The Future of Work," particularly in healthcare, where manufacturing innovations (i.e., IoT) and the economics of care intersect with challenges related to workforce shortages and human capital.
But ADVA’s intersection with the needs of our corporate healthcare partners in the U.S. market made the investment even more clear. AGP was able to quickly validate the opportunity with executives at large hospitals, and it became readily apparent that our network in the U.S. could be an asset to ADVA — in other words, we could help.