Fight Aging!

What follows here is an inside baseball discussion relating to the companies working on senolytic therapies, biotechnologies capable of selectively destroying senescent cells. The presence of these cells is one of the causes of aging and age-related disease, and their removal is the first of a number of rejuvenation therapies based on the SENS vision that will emerge over the next few decades. Human trials of the first senolytics will be starting this year and next, and by the mid-2020s most people in the wealthier parts of the world will have the opportunity to remove this part of the burden of aging. This is a wondrous development: based on research to date, removing senescent cells from old individuals is a robust and reliable way to turn back the clock on many measures of aging and markers of age-related disease.

I should preface the rest of this post by noting that competition in the marketplace is a great thing, but only because some investors suffer meaningful losses. The threat of loss is necessary to the alchemy by which self-interest is turned into altruism. Only competition with real penalties for failure can drive the faster progress that benefits everyone. Yet regardless of who wins or loses in terms of the value of their shares, we all win when reasonably priced senolytic therapies become widely accessible. In that sense, investing in credible ventures aiming at the production of rejuvenation therapies is a great opportunity: even failure contributes to progress, and the outcome in the end is that we are all better off. Someone achieves the goal, someone deploys the treatment.

UNITY Biotechnology is presently at the head of the current crop of companies focused on treating aging and age-related disease through the clearance of senescent cells. They hold the leading position by virtue of the involvement of the principal research groups in the field, having big names from the pharmaceutical and biotech field running the show, and having recently raised more than $100 million to push the first of these therapies through the US regulatory progress and into the clinic. Yet I can't say as I think that their position is as enviable and commanding as it might first appear to be. From a competitive point of view, they actually have very little going for them at the moment aside from that war chest and the credibility it took to raise it.

Having made that statement, I should defend my position. The chief problem I see for UNITY is one of technology. They are taking a small molecule drug approach within the current regulatory system, and the currently available stable of senolytic drug candidates with which they entered the picture are chemotherapeutics with significant side-effects. Other drug candidates are emerging quite rapidly in the research community, some of which may have far fewer side-effects, but switching would mean starting fresh, or licensing fresh from current owners. It might also mean moving from a well-characterized drug with excellent pharmacology data, such as navitoclax, to a drug that still needs that data established. The situation is actually worse than this, however. Competitors with far better senescent cell clearance technologies, approaches with essentially zero side-effects, are emerging at the rate of one every year or so. Oisin Biotechnologies was the first, using a programmable gene therapy approach, and just this week another group announced their intent to form a company to develop their FOXO4-p53 interference method.

UNITY didn't emerge from thin air, and their precursor company does have a variety of patents and experience in trying to get immunotherapies and engineered viruses to work as senolytic treatments. They had plenty of time to try to get that to work and did not achieve those goals. With what is now a great deal of funding in comparison to the past, they could go back and try to make one of those approaches work. There is a great deal of uncertainty in that sort of endeavor, however. They should and no doubt will turn some of their funding to longer-term technology development with perhaps a five-year horizon, but when you take as much venture funding as this company has, the clock ticks very aggressively. They have to build a multi-billion-dollar valuation company pretty quickly, within the next couple of years. That has to be done on the basis of human trials starting right about now, since those clinical trials will take a year or so to run from idea to publication of results.

Another threat is that of medical tourism. Not everyone in this global industry is going to care about the opinions of the FDA. Given that existing senolytic drugs, and many of the new ones, can be purchased from established suppliers, there really is little to stop a large industry of medical tourism springing up for the very same drugs that UNITY is trying to put through the system. Or at the very least for drugs that are similar enough in effectiveness and side-effects. That will hamper UNITY's ability to charge regulatory capture prices; it is harder to do that when people can just go to Mexico at a tenth or less of the US price. That in turn will harm their valuation and ability to raise further funding needed to run treatments through the FDA gauntlet.

A final consideration is that everything UNITY spends money on today helps their competitors just as much as it helps them. One might argue that the big UNITY war chest is really largely a charity fund for industry development. Being a competitor to UNITY is one of the greatest places to be in modern for-profit biotechnology. They are doing all the work to prove out the industry, raise its profile, and demonstrate with ever-better clarity that targeted destruction of senescent cells successfully treats aging. They are doing more than their part to set a high initial valuation for any other new company with a credible technology for targeting senescent cells. This is all wonderful from the point of view of anyone waiting for the end result to emerge in clinics, but pretty terrible for UNITY from a competitive point of view. They'll be hip-deep in highly effective competing companies come this time in 2019.

As I see, it the UNITY management has a few options when it comes to strategy. Firstly they can forge ahead in the hope that regulatory barriers are good enough to allow a large valuation based on approval for a chemotherapeutic that is (a) inferior to a range of other treatments only a little behind in time to market, and (b) also available on the open market for medical tourism. Secondly they can couple that approach with significant investment in development of new drugs that can be patented, variants of those already discovered. These two are more or less the standard playbook for a new pharmaceutical entity, so they may well do this and only this. If they do, I think that their competitors, already equipped with far superior products, will eat their lunch over the next few years, however. The third option is to continue to prove out the market, make life easy for competitors, run the first trials, pull in another even larger round of funding at some ridiculous valuation, and then use those funds to buy the best of the crop of competitors, solving the technology problem.

This last option seems plausible, and is not uncommmon. I think it quite likely that UNITY will kick off their chemotherapeutic trials, publish the promising initial results while downplaying the side-effects, raise series C in 2018, and then buy whichever of the young companies in the space with a better senolytic technology wants to sell for a quick turnaround. Despite the enormous size of the target market here, ultimately every adult human much over the age of 30 buying a treatment every few years, not every entrepreneur wants to spend a decade fighting the FDA to make progress towards a narrow, limit use of their therapy. A quick win and sudden wealth is a strong temptation; anyone starting up a senescence-focused biotech company these days will have an acquisition by UNITY somewhere in mind as an option - as will the investors who back those companies.