Venture Capitalists Invest in Alzheimer's Research
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Nov. 8, 2010
For more than five million patients and their estimated ten million caregivers, Alzheimer's disease is a scourge, a memory-stealing, brain-clogging affliction that costs the United States more than $170 billion a year, though its true impact on the lives of American families is incalculable.
In the first installment of our 2-part series, "Venture Philanthropy: An Investor's Approach to Curing Alzheimer's," reporter Sean Corcoran introduces us to a small group of local business leaders who are using their proven investment techniques — and their personal fortunes — to assemble what they believe are the world's most promising researchers to slow, stop or reverse the disease.
WOODS HOLE — When Henry McCance's wife, Allison, was diagnosed with Alzheimer's Disease about 10 years ago, he set out to learn as much as he could about the disease and sought to put his wife in the hands of the nation's best doctors. But instead of finding answers, McCance heard the same tired, disheartening advice from every physician they saw.
"They said, you might try three Advil a day, it might help slow the progression of disease," McCance recalled. They also recommended trying Vitamin E and cholesterol drugs such as Lipitor to slow its progression.
Further advice from doctors wasn't helpful. "'And, oh yes, and by the way there are class of approved drugs from the FDA for Alzheimer's disease... they probably won't help very much, they only treat the symptoms and don't improve it very much and their effectiveness doesn't last for long,'" McCance remembered doctors saying.
Looking For Answers
In New England, astute sports fans know McCance as the newest part-time owner of the Boston Red Sox. He quietly bought a small percentage of the team earlier this year. But in business circles, 67-year-old McCance is something of a legend. Two years ago, Forbes Magazine named him one of the nation's top 10 venture capitalists, citing his leadership role in building one of the nation's premier venture capital firms, Greylock Partners, in Cambridge.
The shallow, largely uninformed medical advice the McCance's received — the same that millions of Americans get every year — didn't sit well with McCance.
"For a venture capitalist who has been in an industry that has seen what entrepreneurial talent combined with the small supportive capital can do to change the way we operate in business in our lives, that was unacceptable to me for a disease over 100 years old," McCance said.
McCance largely made his fortune identifying the smartest, most visionary people in the world and then financially supporting them as they built remarkable companies. Now, along with two other local venture capitalists, he's compiling what he believes is a dream team of top researchers — and they're all using proven venture capitalist tactics to coordinate a search for a cure.
They say they have no doubt one is within reach.
"I believe in the power of entrepreneurism, and I believe that well-financed, passionate entrepreneurs can do amazing things that common sense would make you scratch your head and say, I don't think it's possible," McCance said. "It is possible."
Finding The Funds
About five years ago, McCance started talking with people about the world surrounding Alzheimer's research and its funding. Generally, what he found were problems, beginning with how much is spent. The National Institute of Health (NIH) spends about $20 billion each year on research. Of that, about $5 billion goes to cancer research, and about $3 billion to AIDS/HIV.
But NIH spends just over $400 million on Alzheimer's. Dr. Anne Young, the head of neurology at Massachusetts General Hospital, says government investment in research clearly pays off, but in the case of Alzheimer's, it's not nearly enough.
"The longer we live the more people we're going to have in their 80s and 90s whose hearts, lungs, joints and all those things are working fairly well, but if you're mind isn't there, well, what's the point?" Young said.
This year, Alzheimer's is estimated to cost Medicare and Medicaid $172 billion. By 2050, the cost is forecasted to grow to $1 trillion annually. Dr. Bill Thies, of the Alzheimer's Association in Chicago, says if new therapies are not found, the nation's health care system soon will be overwhelmed.
"The ultimate outcome of that brings forward an almost a science fiction sort of the outcome where you have demented people walking the streets because there's no other place for them to be," Thies said.
Alzheimer's deaths increased 45 percent between 2000 and 2006, while deaths from other causes like heart disease, stroke and HIV during that time decreased.
"The fact is that the under $500 million investment in Alzheimer's disease is, ought to be embarrassing to some people in the federal government," Thies said. "They just are not paying attention to what is really important to the American public."
Private pharmaceutical companies annually invest untold millions in Alzheimer's-related research, but they rely mostly on government-supported investigators and institutions to do the highly-expensive basic science work and then build upon that work to develop drugs. In the case of Alzheimer's, much of the basic science — including what causes the disease — still needs to be figured out or is up for debate.
Dr. Robin Barr of the NIH says he can understand why people say that Alzheimer's research is underfunded. But overall, money is limited, while needs are many.
"There are a lot of chronic diseases out there, and diseases that were formerly acute, like AIDS, that have become chronic thanks go the medical advances we've made, ditto cancer, thanks to the medical advances we've made," Barr said. "Alzheimer's is in there, it is important, and I, like anyone else, really want to see that happen and advocate for it. But we have to recognize that we have these other diseases too."
Medical Research, Venture-Style
About five years ago, Henry McCance was invited to a dinner in Washington, D.C.,where a who's-who of neurologists, biochemists, geneticists and other scientists with complimentary skill sets was gathered. The event was organized in part by Jackie and Jeff Morby, of Martha's Vineyard. Jackie is another renowned venture capitalist, and Jeff is the former vice chairman of Mellon Bank. The scientists told them all about low government spending levels, how grant reviews move too slow, and how researchers spend about 30 percent of their time doing grant-related paperwork. But what really concerned McCance was when he heard that government research rarely takes chances.
"They said, 'Ya know Henry, the grant-making process at NIH is so risk adverse that the grants that we do get through this very laborsome, bureaucratic process are equivalent to a one-yard plunge by the New England Patriots fullback," McCance said. "Nobody that that we are in touch with today offers us research-support for a well-designed 20-yard pass play."
The discussion moved McCance to join with the Morbys to create a unique type of foundation: one that would search for a cure the same way a venture capitalist firm would handle its most valued new start-ups.
They would use a focussed approach, determining where the science needed to go, and then approaching the best researchers in the world to do the work.
Together with Phyllis and Gerry Rappaport of Nantucket and Boston, the three founding families would pay all overhead costs associated with running the foundation, so every donated or granted dollar goes directly into research.
"We've got for sure nine or ten researchers that are absolutely at the top of their game. They know that we are going to fund their most important projects, that they cannot get funded by this more conservative one-yard-at-a-time approach that the NIH or the Alzheimer's Association or other more bureaucratic organizations or groups constrict them to," McCance said.
They called their organization the Cure Alzheimer's Fund, and since 2006, it has assembled more genetic data about Alzheimer's than perhaps any organization in the world, uncovering more than 100 genes that, when inherited in certain forms, play significant rolls in determining if someone gets Alzheimer's disease.
But even if Cure Alzeimer's Fund lives up to its name, its work will be too late to help McCance's wife, Allison.
"I think I am realistic enough to know that the process of drug discovery is slow. The process of FDA approval is slow. And that anything that our little foundation achieves in the way of giving mankind better understanding of the disease, which hopefully will give for-profit companies clues that may lead to therapeutic programs for people in the future, none of that will be in time for my wife," McCance said.
After a career of fostering some of the most successful technology companies in the world, this is McCance's first philanthropic venture. And while it may be too late for Allison, McCance says he's doing the work for other families who might someday face the same devastating diagnosis.
Coming Tuesday: Part two of this series, which looks at some of the research and accomplishments of the Cure Alzheimer's Group, and how some of the information its uncovered may change how scientists think about the underlying causes of the disease.
Venture Capitalists Invest in Alzheimer's ResearchNov. 9, 2010
Wanted: A Man on the Moon Project to Cure Alzheimer's disease.
By Sean Corcoran
With no cure on the horizon and few treatments available, the government spends about $170 billion annually caring for Alzheimer's patients. By the year 2050, that cost is expected to rise to $1 trillion annually, with about 1 million new Azheimer's patients being added each year.
In the second part of our series, "Venture Philanthropy: A Business Approach To Curing Alzheimer's Disease,' Sean Corcoran reports on a group of local business leaders who are frustrated with the slow pace of government-sponsored research, so they're using their venture capital experience to coordinate some of the nation's top doctors in a search for a way to stop Alzheimer's.
"This is where we amplify the human DNA. We put the human DNA on chips, and these machines here, you put the chip in this slot and close it up," Tanzi explains. "And the machine adds different liquids to the chip to process it, to actually look at the variants in the DNA and start elucidating the differences."
Using these gene chips, the machines sort through the genetic information from hundreds of families whose members have Alzheimer's Disease -- an important step in the process of determining what genes play a role in Alzheimers -- either advancing the disease or preventing it.
"And then you put it in, this is an oven, it's just a simple oven, and you put the chips in here and they turn around in this carousel and they bake," Tanzi continues.
The chips are then read by a computer that displays the individuals's particular genome -- all the genetic information that was passed down from their parents. Researchers compare the genomes of brothers, sisters and cousins to determine why, genetically, some family members got the Alzheimer's and others didn't.
"And this is the most beautiful research that you can do because you basically are getting new clues that are totally unpredictable, you are getting new genes and new proteins that are sending you in totally new biological pathways that you would have never thought of that could be involved with Alzheimer's," Tanzi said.
"This is the most beautiful research you can do because you basically are getting new clues that are totally unpredictable."
-- Dr. Richard Tanzi
Tanzi calls this search for new genes the Alzheimer's Genome Project. When he started in 2006, only four genes had been linked to Alzheimer's -- and Tanzi had co-discovered three of them.
Those first four genes led to significant understanding about how Alzheimer's works, and they also led to new drugs to help dampen its effects. Tanzi was confident there were other genes involved in Alzheimer's, each one a potential new drug target.
The problem was that finding them would cost millions. And such a risky and expensive project was unlikely to be funded by the federal government or even private foundations.
"I was thinking, how do I ever raise enough money to be able to scan the whole human genome? It was kind of frustrating because here you knew you were able to scan the whole human genome in an unbiased manner to find the rest of the Alzhimer's genes, and I knew that 70 of the recent genes remain missing, but it was going to cost millions, a couple million dollars to do the experiment, and then along came my white knights!"
Tanzi met those 'white knights' about five years ago. They were representatives from three prominent Boston-linked families, -- the Rappaport family of Nantucket, the Morbys of Martha's Vineyard and the McCance Family of Boston.
Together, they would form a group called the Cure Alzheimer's Fund and become Tanzi's biggest supporters and his primary funders. Tanzi told them about the cash-register-like DNA machines just coming on the market, and he talked about the recently completed Human Genome Project, a map of humankind's 25,000 to 35,000 genes. The families believed Tanzi when he said genes are the compass to finding a cure or a preventative for Alzheimer's.
Now, Tanzi has been looking for four years, and he's identified more than 100 additional genes implicated in the disease. Now, he's painstakingly testing the most important ones for undeniable proof of their role.
"So amongst the ones we found, beyond the original four, we have one, called Adam 10, where we did the whole package with Cure Alzheimer's Fund support. We found the genetic information that implicated the gene, we found defects in the gene, and we have shown using animal models -- mouse models -- how these defects in this gene causes Alzheimer's disease. And now we can think about drug discovery," Tanzi said.
What makes the Cure Alzheimer's Fund somewhat unique is its leadership. The group's founding families are mostly venture capitalists who made their fortunes identifying the world's great visionaries and then supporting them as they built some of the most transformative companies of the 20th century. Now, they're turning to address Alzheimer's, largely because they see it as the best way to use their earned fortunes to help humankind.
"I knew that 70 of the recent genes remain missing, and it was going to cost millions... then along came my white knights!"
-- Dr. Richard Tanzi
Before investing in Tanzi, the founding families asked him and other medical investigators to create a comprehensive research plan, or roadmap, that would lead to finding a drug that can stop the pathology of Alzheimer's at its earliest point.
Jeff Morby, founder and chairman of the Cure Alzheimer's Fund, says with Tanzi taking the lead, they've recruited a consortium of top-flight doctors, the best and brightest they could find from labs across the country, to do the work their plan requires.
"The roadmap defines the things we are going to fund in more or less priority fashion. So as we discover new insights into the science of Alzheimer's, we are constantly revising the roadmap," Morby said. "And this is part of the venture capital approach to venture philanthropy that we're talking about."
Dr. Anne Young, chief of neurology at Mass General Hospital, says the families behind Cure Alzheimer's Fund have enabled Tanzi and a host of hand-selected other doctors to take risks and chances with their research, supporting projects other funders likely would be reluctant to touch.
"Dr. Tanzi finished the entire screen of the genome for genes. And he's got a whole repertoire of genes, each one of which is a drug target for curing Alzheimer's," Young said. "And now it's simply a matter of working through those end models and testing whether you can interfere with it and change the disease. This is so different from what we had 10 years ago. It is a breakthrough to have that kind of approach."
Young, Tanzi and others point to the limited amount of federal dollars being put into Alzheimer's research as a real problem. Less than $500 million a year is granted to Alzheimer's investigators, compared to billions given to other diseases. Alzheimer's research is not science constrained, they say, it's budget constrained.
"I think we have a lot of really good avenues to take, they just have to be taken. We need the funds and we need to go there. It's like a roadmap is there. I always think of it as the Yellow Brick Road. First you have to go through the field of poppies and the enchanted forest. … So we know we're going. It's no longer like 20 years ago when we didn't know what we were grasping at. We have genes now. We have drug targets."
"It's important to understand we can move fast, and we pick the best researchers."
-- Jeff Morby
The group isn't just doing genetics. It funds a variety of experiments looking for ways to detect symptoms early; and even methods of administering the drugs they expect will be developed from the information they gather. For example, one of their doctors has found a way to monitor a single neuron in the brain of a mouse to see what impact a medication will have on the functioning of that neuron, allowing scientists to test potential medications.
Another study, Morby says, involves going through the brains of dead Alzheimer's patients and finding where the damage has taken place and then correlating it with the genomic information.
"This person has damage to the hypocampus and he has this kind of gene, we can say, okay, this kind of gene and this damage are related," Morby said.
In addition to raising private donations via their website, as well as attracting some federal research dollars, the now-four founding families have spent more than $10 million of their own fortunes on research. $10 million in five years may not sound like a lot of money for such successful families -- but that's by design, says Henry McCance, another founding family member and the chairman emeritus of Greylock Partners, one of the nation's premier venture capital firms. McCance says one of the tactics venture capitalists use is to invest slowly.
"(At) Greylock when we do a startup project, we put enough money in to get to an important milestone or development, and then we reassess the project," McCance said. "And if the momentum is good and if the opportunity looks as sound as we originally expected and the management team has grown, and all sorts of other factors, than we will, if you pardon the phrase, we will double down on our investment. We'll enthusiastically put more money behind."
Even with McCance ready to reinvest, the problem Cure Alzheimer's Fund faces is the approximately $3 million a year the founders are putting into the organization is not enough to cover everything they think needs to be done to find a cure.
So they're contacting billionaires, and putting out calls to their colleagues, business competitors, other foundations and universities. It's time for a Man on the Moon project to stop Alzheimer's, they say, before the sheer numbers of demented people overwhelms the nation's healthcare system.
Visit the Cure Alzheimer's Fund site >