A nonprofit focused on the 1.25 million Americans with type 1 diabetes is pushing a new way to fund startups
- JDRF, a nonprofit type 1 diabetes organization, has its own venture arm, T1D Fund, which manages $60 million. That includes $5 million added to the fund on Tuesday from the Helmsley Charitable Trust.
- The goal of the T1D Fund is to to spark investments into startups that are translating scientific advancements in type 1 diabetes into approved treatments.
- Companies that the fund has invested in see the support as "catalytic," especially since it carries the weight of JDRF's reputation.
Type 1 diabetes, a condition that affects 1.25 million Americans, has seen its fair share of scientific advancements in the past few decades as researchers learn more about the disease, which affects the body's ability to monitor blood sugar levels.
But at the same time, those advancements haven't necessarily reached patients. So, JDRF the largest funder of type 1 diabetes research, started a venture fund called the T1D Fund to spark investments into startups that might be able to take those scientific advancements and turn them in to approved treatments.
"The research progress has been amazing, but what we're not seeing is the creation of a market," Sean Doherty, chairman of the T1D Fund told Business Insider. Venture capital, in particular, hasn't been very active in type 1 diabetes in recent years. "If we don't take charge of this, show leadership, nobody's going to."
The T1D fund got its start in January 2017 with $32 million. Since then, it's invested in seven companies, and now manages $60 million. That includes $5 million added to the fund on Tuesday from the Helmsley Charitable Trust, an organization that supports health programs including type 1 diabetes.
The idea of a nonprofit starting a venture arm is relatively new, but Doherty said the T1D is taking cues from the Cystic Fibrosis Foundation, which backed a startup that developed breakthrough cystic fibrosis treatments.
Felicia Pagliuca, vice president of cell biology research and development at Semma Therapeutics, described the T1D Fund's investment in the company as "catalytic." In 2015, Semma raised a $44 million Series A round for its treatments, which uses stem cells to generate insulin-producing beta cells.
Diasome Pharmaceuticals is another one of the seven companies that the T1D Fund has invested in. The company is developing additions for insulin that helps send the insulin molecules to the right parts of the body. The idea is that by getting it to the right spots, it might have a better chance of functioning even more like the insulin healthy people make.
Diasome CEO Bob Geho told Business Insider that a lot of funding disappeared for diabetes treatments roughly a decade ago, when the FDA wanted some more data around cardiovascular health. And because there are fewer people living with type 1 diabetes compared to the 29 million living with type 2, it was harder to get innovation there.
At the same time the T1D Fund invested, Diasome raised a $30 million funding round led by Medicxi.
In terms of inking future deals, the support that comes with the T1D Fund investment ideally could lead to more deals down the line.
"JDRF's investment has been duly noted by the pharmaceutical industry," Geho said.