ALS is a uniquely challenging disease, and in order to best fulfill its mission to find effective treatments for it, the ALS Therapy Development Institute (ALS TDI) has adopted a similarly unique business model. ALS TDI is one of a very small number of non-profit organizations in the biotech industry–relying on money from donors, rather than investors, to fund our research.
How a for-profit biotech operates:
Unlike ALS TDI, most companies in the biotech industry are for-profit enterprises. Instead of relying on donations, they receive their funding from investors or venture capital. In addition to developing drugs to cure disease, they also must consider what practices will generate the best financial return for these investors. It’s a model that’s worked for decades, and has led to the development of countless life-saving drugs by incentivizing investors to support research through the promise of a financial reward.
However, a for-profit model faces challenges when dealing with a disease like ALS, commonly known as Lou Gehrig’s disease. ALS has a variety of causes – many of which, even after decades of research, remain poorly understood. This means that there is almost certainly not one “cure” that will work for everyone that has the disease. It is also rare when compared with conditions like cancer or heart disease – at any one time there are estimated to be 30,000 people in the US and 450,000 worldwide living with ALS. This means that if and when an effective ALS treatment comes along, it will likely be far from the biggest moneymaker for its producer.
Why ALS TDI operates as a nonprofit biotech:
When founding a biotech company whose sole mission would be to treat ALS, ALS TDI’s founder, Jamie Heywood, decided to organize the company as a non-profit. As a non-profit, we are only answerable to our supporters and the ALS community – we only need to worry about finding effective treatments for ALS, rather than providing a financial benefit to shareholders.
This also means that the ALS community itself has an opportunity to participate directly in supporting research for treatments in a way that’s unique both in the non-profit and biotech spheres.
The nonprofit model also has big implications for the way we approach our science.
“We depend primarily on philanthropy and fundraising,” says Dr. Theo Hatzipetros, ALS TDI’s Director of Pharmacology, “and this makes our budget a lot smaller compared to many for-profits. But at the same time, it makes it more predictable.”
Our smaller budget relative to a similarly sized start-up in the biotech industry means that we must be more selective about the projects we pursue, but this consistency also affords some advantages.
“We have to make smarter choices when it comes to science and what experiments we actually perform,” says Dr. Hatzipetros. “Because we cannot do everything. However, we can plan for experiments to run for longer periods of time. You can plan research programs that might need three years to complete because the funding is consistent. In the case of a startup, investors might tire of you and we might not exist in two years.”
In addition to giving us breathing room to explore the most promising experiments, the non-profit model allows us to take a more comprehensive approach to the disease.
“Uncertainty is not palatable to venture capital,” says Matvey Lukashev, ALS TDI’s Senior Director of Translational Research. “Venture funding, in many ways, is a deadline. [Our model] allows us to focus on the optimal intervention points, disease mechanisms, and direct studies of people living with ALS.”
Often, in the traditional structure of drug development, the biological mechanisms behind how a disease affects the body are studied in an academic setting, which informs drug discovery at for-profit biotechs through publications in peer-reviewed science journals. At ALS TDI we are able to study both potential treatments and the mechanisms of the disease itself, through programs like the Augie’s Quest Translational Research Center and the Precision Medicine Program.
As a non-profit, we are also not tied to particular technologies, compounds, or treatments.
“Most for profit companies are formed around a technology,” says Dr. Lukashev “Basically, there is a platform for technology and you are trying to exploit it the best way you can, and the indications, [or what disease a particular drug seems best suited to treat,] are somewhat secondary, in that you have to operate with that certain technology.”
While we do work to invent treatments in our own lab, such as AT-1501, we are also able to dedicate resources to replicating studies and validating potential drugs produced by others. As a non-profit, our only goal is to find treatments for ALS, whether they’re our intellectual property or not.
“Our set up promotes collaboration with outside partners,” says Dr. Hatzipetros. “More Big Pharma companies or academic institutions are willing to talk to us, because they don’t see us as a threat or a competitor. And this provides us with access to more technology and knowledge than might be available to a startup or for-profit biotech.”
However, while our non-profit status does afford us a unique freedom to pursue a variety of promising treatments without worrying about return on investment, it certainly does not mean we are not accountable to our funders. On the contrary, the fact that our research is made possible by donations means that we are directly responsible to our supporters in the ALS community, including many people living with ALS themselves.
“We have to be accountable to people living with ALS, not investors,” says Dr. Hatzipetros. “And this has an impact on the science too. We have to be more cautious in the interpretation of our findings. We cannot play up our discoveries. We also don't over-promise, in fear of under-delivery. And this isn't just for people with ALS, but also for the philanthropists, for the donors, because our credibility is at stake.”
“Another difference is the culture within the company,” Dr. Hatzipetros continues. “We’re more mission driven. We're less competitive amongst ourselves, and more collaborative. The team spirit is very strong. People living with ALS visit the lab, and this inspires, motivates employees. It gives us a sense of urgency and responsibility”
To learn more about the research being donate at ALS TDI, visit our ALS Research page here.