Investing in Type 1 Innovation—JDRF’s T1D Fund
Editor’s note: Information in this piece was provided via interview with Sean Doherty, executive chairman of the T1D Fund. This interview on Type 1 Diabetes Research funding was created in partnership with JDRF, an active partner of Beyond Type 1 at the time of publication, through the JDRF – Beyond Type 1 Alliance.
Driving Innovation in Type 1 Diabetes
Have you ever wondered how a newly discovered treatment, or even a potential prevention or cure for type 1 diabetes would make it from a scientific lab into your hands? It’s a long pipeline involving research funding, FDA approvals, continued research and development to scale up the solution for a large population, private and sometimes public investment, business development and supply chain logistics, negotiated coverage by health insurance companies and more.
To navigate and propel promising treatments and therapies along this pipeline and attract more private investment to the fight against type 1 diabetes (T1D), JDRF created the T1D Fund. A subsidiary of JDRF, the T1D Fund is a venture philanthropy fund that uses donated capital to accelerate life changing solutions to cure, prevent and treat type 1 diabetes through catalytic equity investments. Unlike a traditional VC firm, instead of returning profit to investors, the T1D Fund routes any money earned from the investments back into the fund for future investment to supercharge the impact of donor contributions.
Sean Doherty, executive chairman of the T1D Fund, shares, “When we looked at the landscape in 2015, we had a few pretty fundamental observations. The first is that there was essentially zero venture investment in type 1. The second observation was that there was an awful lot of untapped potential within JDRF. The research scientists that were internal to JDRF knew more about the disease probably than just about anyone. We combined these two observations to create a venture fund that would spark the market we need to cure this disease.”
How the T1D Fund Works
To get the T1D Fund started, JDRF provided $32 million of investment capital over four years. The T1D Fund is also funded by private donors, with a minimum donation of $500,000. After its initial funding, the fund raised an additional $50 million from approximately 70 donors, most with a direct connection to type 1 diabetes. Because any money earned from the Fund is routed back into future investments, donors do not receive any return on their money, making the Fund different from a typical venture capital firm.
However, donors are given insight into how the T1D Fund is driving impact, with full transparency into where their money is going and what it is accomplishing. “We think that the people who are giving these kinds of levels are impact philanthropists,” says Sean. “They’re looking at an opportunity to change the world through making a good run at cure therapies for this disease.”
As the T1D Fund helps get initial research moved into commercial development, they also prove the stability of these companies to other venture capital firms, attracting more investment into the space. “Over the course of the last four years, we’ve attracted more than 20 venture capital firms into type 1 diabetes who had never made a type 1 investment before,” Sean explains. “Those firms came with between $200 and $250 million of fresh money invested into companies working on this disease, in addition to the $60 million that we’ve invested.”
What the T1D Fund Does
Creating the T1D Fund solves multiple issues. It creates a clear pipeline for scientists to know that promising work could be taken from research to a commercial product, attracting more researchers into the space. It allows people in-the-know—highly knowledgeable healthcare providers and researchers working with JDRF—to spur the best possible solutions to market. It lowers the barrier to entry for smaller but highly promising solutions that normally would have had to fight for funding in a crowded market. And it means that promising therapies—better and safer treatment options, the ability to delay or fully prevent the onset of T1D, and possible cures—can get into the hands of those impacted by type 1 diabetes as quickly as possible.
The Fund’s current portfolio includes therapeutics, devices, vaccines and diagnostics. About two thirds of the portfolio is made up of more established companies that were not already working in the type 1 diabetes space, but were working on treatments and therapies for diseases with a similar biological profile. The T1D Fund worked with them to add type 1 diabetes indications into their development, quickening the pipeline on work that was already being done.
An example is SQZ Biotech, a cell therapy company that was working on inserting materials into cells that would help the immune system destroy cancer cells. The T1D Fund learned that the founder was interested in getting into autoimmunity. With funding, the biotech company is now using its technology platform to insert material into beta cells to induce immune tolerance.
Another example is Pandion, a tissue-targeted immunotherapy company that had endocrinologists on staff at the company, but weren’t working on type 1 diabetes because they couldn’t find anybody who wanted to fund it. With funding from the T1D Fund, the company added type 1 diabetes indications to its research, and is also working on biological solutions to regulate the immune system response in T1D.
The Future of T1D Innovation
“I want more smart people with capital thinking about type 1 diabetes and realizing the extraordinary opportunity that we have in front of us here,” says Doherty. As the T1D Fund grows, its aim is to take the exciting research funded by JDRF and others to the next step. “I think we’re really in the early beginnings of the power of what this funding can accomplish on behalf of [the almost] 20 million people with this disease.” You can learn more about the T1D Fund here.
If you would like to contribute to T1D research and fund cures, make a gift to JDRF here.
