President & CEO at Cottonwood Technology Fund

David Blivin

Venture capital is more important now than ever in identifying and supporting disruptive innovation that can impact industries and people’s lives. Almost every large company has discontinued and significantly scaled back its internal commitment to innovation. Most have now created venture groups to source and support innovation externally but generally will not lead investment rounds, so traditional venture capital firms are now the tip of the spear in finding and leading investments in companies with the promise to disrupt industries.

One of the areas with the promise to dramatically impact people’s lives is precision medicine. Precision medicine is an approach to healthcare and medical treatment that takes into account a patient's individual variability in genetics, lifestyle, and environment to guide treatment. Genetics holds the promise for much earlier detection, and then once detected it allows for treatment to be tailored to each individual rather than applying a ‘one-size-fits-all’ method. This, of course, results in producing better healthcare outcomes, and as such is often described as prescribing ‘the right drug to the right patient in the right dose at the right time.’ Precision medicine has provided breakthroughs in disease areas such as oncology, cardiology, immunology, and genetic disorders. In oncology, precision medicine has led to several successful blockbuster targeted therapies that recognize variants specific to a patient’s cancer cells, improving patient outcomes and enhancing cancer survival rates. Genetic biomarkers are central to enabling these capabilities and can be heavily utilized in the diagnosis, monitoring, and management of cardiovascular disease, immunology, and infectious disease.

Notwithstanding the above, not all areas of potential impact have yet been fully uncovered. One area yet to be impacted is psychiatric disease and mental health disorders. A new area of discovery in circular RNAs (circRNA). They uniquely transverse the blood-brain barrier and remain in the blood long enough to be captured and tested via blood samples. For example, the biotech company Circular Genomics (a Cottonwood portfolio company) is exploring the use of circular RNAs (circRNAs) as a potential biomarker for precision medicine in psychiatric and neurological diseases. They are found in abundance in the brain and blood and have been shown to play a major role in brain functions such as synaptic plasticity and neuronal connectivity. Due to their structure circRNAs are much more stable than other linear forms of RNA, and therefore offer significant potential in diagnostic and therapeutic applications across a number of disease areas (depression, Alzheimer’s, Parkinson’s). A first clinical test analyzes circRNAs in the blood to predict a patient’s response to SSRI antidepression medication, selecting and identifying patients that will respond well to different therapy options. This is an area of great potential as current first-line therapies that are standard of care for major depressive disorder (MDD) result in failure 60 percent of the time. Settling on an effective treatment most often happens only after patients have been through several months of treatment. These failed treatments and adverse events are a significant burden on patients, the healthcare system, and the economy. With $30bn spent annually on treatments for MDD and 60 percent treatment failure due to poor patient response, precision medicine approaches to diagnosis and treatment are much needed in psychiatry and will likely be the next frontier.

"Genetics holds the promise for much earlier detection, and then once detected it allows for treatment to be tailored to each individual rather than applying a ‘one-size-fits-all’ method."

Another Cottonwood company, Armonica, is focused on long-read DNA technology. Current short-read approaches represent virtually 100 percent of current DNA analysis but suffer from library preparation that destroys important epigenetic data. DNA does not change over time so the best case is identifying predispositions to various disorders – but not early detection. Long-read technology promises to be faster and cheaper, but most importantly retains the epigenetic data which can therefore detect triggering events for various forms of cancer and other disorders. This will be the ultimate in early detection and ultimately also lead to better medicine.

These are just two examples from our portfolio that are representative of hundreds of technologies being funded globally that will change the future of healthcare.