Business model

AIDD will seek to drive selected immunotherapy discovery projects from assay design for primary screening through to the final stages of lead optimization, such that molecules achieve preclinical validation and demonstrate high-potential ADMET profiles. Individual projects are expected to take three to five years and cost CHF3-5 million per project, depending on the complexity. The intellectual property created in each project will be placed in an AIDD sponsored special purpose vehicle (SPV), the ownership of which will be shared between AIDD, academic partners and investors. Some SPVs will be the source of new startup companies while other SPVs will be sold to pharmaceutical companies who have the infrastructure and competencies to complete clinical development, regulatory submissions, manufacturing, sales & marketing.

Partnering is expected to rapidly minimize or even obviate AIDD’s need for dilutive cash. An estimated CHF4 million in subsidies, venture philanthropy, angel and/or venture capital investments will be required over the first two years to develop the 4 projects. As AIDD matures, an ever-increasing portion of funding for operations will come from grants, risk-sharing collaborations, licensing fees and/or revenues from success milestone payments. AIDD also may receive near-term revenues by performing fee-for-service work and partnering to develop diagnostic biomarkers. 

In licensing deals, AIDD will seek upfront cash fees that represent a single digit multiple of the cost of the project (prior to licensing) plus research fees for any continuing involvement by AIDD and/or its academic partners. In addition, AIDD will seek potential success milestone payments, which can range into the hundreds of millions, plus royalties on sales ranging from a mid single-digit to a low double-digit percentage of global sales. Such terms are in line with what biotechnology companies and other institutes for drug discovery have recently achieved for projects in lead optimization.

Intellectual property protecting potential therapeutics also can be the basis for starting new companies. AIDD may, in select cases, elect to collaborate with investors to start asset-centric drug development companies. In such cases, AIDD would contribute IP and potentially some continuing involvement in early development, in exchange for equity in the startup. Investors in individual AIDD sponsored SPVs can expect a venture capital-like risk/return over shorter time frames of five to seven years.

Those interested to invest in AIDD may be encouraged to know that this business model has been proven by other institutes for drug discovery, including the Medical Research Council Technology (MRCT); Institute for Research in Immunology and Cancer - Commercialization of Research (IRICoR); Vanderbilt Center for Neuroscience Drug Discovery (VCNDD); and Lead Discovery Center (LDC). Several such institutes already have expressed a strong interest in partnering with AIDD in order to access its differentiated technology platform.