Impact Investing in Health Care

By: Maria Oldenburg and Baiju Shah

Impact investing, the approach of intentionally pursuing both profit and purpose through investments, has emerged as a unique asset class and growing area of interest for investors. Within the world of investment, the concept of impact investing has never been more popular—and at the same time, the criteria surrounding the trend have never been more contested. At BioMotiv, we believe that impact investing includes filling a crucial industry resource gap (aptly termed the “valley of death”) necessary to develop new medicines for patients and families waiting for new or better treatments and cures.

The concept of impact investing is guided by the 17 Sustainable Development Goals (SDG) set forth by the United Nations. SDG #3 is: “Good health and well-being for people.” While the concept itself is almost universally acknowledged, there has yet to be a consensus about the priority and value of different initiatives within the healthcare and biotech fields across the developed and developing worlds.

Much of the initial attention has rightly been allocated to initiatives aiming to improve care and treat diseases in developing countries. But the goal of good health and well-being is directed at citizens of the entire world. Across the entire world, millions of individuals are afflicted with diseases for which there are no meaningful therapies, let alone cures. These include individuals, in both developed and developing worlds, suffering from widespread conditions as well as millions of individuals afflicted with one of over 7,000 identified rare diseases.

The development of new medicines for these patients is impeded by market failures, namely a lack of industry and investor interest in academic discoveries. In biotech, this has been referred to as the “valley of death,” a term that morbidly describes the gap in resources and interest that exists for translating academic science into clinical products. For business reasons, pharmaceutical companies and even venture capital investors do not participate in this early activity, resulting in numerous research discoveries that hold promise remaining in papers and on the shelves of institutions.

BioMotiv and The Harrington Project were launched in 2012 to focus on this market failure with a mission to Accelerate Breakthrough Discoveries into Medicines for patients. Our structure uses a blended finance model, aligning capital and collaborations, to achieve significant societal benefit while also pursuing returns for stakeholders. Our investors and partners are impact investors who provide patient capital with a focus on ultimate patient impact.

This investment has allowed us to initiate development on programs for many diseases such as currently untreatable forms of blindness, cancer, immune, and respiratory disorders, many of which are rare diseases. Several of these programs have been advanced across the valley of death to partnerships with pharmaceutical companies and venture funders. Key to the success of these programs was the benefit afforded through venture philanthropy and impact investment that helped advance discoveries to the point where they could attract broader commercial interest.

At BioMotiv, we firmly believe that increasing impact investing activity in biotech development will make a positive impact in the progression of scientific discoveries into life-changing therapeutics. Over the coming months, we will continue to delve into the concept of impact investment, and the opportunity it presents to make real change for patients and their families.

Click here to learn more about our mission-driven model.