Financial resources remain a key limitation when developing a new drug for the market. Phase 0 imaging studies can be used as an investment strategy to overcome this hurdle.
It is essentially a de-risking mechanism for investors that at the same time can accelerate your drug development.
Here’s how it works and why you should include it in your next pitch to investors.
During a Phase 0 imaging study TRACER labels your compound with a fluorescence dye or radionuclide. A microdose of the labeled drug is administered to the target population. In the next step molecular imaging techniques are used to visualize and quantify the biodistribution and pharmacokinetics of your tested compound.
The obtained in-human data allows you to make a go/no-go decision early in the drug development process. Therefore, it limits investment risks and at the same time accelerates development time.
In this article, you’ll read an in-depth overview of using a Phase 0 imaging study in your fundraising pitch. Because every project and pitch are different, we are offering knowledge sessions. In this session with an expert from TRACER you can obtain all the information needed for your pitch. Contact us now or read further about the positive effects of Phase 0 imaging studies on raising capital.
More efficient and less costly drug development process
With a Phase 0 imaging study you obtain efficacy data in your patient population. Usually, within one year and before starting your Phase I trial. In other words, this FDA/EMA approved method allows you to see if your drug targets the tissue of interest in patients or not (PK/BD data). Besides that, this can lead to a more efficient and less costly drug development process. It also makes your pipeline more attractive for investors.
Benefit for investors when you use a Phase 0 imaging study
A Phase 0 imaging study de-risks the investment into the development of your compound. Why? Instead of asking for an amount between €1 to €15 million, a figure between €400K to €1.5M is usually sufficient. The exact amount depends on the type of your trial. As you need a lower initial investment the investment risk automatically becomes lower as well.
73% higher probability of success in later clinical stages
With a Phase 0 imaging study you build in an additional de-risking mechanism into your drug development process. More precisely, positive PK/BD data increases the probability of success of your compound in later clinical stages with 73%.
Immediate ROI and next funding rounds
Positive in-human data gives your investors an immediate ROI on their initial investment, as your company’s valuation will increase. At the same time, it would justify further capital from current or new investors. After all, further investment is more likely to generate ROI. Of course, if the data is negative, investors can avoid further investment and minimize their risk.
How to use Phase 0 imaging in your investment strategy/proposition
Let’s say you expect to need €10M to complete Phase I, but decide to first conduct a Phase 0 imaging study. This would mean that you need €1.2M for your trial. This is a significantly lower number than the initial stated €10M. Of course, you will also need (at least part of) the remaining money to further develop your compound. Phase 0 data limits trial and error in further phases and can therefore decrease development costs. Now how would you go about this in your fundraising pitch?
Step by step
From experience, we strongly advise to use the completion of your Phase 0 study as a milestone in your term sheet with investors. In other words, first ask an initial, much lower, investment of €1.2M. Then if you generated positive data this investment is followed by a second investment.
As stated earlier, positive in-human data can also increase your company valuation significantly. This means that investors can get an immediate return on their initial investment. At the same time, it makes your position stronger in next fundraising rounds. If you use the same investors for the next phase you can give these investors a discount on the new pre-money valuation (e.g., 10% or more). In other words, they will receive a higher ROI as a reward for believing in you from the start.
Including Phase 0 imaging studies in your fundraising pitch will make your pipeline more attractive to invest in, as you minimize the investment risk. It will also set you up to raise funding more easily in upcoming rounds. Not sure how to include it in your pitch? Contact our team to define your Phase 0 investment needs.
Contact TRACER or read more about Phase 0 imaging.
Difference between TRACER Phase 0 and preclinical trajectory
Regular preclinical studies are conducted in animal models before going into Phase I. We are often asked what the difference is. How does a Phase 0 study relate to preclinical animal studies? Studies that generate animal data don’t necessarily reflect in-human efficacy. For example: positive mice data is by no means comparable to the therapeutic effect of your drug in patients.
In-human data will always be better that preclinical animal data
With Phase 0 imaging studies you can go straight into the target patient population after merely a single-dose extended animal toxicity study. By conducting TRACER’s Phase 0 imaging study you can skip costly large animal studies such as pigs, dogs or non-human primates. The PK/BD data generated in your Phase 0 study makes the difference between a well-informed or uninformed start of your Phase I-III clinical trials.
Conducting a Phase 0 imaging study can have many benefits for your drug development and (potential) investors. Fast go/no-go decisions can help you prevent spending time and resources on inefficient compounds. The TRACER method provides you with the data to identify your compounds with the highest potential to succeed. The next step to apply this to your pipeline is to get in touch. During a meeting we can go over any further questions and showcase our results.