Why investors trust their gut about the human microbiome

The increasing popularity of the human microbiome in biotech has become a source of scientific and investor excitement in recent years. Microbiomes, or the genes of a community of microbial cells (or microbiota) which the body is host to, have unexpected benefits and implications for overall health, from regulating the immune system, to influencing conditions such as obesity, diabetes, cancer and aging. While it is in the gut that humans have the most diverse and densely populated microbiota, their influence and presence in other parts of the body has made the microbiome comparable to “a newly discovered organ” and a new route for therapeutic intervention, leading to a wave of start-ups and IPOs in the field.

The role of the microbiome in nutrition, immunity and organ function:

Microbiomes consist of microbiota like bacteria, fungi, archea, viruses and other microorganisms that offer significant benefits through their genes. Microbiota found in the gut, help with the production of vitamins, digestion of food, storage of nutrients and the promotion of a healthy metabolism. They help maintain the integrity of cell connections in the intestinal lining, preventing harmful bacteria and toxins from leaking through the intestinal wall. The gut microbiota is also closely linked to the immune system and the regulation of inflammation.

The different types of microbiomes also influence broader systems in the body. Microbiota have a role in promoting cell division essential for organ development and healing. In the brain, they produce compounds which are important for development. They promote the sending of signals from the neurons around the gut (known as the “second brain”) to the brain via the vagus nerve. On the skin, they create natural moisturisers that keep the skin free from cracks that can be penetrated by foreign bacteria. On the mouth and sinuses, they protect against pathogens. Microbiota also produce compounds that help lower blood pressure and protect organs from being damaged by toxins. Microbiomes are even thought to influence aging and age-related inflammation.

Microbiome companies and transactions in biotech and consumer care:

Because of the discovery of the many roles of the microbiomes in the body, a wave of biotech and consumer care companies have launched in recent years. Notable biotech companies include Enterome Bioscience, whose lead product EB8018 for Crohn’s Disease works by inhibiting the adhesion of pro-inflammatory bacteria to receptors on the gut wall; Second Genome, whose lead product for NASH and IBD inhibits an inflammation pathway discovered using their microbiome discovery platform; and Rebiotix, Seres Therapeutics, Vedanta Biosciences and Microbiotica, who are developing microbe-based therapies for the treatment or prevention of C.difficile infection.

Consumer care companies have also developed supplements and over-the-counter drugs based on the microbiome. Whole Biome is developing medical foods consisting of pre- and probiotics that promote the production of butyrate, which helps insulin to work effectively in Type 2 Diabetes. Evolve Biosystems markets Evivo, a probiotic supplement that improves the infant microbiome by helping with the digestion of complex oligosaccharides in breastmilk. AOBiome’s consumer arm Mother Dirt markets AO Mist, a probiotic spray that restores ammonia-oxidizing bacteria on the skin.

The excitement in the market has also led to a slate of IPOs and fundraising in recent months. Evelo Biosciences, which develops monoclonal microbials, raised $85m in their IPO in May 2018. In Feb 2019, Axial Biotherapeutics, which develops gut-targeted programs for Parkinson’s Disease and Autism Spectrum Disorder, raised $25m in their Series B round. Kaleido Biosciences, which is developing a product to reduce ammonia production in Urea Cycle Disorders by modulating the metabolic output of the microbiome, raised $85m the following day.

Finally, there has been a series of promising M&A and licensing activity for microbiome companies. Ferring acquired Rebiotix in April 2018, and partnerships have been inked between Pfizer and Second Genome to conduct microbiome research in obesity and metabolic disease in 2014, BMS and Enterome for the discovery and development of microbiome-derived biomarkers in immuno-oncology in 2016, J&J and Vedanta to license commercialisation rights for their IBD candidate VE202 in 2015, and Genentech and Microbiotica to discover, develop and commercialise biomarkers, targets and medicines for inflammatory bowel disease.

Teething problems:

No great source of innovation is without issues, however. According to Labiotech.eu, finding data on microbiomes and making sense of this data is still a challenge. As microbiomes and the factors that influence them are so diverse and variable between individuals, current techniques to characterise microbes are not precise enough, and associating specific microbial genes or strains to a specific function or disease is difficult. Improvements in technology and studying the microbiome over longer periods of time can help with this, and many microbiome genomics companies such as Eagle Genomics are attempting to tackle this.

More importantly, finding the right therapeutic approach to diseases is important. For instance, fecal microbiota transplantation (FMT) was seen as a promising approach for C.difficile infections, but there are issues in the variability of the composition of transplants. Seres Therapeutics failed to meet their primary endpoint in Phase 2 trials with FMT; the FDA has subsequently allowed for a new, larger pivotal trial, but the company has struggled with recruitment. Live bacterial therapeutics using a single strain of bacteria to rebalance the microbiome is another popular approach, but there are questions about the ability of the bacteria to successfully thrive in the gut. Alternately, other therapies focus on removing certain bacteria strains, or using the microbiome to discover targets.

Other technical and operational aspects also need to be considered: manufacturing of live bacterial products is likely to be complex in the first instance; the approach to patent protection is still evolving; and regulatory policy might not be as sure-footed, if not overly cautious, given the nascent stage of clinical development in the area.

Like immuno-oncology, gene therapy and other ground-breaking approaches that have now seen recent approvals, microbiome-led therapeutics, while with its own challenges, remains a field of great promise. While it is hard to tell which of today’s companies will succeed, the breadth of approaches is encouraging and contributes towards increasing knowledge in the field, and is considered favourable for science and human health overall.

Read more on the Results Healthcare website - https://resultshealthcare.com/insight/why-investors-trust-their-gut-abou...
Author: Annabelle Guillermo, Director at Results Healthcare

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