NIH Funding Uncertainty Drives New Biotech Venture Fund

New Venture Fund Launched Amidst NIH Funding Concerns

Recent actions by the Trump administration prompted a directive to the National Institutes of Health (NIH), instructing them to implement restrictions on certain funding allocations to research institutions.

Despite a temporary injunction issued by a federal judge halting the implementation of this policy, potential disruptions and even complete eliminations of government grants directed towards early-stage biotechnology companies remain a concern. This assessment comes from Chris Gibson, CEO and co-founder of Recursion, a biotechnology firm specializing in AI-driven drug discovery.

Altitude Lab Pre-seed Venture Fund Established

Recognizing the uncertainty, Gibson, alongside experienced biotech entrepreneur David Bearss, identified a need and subsequently launched a new pre-seed venture fund. Named the Altitude Lab Pre-seed Venture Fund, it aims to provide investments ranging from $100,000 to $250,000 to between 10 and 15 promising biotech companies.

Companies previously eligible for Small Business Innovation Research (SBIR) grants from the NIH are specifically encouraged to apply for funding through this new venture.

Fund Management and Infrastructure

The fund’s operations will be overseen by Altitude Lab, a Salt Lake City-based nonprofit life sciences accelerator. Recursion initially established Altitude Lab five years ago to foster innovation in the biotech sector.

Gibson emphasized the importance of SBIR grants, recounting his own experience with Recursion. “Securing an SBIR grant was the very first step we took when founding Recursion,” he stated, “and it resulted in $1.46 million in federal funding.”

Impact of Early Funding on Recursion’s Growth

This 2014 funding proved instrumental in the creation of Recursion’s foundational dataset. This dataset subsequently powered the development of their machine learning algorithm and overall drug discovery platform.

Since its initial funding, Recursion has successfully attracted multiple rounds of venture capital investment from firms including Lux Capital, Menlo Ventures, and Felicis. The company completed an initial public offering in 2021 and currently boasts a market capitalization exceeding $4 billion.

Addressing the Funding Gap

Gibson expressed his hope that the fund will effectively “fill the gap” created by the current ambiguity surrounding NIH funding for emerging biotech companies.

“Investing in early-stage science inherently involves significant risk. Predicting the success of these companies is challenging, however, those that have received SBIR grants demonstrate a substantially higher likelihood of attracting subsequent private investment,” Gibson explained.

Ecosystem Development in Salt Lake City

Beyond financial support, the fund will contribute to the expansion of the biotech ecosystem surrounding Recursion. Selected startups will benefit from 12 months of complimentary office and laboratory space at Altitude Lab’s facilities.

“Our goal is to cultivate a thriving biotech hub, mirroring the innovation seen in Cambridge, right here in Salt Lake City,” Gibson concluded.