Baltimore biotech researchers court investors at Johns Hopkins showcase

Amid a difficult year for federal support of university research, researchers from one of the world’s leading biomedical research institutions gathered to cast their lot with private funders. 

The second annual Johns Hopkins Innovation Summit brought together 11 teams from the preeminent research university’s labs to present their research to more than 50 funders at investment firm Brown Advisory’s office in Baltimore’s Fells Point neighborhood. Myra Norton, head of innovation, startup and ecosystem innovation at Johns Hopkins Technology Ventures, stressed the event’s importance given the challenging life sciences funding climate.

“When you have a focused day and you know you’re going to see all these companies in the life sciences space, it allows you to get critical mass around investors and potential partners,” Norton, whose employer acts as an investment arm for Johns Hopkins University, told Technical.ly. 

Last year, more than half of the presenting companies secured funding or partnerships with invited investors, according to Norton. Like other pitch events, the summit also let companies get feedback on their research and helped them refine their strategies. 

New this year was a panel on the funding landscape, where investors spoke candidly about the state of capital in the field. The program also featured a keynote speech from prominent Johns Hopkins scholar and oncologist Victor Velculescu, who highlighted the success of DELFI Diagnostics. The Johns Hopkins spinout, focused on cancer detection, has raised hundreds of millions since Velculescu launched it in 2019.

Keep reading for highlights from the event. 

Biotech struggles against current regulation, past overvaluation and foreign competition  

The broader biotech market remains weak, with life sciences trading “flat at best,” per Albert Hwang, head of US healthcare investment banking at Morgan Stanley, during a panel. 

Hwang attributed the trend to regulatory uncertainty and new policies. That includes the “Most Favored Nation” rule, which sets US drug prices to the lowest level paid by economically similar countries, that the Trump administration introduced in the spring. 

Hwang also noted the sharp decline in biotech IPOs compared to previous years. BioPharma Dive, an industry trade publication, reported nine IPOS this year compared to over 100 in 2021. He added that Morgan Stanley plans to launch a new IPO next month as a “canary in the coal mine” for market performance.

The investor additionally referenced the competitive strength of Chinese companies working in oncology and immunology drug development. 

“If you are a company in phase two [of clinical research] or slightly later … you’re competing against China,” Hwang said. 

Eddie Cherok, chief business officer at Blackbird Laboratories — a Baltimore life sciences accelerator that co-sponsored the event—said that on the therapeutics side of biotech, much of the pandemic-era funding flowed into companies due to low interest rates.

“A lot of companies were funded that shouldn’t have,” Cherok told Technical.ly. “That put out the sentiment with a lot of investors that the bar is now higher to invest and deploy capital because so much had flooded the market years prior.” 

Rishi Gupta of New York-based healthcare investment firm OrbiMed also criticized past large funding rounds for companies unlikely to deliver strong returns: “As an industry, we lost capital efficiency.”

Genetics, neuroscience and oncology interventions on display 

The summit featured Johns Hopkins teams pitching projects in drug development, cancer treatment and medical devices. Each team had five minutes to present, followed by a Q&A with investors in the audience. Most teams were still in the preclinical stage, with a few in clinical trials, and the majority sought out seed funding.

Gene therapy, a technique that modifies a person’s genes to treat or cure disease, was a popular topic among investors and researchers.

Geoffrey Lynn of Aletira Therapeutics presented the team’s latest research on using alternative splicing, a natural cellular process, in gene therapy, which the team sees as particularly promising for treating hereditary hearing loss. 

“We would expect, with a potentially curative therapy, there would be high rates of adoption, with the market exceeding at least $500 million per year,” Lynn said during the pitch. 

Investors on the panel also raised safety concerns about gene therapy, noting that recent patient deaths have deterred some backers.

Andy Gotshalk pitched on behalf of Neurologic Solutions, which is developing a software analytics tool called EpiScalp to improve epilepsy diagnoses. 

EpiScalp analyzes electroencephalogram (EEG) data to detect subtle interactions between neurons across the brain. Unlike traditional EEG analysis, which relies on observing obvious seizure activity, EpiScalp can identify signs of epileptic activity even in normal-looking EEGs. This allows clinicians to detect underlying epileptic patterns that would otherwise go unnoticed. 

He said events like the summit are important for connecting with investors, even though many presentations focused on drug development, and the investors on the funding panel referenced greater interest in pharmacology.

The team received a $3 million Small Business Innovation Research grant last year to continue its work and is currently raising an additional $5 million. Gotshalk said the funding landscape isn’t as dire for the company’s work, particularly as companies like Elon Musk’s Neuralink raise awareness of neurotechnology. 

“They’ve been raising huge amounts of money, which — you can say whatever you want about that, but it has helped the industry,” Gotshalk told Technical.ly. “So smaller neuro tech like us are getting more visibility.”