Philanthropist John Flatley Starts Venture Group to Back New Cystic Fibrosis Treatments
John Flatley, a real estate developer and philanthropist, has founded an investment group called Flatley Venture Capital to back life sciences startups with potential treatments for the genetic disease cystic fibrosis. Flatley, who has a close family member with the disease, told me he launched the venture group within the last few months.
Flatley Venture Capital, unlike a traditional VC firm, isn’t primarily focused on making profits on its investments, Flatley says. The venture outfit aims to provide between $200,000 and $2 million to support biotech startups that might not otherwise be able to afford to develop their technologies for the cystic fibrosis market, which consists of 30,000 patients in the U.S. and about 70,000 worldwide—numbers that pale in comparison to the cancer and heart disease markets. Flatley only expects to break even with his investments from the fund, he says.
Flatley, the son of the late Boston-area real estate mogul Thomas Flatley, has hired a Harvard University graduate named Alex Pickett as a senior analyst to evaluate deals for the venture group. While the group hasn’t made any investments yet, Flatley says “it’s going to be a substantial fund.” He says he is already considering backing two companies, which he declined to name.
This isn’t Flatley’s first foray to help advance cystic fibrosis treatments. He previously led the creation of a nonprofit laboratory, now called the Flatley Discovery Lab, in the Charlestown neighborhood of Boston. The nonprofit effort, quietly launched in 2008, has the mission of finding new drugs for cystic fibrosis, which causes the body to produce thick mucus that leads to chronic lung infections and poor absorption of nutrients. (The median life expectancy of someone with the disease was about 37 years in 2008).
When word got out last year that Flatley had started the research lab, formerly known as CFRx, scientists and entrepreneurs started to approach him with their ideas for CF treatments. But the nonprofit wasn’t an appropriate vehicle for funding those ideas—hence the new venture group.
“It’s something that has evolved out of necessity more than anything,” says Flatley, whose real estate firm is based in Braintree, MA. “People are coming to me with ideas and they need funding. In order to get these things launched, somebody needs to take that first risky step. I decided to take on that role in the CF community.”
Flatley is also continuing to provide financial support to the Cystic Fibrosis Foundation, the Bethesda, MD-based nonprofit that has a track record of stepping up and funding drug developers in need of cash for new CF therapies. The CF Foundation has given funding for drugs under development at Cambridge, MA-based companies Vertex Pharmaceuticals (NASDAQ:VRTX) and Alnara Pharmaceuticals. Flatley says his lab also provides workspace for an employee of the CF Foundation, Martin Mense, and that he sees his nonprofit and venture group as adding to the foundation’s efforts.
The Flatley Discovery Lab is focused on discovering small molecule drugs that target the underlying defect in the disease, the CFTR protein, similar to treatments in development at Vertex, says Richard Fitzpatrick, the lab’s chief scientist and operating officer. (Vertex’s lead molecule for the disease, VX-770, is in late-stage clinical trials, and the company aims to file for U.S. regulatory approval in the second half of this year. In mid-stage clinical trials the drug showed that it could improve lung function without causing serious side effects.)
Even with a great need for new therapies, there’s significant risk in trying to get drugs approved for cystic fibrosis, just like with treatments for any other disease. Last week I reported the outcry in the CF community after an FDA panel gave a negative opinion of a dietary supplement for cystic fibrosis patients that was developed in the Boston area and is now owned by the drugmaker Eli Lilly (NYSE:LLY).
With his new venture group, Flatley is poised to take on big risks and seed the next generation of drugs for this awful disease.