The biotech company CureVac based in Tübingen is working on the development of a new tumour therapy based on RNA molecules. Dr. Ingmar Hoerr, one of the scientists who founded CureVac, tells Christoph Bächtle about the obstacles the young company had to overcome and the tough decisions that led to success. At the very start, he tells us the company owes its origins to a huge dollop of luck.
What gave you the idea of using RNA for therapy?
The idea developed while I was doing my doctoral thesis, in fact it came about quite by chance. I was doing an immunisation experiment using RNA as negative control. I assumed that the RNA would be degraded during the experiment, making it impossible to use as a vaccine. This did not turn out to be the case; I was able to measure an immune response, which suddenly made the whole issue very interesting, prompting me to look further into the issue. Since at the time I was close to finishing my doctoral thesis, I considered the different possibilities and decided to bring the whole thing to clinical application, i.e. commercialise the idea. But this required a lot of money.
Does this mean that the establishment of CureVac was the result of pure chance?
Yes, it was. Without wanting to state the obvious presumptuous, I think interesting things are often discovered by pure chance. Penicillin is a case in point. Without wanting to compare the two discoveries, events like this cannot always be planned. You just need to have your wits about you. Initially I thought that I had mixed up the controls, and that I had made a mistake. But I repeated the experiment and was able to confirm my previous results. Then one of my colleagues repeated the experiment. Eventually it became obvious that the RNA we had produced had the potential to be used as a vaccine.
There is a huge jump between the biological task of RNA, namely the transfer of information, and the idea of using it for therapeutic purposes. What made you so certain that your idea would in fact work to the extent that it formed the basis for setting up a company?
Making a groundbreaking discovery with something that should not have worked at all is always bound to throw up a huge challenge. Nature only has three biomolecules that it stores: proteins, DNA and RNA. Proteins are everywhere; a large number of anti-cancer drugs are based on proteins. Almost all biotechnology companies are working on something related to proteins.DNA is genetic material and is not really suitable as a therapeutic. It is far too stable, and using DNA in living systems is problematic. Gene therapy in the style of the 1990s barely exists nowadays because the risks are far too high.RNA is transcribed from DNA and then further processed into proteins. It is a bit like a letter that is sent in order to achieve a certain effect. I somehow sensed that in the form of RNA, nature had another molecule in store that we could work with. When I was doing my doctoral thesis, RNA was still something quite exotic. It was not yet something that scientists and companies were focusing on. At the beginning of the 21st century, all this changed when siRNA came to the forefront. With siRNA, RNA is used to switch off genes and reduce the expression of proteins. However, this is not the same technology as we use.For us, using a biomolecule that seemed to have slid into oblivion as far as science was concerned was a very attractive idea.
Is it sufficient for company founders to have confidence in their ideas and their vision, despite all the risks they face?
It is always necessary to be a little naïve in your approach. If you consider everything that could possibly happen, nobody would ever found a company. When we set up CureVac, we were all doctoral students with part-time jobs. We decided to push the project forward if we were able to do so without too many own resources. In actual fact, we didn’t have any money at all to invest in the establishment of the company. We just wanted to see how far we could get.I have to admit that the establishment of the company was also an experiment. We soon got totally caught up in the idea of setting up our own company and everything just seemed to move forward automatically. When one is fascinated by an idea, it is easy to find solutions to some of the problems. The financing round is one of the major challenges faced by company founders. People who are really focused on what they want, will find it increasingly difficult to say “I give up”. The first small successes keep you going, the first employees are hired for whom you are then responsible. And then the whole thing ceases to be an experiment. For us, company establishment was more like an unconscious decision. We just fell into this venture as if it was part of our daily work, our fascination with the idea and the tasks associated with company foundation absorbed us. All of a sudden we were a company and there was no turning back.
The prerequisite for your idea is a functional platform for the stabilisation of RNA, the production and handling of the molecules. Therefore, right from the outset you had to build something, i.e., develop the platform as well as having to investigate the therapeutic approach. Wasn't this all a bit too much to take on right at the beginning of company foundation?
Yes in a way it was, but at the beginning you don’t always realise exactly what you are taking on. When we started in 2000/2001, there was money available in the biotechnology sector. I could almost say that investors were hammering at the doors of start-up companies. But at that moment in time, we were involved in ensuring that our approach worked and carrying out additional experiments. When we were ready to look for investment capital in 2002, it had all of a sudden become very difficult to acquire money. We really became aware of our limits at that point and the further development of the company resembles a detective story.In 2000 and 2001 technology platforms were very important. Investors were seeking platforms that could be expanded. After this initial period of investment, the emphasis was more towards product-driven companies, the idea of being able to market products as quickly as possible and develop a profile. But we remained a platform company. We were versatile enough to be able to use the RNA molecule for all potential indications and in all variations, including for a relatively large number of cancer types. We had to reduce this versatility to a product and we decided to focus on melanomas. This made us a product-driven company and we changed our business plan accordingly.
Were there unique challenges in the development of CureVac; challenges that were specific for the technology you are using?
Our major problem was that we were "first in our class". There was no other company focusing on RNA. The typical argument that brooked no response put forward by many venture capitalists was: "If your idea is so fantastic, why has nobody else invested in the establishment of your company? Why didn't you or your professors invest larger sums in the establishment of the company and why is there no other company, in the USA for example, pursuing the same approach?
Therefore, in 2002/2003, we found that nobody really wanted to believe in the potential success of clinical testing on the basis of laboratory experiments. At that time, everybody seemed to be following "me-too" strategies, which meant investing in known systems such as antibodies that had already attracted the attraction of a known investor. Investors seemed to base their decisions on the decisions made by other investors before them. With an exotic RNA company that says to investors "we are doing something nobody else does", the venture had no chance. For company founders this meant that a new technology had to be related to existing technologies that investors were familiar with.
Does this mean that a competitor might have a positive effect because its success might convince investors to invest in another similar company?
Yes, there is a partial truth in what you say. Around 2000 when greed dominated the market and everybody wanted to be part of innovative technologies, it would have been good for companies to focus on something particular. At that time, it might have been positive to have something new. However, afterwards, there was an increasing fear of investing money in potential failures. I think, to some degree, that this is still the case today.It is important to cite positive market examples and to show that one is able to achieve amazing economic success. It is necessary to analyse the technology, work out the decisive interfaces and milestones in other companies and correlate this information with one’s own plans. This leads to a causality chain that makes it easier for investors to understand the background to the technology and the planned path to market success. This will convince the capital givers.
Can you give me an example?
One such example is the siRNA technology which was developed in 2001 and 2002. There was a German company, Ribopharma based in Kulmbach, which was definitely one of the most innovative companies back then. But the company had massive financing problems. As the company found it difficult to acquire enough money, Ribopharma was sold to the American company Alnylam. In 2008, Alnylam signed a cooperation contract with Takeda Pharma worth one billion dollars for the non-exclusive use of the RNAi technology which is based on the work carried out in Kulmbach.This is an example that could be used as a benchmark for our technology. But without wishing to sound presumptuous, we also have a technology that can do some quite unexpected things, just like the RNAi technology, and from which we can develop new therapeutic strategies. Just like our technology, siRNA is still in the clinical phase of development and a therapeutic drug has not yet been launched.It is easy to guess the critical aspects and the reasons why Alnylam and Takeda invested in the siRNA technology. Looking at our company, this creates a line that enables investors to more easily understand why we constructed our milestones in the way we did. We can compare it to the discovery of America by Columbus. Those that sailed to America after Columbus followed in his footsteps, tried to keep the same course as him and did not initially continue further north or south.
A name that is frequently mentioned with regard to investments in biotechnology companies is that of Dietmar Hopp. Do we need several Dietmar Hopps or are the general conditions already quite good for start-up companies?
Financing is always the main topic. We have to bear in mind that red biotechnology, i.e. therapeutic approaches, cannot be turned into reality overnight. A long-term financing horizon is required. And long-term means that there needs to be sufficient clinical data to convince pharmaceutical companies to support further development.
When clinical trials are initiated, or even before, one has to deal with regulatory issues. No matter whether you are called Roche, Novartis or CureVac, it is the same for all of us. For biotechnology companies you have no option other than to play the game. And the game is very expensive. But it is the only way of obtaining proof-of-concept, i.e. the proof that a therapeutic approach works in principle in humans. All in all, this requires a lot of money and this is our biggest problem.
There is the possibility of obtaining financing through the High-Tech-Gründerfonds. This enables start-up companies to develop ideas and turn them into reality. However, in the majority of cases, there is no money available to ignite the second rocket stage. Companies then run the risk of having initiated a great deal and finding themselves some way along the road to realisation, only to find that there are no second-round investors.
In my opinion, the fact that an increasing number of large investors such as 3i are retreating from the biotechnology sector is creating a major problem. The preparedness to invest in a technology with major future potential such as biotechnology is not as it should be. For me, this is a big mistake. The train is just starting to roll and investors who are looking to make a medium- to long-term investment stand a good chance of finding excellent conditions for their money. German companies are currently selling at a very good price and are finding it difficult to attract investors. The biotechnology sector needs investors that are willing to invest in this phase.
CureVac is in a quite comfortable situation because your platform technology is suitable for services and is able to generate immediate revenues. Or has the pharmaceutical business always been top of your wish list?
This question is the one that drives entrepreneurs. It is not entrepreneurship per se that motivates us, although it is interesting and exciting. From 2003 to 2006 we had a service-driven point of view. At that time we had no other option if we wanted to keep our heads above water. We provided services, sold RNA products, often without knowing what eventually happened to these services and products. At the same time we also tried to further our therapeutics developments as a back burner project. I don’t think there was anybody in CureVac’s management who would have been able to achieve a majority decision to focus solely on biotechnology services.What drives me and also my colleagues is the desire to turn our RNA technology into a therapeutic product. We no longer want to keep this product to ourselves but we want it to be directly used and accepted by patients. The term “comfortable” can be seen in many ways. Had we placed the money obtained from our services business in an “instant access account” and continued at a slower pace, we would now find ourselves in a comfortable position that would provide us with long-term financing. This was not our goal. We invested a lot of money in order to obtain the proof-of-concept for our therapeutic approach.
The CureVac executive management board has a lot of members who have completed scientific studies as well as MBA courses. How important is further training of this kind that goes far beyond your own area of expertise for high-tech company founders?
Such further training is very useful, in particular if one intends to move on from scientific laboratory work and achieve something more than just standing in the laboratory. As we are aiming to be at the interface between laboratory and application everything we do is governed by the market and finances. In addition, I wanted to know what I was writing about when I put together a business plan. I did not want to simply copy other business plans and use the abbreviation ROI somewhere in the plan, without understanding what it meant. This was why I decided to get further training in this area.As far as the content of such further training is concerned, you do not need to push the boat out. I don’t think it makes any difference where you acquire the knowledge, the information can quite simply be found in textbooks. What made the difference for me was not what I originally had in mind, namely the hard facts, but the so-called soft skills. MBA training brings together engineers, scientists, business economists and lawyers. The ability to work with such a broad range of different people, to develop different solutions in case studies and see that other people had different views and approaches, was very helpful for me. In addition, teamwork was also very important. Scientists are lone wolves who generally try to solve their problems themselves. The realisation that it is possible to gain expert knowledge from other sources is very important and can have an influence on how one runs the activities in one’s own company. One such example is hiring the right people for the company and placing them in jobs that suit their skills. This is currently my major task at CureVac - matching the right people to the right tasks. It is important to place people according to their strengths, without attempting to eliminate weaknesses or even turn weaknesses into strengths. These were major aspects that I learnt from the MBA course.