Imagine a pill that mimics the effects of vigorous exercise on the body.
Three years ago, Bruce Spiegelman, a prominent Harvard scientist, said he had discovered an “exercise hormone” that promised to unlock a new way to treat obesity and diabetes.
It didn’t take long before a leading biotech VC firm, Third Rock Ventures, made a big bet on the hormone. Feverish press coverage followed, hailing a potential new miracle drug. So why did Third Rock quietly pull the plug on the project earlier this year?
The story of Spiegelman’s stalled exercise hormone, which he named irisin after the Greek goddess Iris, is a cautionary tale at a time of unbridled enthusiasm in the biotechnology sector. Innovations in cancer, hepatitis C, and advances in gene therapy have investors pouring money into drugmakers. Even with the recent market selloff, the Nasdaq Biotechnology Index has gained 28 percent in the past year, compared with a 2.3 percent drop in the S&P 500 Index. Yet a majority of biotech venture capital deals, like this one, fail.
Good Fat
“It’s rare to have investors want to talk about what didn’t work,” said Bruce Booth, a partner at Atlas Ventures.
Some 55 percent of biotech venture capital deals don’t earn back the initial investment, said Booth, who sees that failure rate as the price of pushing the boundaries in search of successful innovations. And as long as the other 45 percent of deals have healthy returns, VCs can still come out ahead, he said.
Almost from the start, the hype around irisin was high. The excitement began when Harvard’s Spiegelman published a paper in the preeminent science journal Nature in 2012, saying he had discovered a hormone that played a role in the conversion of “bad” white fat into calorie-burning brown fat. White fat is the stuff of beer bellies and jiggly arms, and brown fat, found in hibernating bears and newborn babies, is thought to be “good” fat.
Researchers have hypothesized that understanding how brown fat is stimulated would unlock therapeutic pathways to help obese individuals or diabetics lose weight.
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