Backed by billionaires, a new biomedical institute tests an unorthodox approach

A group of high-profile scientists and billionaire financiers are building a new biomedical research institute that they claim will offer a new model for studying disease biology and developing new drugs.

Arena BioWorks, which publicly launched Friday, is led by Stuart Schreiber, a co-founder of the Broad Institute of MIT and Harvard who’s helped start more than a dozen biotechnology companies, including Vertex Pharmaceuticals and Ariad Pharmaceuticals. Steve Pagliuca, a former co-chair of Bain Capital and the owner of the Boston Celtics, will serve as Arena’s executive chair, while Newpath Partners Managing Partner Tom Cahill will join on as an “institute representative.”

They aim to recruit top scientists from academia, promising a research environment that spans many disciplines and cuts through the bureaucratic and funding challenges that can slow scientific work in a university setting. Their pitch has already lured Keith Joung, a pioneer of CRISPR gene editing, from Massachusetts General Hospital. Joung will join as part of Arena’s scientific team, along with “several other field leaders” that Arena plans to announce in the near future.

Based in Cambridge, Massachusetts, Arena is backed by the financial firepower of five founding investors who are among the wealthiest people in the U.S., including Pagliuca, Dell Technologies founder and CEO Michael Dell and philanthropist Elisabeth DeLuca, whose late husband cofounded Subway.

“Arena’s single source of funding frees our scientists from the typical short-term cycles of grant and venture capital funding,” said Schreiber, in a statement. “Our aim is to accelerate progression from deep mechanistic human biology to biotech-enabled drug development.”

Arena plans to support disease biology research and drug discovery work. If those efforts identify a promising “disease mechanism,” Arena will form a company around the idea to advance it further — in essence blending the academic model of a research institute with that of venture capital.

Uniquely, Arena says, the companies it creates will return a portion of any money they later make back to Arena, which will support the group’s long-term operational funding. Another portion of such returns would be distributed to Arena scientists.

The founders cite as inspiration Bell Labs, the famed research laboratory that contributed to the development of technologies like the laser, transistor and Unix operating system.

Arena isn’t organized around a particular therapeutic area or drugmaking technology. The group identified brain health, oncology and immunology as areas it plans to focus on, while noting interest in technologies as varied as molecular glue, covalent drugs and gene editing.

The group’s launch comes at a time when many biotech venture capital firms have reloaded with new funds, but are more cautiously deploying that money into new companies. A sector-wide downturn has challenged many startups and closed off traditional paths to investment like initial public offerings. There have been recent signs of momentum, however.

Along with Pagliuca, Dell and DeLuca, Arena is also backed by Michael Chambers, the founder and former CEO of drug manufacturer Aldevron, and Jim Breyer, the founder and CEO of Breyer Capital.

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