Explaining Our Bet on Sherlock Biosciences' Innovations in Viral Diagnostics

In this post, “we” refers to Good Ventures and the Open Philanthropy Project, who work as partners.

Note: This is an experiment with a different style of blog post, aiming to more casually share thoughts from a broader set of staff. We’re interested in feedback on this format.

Earlier this year, the Open Philanthropy Project awarded a five-year grant and made an additional investment in Sherlock Biosciences to support the development of a diagnostic platform to quickly, easily, and inexpensively identify any human virus present in a patient sample.

Development of this technology would represent a significant advance in viral diagnosis, and could both reduce threats from viral pandemics and also benefit health care broadly. In one implementation of the test, which might be suitable for use in field clinics or for home use, samples can be tested in less than an hour using just a strip of paper.

We believe that the broad potential of Sherlock’s technologies is matched by co-founders and a team of deeply experienced scientists, entrepreneurs, and clinicians who are aligned with our goal of making a universal viral diagnostic system available worldwide. The new company, recently spun out of the Broad Institute of MIT and Harvard, is developing technologies licensed from the Broad Institute and Harvard University’s Wyss Institute.

Open Philanthropy Scientific Research Program Officers Heather Youngs and Chris Somerville sat down with Communications Officer Michael Levine to talk about the rationale for the grant and investment, how market forces affect biotech companies, and what we hope Sherlock Biosciences will be able to accomplish. The questions and answers have been edited lightly for clarity.

What problem is this project trying to solve?

Chris: In 2015, a Korean national went back to Seoul after a vacation in the Middle East. He wasn’t feeling well, he went to a hospital, and they couldn’t figure out what was wrong with him. Even modern hospitals have a very small number of things they can diagnose, and if they can’t diagnose it, they get a sample and they send it off to a regional facility. Two weeks later, when they discovered he had MERS, they quarantined around 17,000 people that had come into contact with him. It cost billions of dollars, and more than 30 people died. It could have been a lot worse if that strain of MERS had been really virulent. If that had been an even more deadly and infectious agent, it would have been a catastrophe. In a city of 10 million people, it could have started a global pandemic. On the other hand, it could have been much simpler if doctors had been able to identify the virus within the first few hours after the patient arrived at the hospital.

Heather: You can’t treat an infectious disease if you don’t know what it is. If you do know what it is, that can help you (1) treat the patient faster, and (2) use the appropriate drugs so you’re not using antibiotics when you need an antiviral and encouraging antibiotic resistance, or vice versa. It is surprising that, in this day and age, it may take weeks to know what virus you have. We were watching a recent influenza epidemic and knew many people were being misdiagnosed. You can’t do proper epidemiology if you don’t know what virus you have. All of these things are important for general health and pandemic preparedness. We really want someone who’s got an infectious disease to be able to know very early on exactly what they have and seek the appropriate treatment. That’s the goal.

Chris: Our interest is in getting much, much better diagnostics into widespread use. This assay is much more sensitive and quick than currently available methods. We think it can be done within an hour of arriving at the hospital. In one implementation of the test, which might be suitable for use in field clinics or for home use, samples can be assayed in less than an hour using just a strip of paper. If the Korean hospital had this assay, they would have immediately seen a signal saying MERS, and then they would have quarantined that person and everybody who had been in contact with him. That’s the vision. Hundreds of thousands of people every year die of influenza, and if they knew early that they had it, they could get oseltamivir, which is actually quite effective if you use it early enough. We want inexpensive and quick diagnostics for all diseases out there in the world. We think this technology has the capability of providing that, not just here but in the less developed world.

How did you find Sherlock Biosciences?

Heather: We had done a survey of diagnostics when we were doing our vaccine landscape in 2016. At that time, we felt there wasn't anything new in the space and that the science was moving along at a good pace, and there wasn’t a good funding opportunity for us. But when we saw the research coming out of Feng Zhang’s lab, we recognized it was a step change - that his invention was a new tool that would be much more sensitive than the PCR tools or antibodies that are currently used. We knew that it had a chance to be exquisitely sensitive. They had developed it enough to not only tell the difference between very closely related viral strains but also to detect it on a simple paper strip. So we got excited about that, but we figured it would take off on its own. A couple of years later, Chris and I were at a retreat for new scientific opportunities. We kept trying to get people interested in a viral diagnostic without much success. In the parking lot, we ran into David Walt, a Harvard professor who had previously co-founded several important companies. He told us he was part of a new company that could detect a single cancer cell in a person’s body. We asked if he thought they’d do a viral diagnostic, he went away and talked to his colleagues, and after a couple of weeks he got back to us.

What are the market forces on biotech companies like Sherlock Biosciences?

Chris: We do not have good insights into the forces shaping the biotech investment community. However, when we started interacting with Sherlock, they told us that investors seemed focused on opportunities other than viral diagnostics. Thus, we concluded that to meet our goals of making a universal viral diagnostic system available worldwide, a philanthropic investment would be necessary.

Heather: The challenge of making this economically viable is very hard. Of 14 Ebola diagnostics that were approved in the last epidemic, only two are available for the current outbreak. What happened to the other 12? They got funding from government agencies to do a proof of concept, but they didn’t go all the way through approval and manufacture because there was only a small market.

Chris: Because it’s impossible to know when the next Ebola epidemic will arise, companies are reluctant to devote resources to developing an expensive Ebola diagnostic. Most companies want to focus on things that they can sell in the developed world, in the United States and Europe, where they can sell for good value because the health care systems will pay. But we’re interested in diseases everywhere – in both the developed world and the developing world. That’s where philanthropy comes in.

Why did you make both a grant and an investment?

Chris: The decision to invest or award a grant varies from case to case. In some cases, we’re simply trying to support viability of a company that has promising technology that we want to see brought into application. We’re usually trying to help get them to the point where they’ve solved all of the problems so they can raise conventional investment. In the case of Sherlock, we wanted to both assist with financial viability of the company and also to make it possible for them to develop a type of product that may be less profitable than other applications of their technology but which we think has high value in the context of averting catastrophic risk from a pandemic. I’m very excited about Open Phil’s ability to make investments. I think there’s probably, in some ways, even more need for funding certain types of pre-commercial development than in the basic research side. In this case, we wanted to direct them toward our interest. Thus, from the beginning we went in with the idea that it would be a grant and an investment. The grant money has obligations, and a budget, and milestones.

Heather: The grant provides a partnership between Open Phil and the company to do what makes sense to develop the viral diagnostic. We’re putting this first on their agenda. The investment allows them to do what needs to be done for the financial future of the company. We have a joint research and development committee that meets often to discuss the technical limitations and what is possible so we can make sure the products that are developed meet our goals. A grant is more expensive for us up front, but it makes sense in the long run. We’re not trying to interfere with the business development and the business model for the company. In fact, part of the reason for us investing in addition to making the grant is that we want to support that normal, natural development, and think that the financial success of the company will enhance their ability to develop the diagnostic that we want to see.

Chris: Our goal is to contribute to the formation of a very successful diagnostic company using very powerful, almost universally applicable diagnostics. We want to kickstart them into the areas that we think have a lot of humanitarian value. Like the Gates Foundation’s investment in early vaccine development, we want to take a lot of the early cost out of it, give them momentum in that field, and then they should carry it forward into the future, into application. They’re enthusiastic about our goals. At the same time they have to make a profitable, sustainable enterprise. So far, we’re early days but we’re very aligned.

Heather: Another reason we invest in companies is that not all projects need help at the research stage, some need help at the translation stage. There’s a vacuum from the research stage to the company stage. Just getting something from an academic lab into some kind of industrial process is one thing. After that, there’s a second valley of death of getting that commercialized product into the market, getting people to actually buy whatever you’ve made. Those are big hurdles. We think the company will generate a financial return, but we’re willing to tolerate the risk that it won't.

Do you think Sherlock has a good chance to succeed?

Chris: Yes, we do. We think there will be incentives in the health care system for early diagnostics in the developed world but it’s hard to make a lot of money in diagnostics, particularly in the developing world, which is where we want to see this technology go. Open Phil wants us to take risks. If all our companies make money, probably we’re being too conservative. Some of our investments need to fail or else we’re not aiming high enough. We have a lot of confidence in the founders, as well as the management team – CEO Rahul Dhanda and chief technology officer Will Blake. The company’s nine founders are amazing people and are outstanding scientists who bring complementary skills and experience to the company: Feng Zhang, David Walt, Jim Collins, Pardis Sabeti, Rahul Dhanda, Omar Abudayyeh, Jonathan Gootenberg, Deborah Hung, and Todd Golub. David Walt, as an example, was a co-founder of Illumina and Quanterix who has been down the path of developing tools and is very experienced at going from discovery to implementation. Several of the founders are on the board of the company, so that gives us confidence that they’ll use their experience to help the company succeed. They have similar goals as we do. They want to see their technology developed and used in the world.

Where does this fit into our scientific research portfolio?

Chris: It definitely fits into our interest in infectious disease. We have a pretty big antivirals activity. We’ve got an increasingly big vaccine interest. Being able to diagnose an infectious disease is a companion to those. If you stand back and say, “how can we prepare for the next pandemic?” we see these three things: detect it early, and then try both a drug approach and a vaccine approach to stopping it. That’s how those three things fit together.

Heather: It also has the global health perspective. Making the best use of the therapeutics we have means prescribing things when you can, not prescribing things to the wrong diseases, and understanding the epidemiology. We’re entering a world of big data, and if you don’t have good data, it’s useless. Right now we don’t do very detailed diagnostics. That makes it very hard to track long-term outcomes. We’re starting to see that, actually, infectious disease might have a bigger role in chronic conditions than we thought before. Because we don’t track common infections, we can’t do the science to determine the long-term outcomes. So this could have both an immediate global health impact and a longer-term health impact in understanding chronic diseases that are related to infections. It’s a great basic science tool play as well. We have these new discoveries, and getting them into use as quickly as possible is a challenge. The system is really slow, it takes a really long time to get a discovery out. It’s sometimes decades to get something from a research lab to a hospital, let alone a consumer product.

Chris: We’re looking for really broad impact. Even though this was originally driven by our desire to prevent a catastrophic pandemic risk, if we can also get all kinds of additional public health value, that lowers the threshold to go into something. In the case of Sherlock, that was a factor for us, because we can see a lot of applications for it. The fact that it can run on paper strips means it can probably be used everywhere in the world.