Financial Incentives for Biotechnology Investors to Improve Biosecurity

In 2019, NTI and its Biosecurity Innovation and Risk Reduction Initiative partners will launch five working groups to engage new stakeholders, identify urgent actions, and catalyze the adoption of new approaches to reduce biological risks associated with advances in technology. This page describes the working group on Financial Incentives for Biotechnology Investors to Improve Biosecurity, informed by a paper commissioned by NTI ahead of the October 2018 Initiative launch. For more information about the other working groups, visit the Biosecurity Innovation and Risk Reduction Initiative project page.

Challenge: Founders and investors today have much to consider when starting or investing in biotechnology companies. Although investments in cybersecurity are common, it is unusual for technology investors to focus their resources on identifying and mitigating emerging biological risks.

Biotechnology innovation now affects nearly every sector of the global economy. With investment in biotechnology companies at an all-time high, new companies are launching on an almost weekly basis. Unfortunately, biosecurity is not typically top of mind for investors, and many scientists and engineers are more concerned about biosafety than biosecurity as that is the focus of most academic training. If biosecurity is addressed, it is typically around the use of pathogens and often in a biomedical research context rather than related to what a nefarious actor could do with scientific advances.

Proposed Solution: Investors should prioritize and fund sustained investments in biosecurity throughout the creation of new companies and commercial products.

Investors commonly impose funding prerequisites on businesses they support, and
biosecurity should be on the list for new biotechnology companies.

The ways in which an investor should implement a biosecurity strategy would be specific to a given company, and companies will require some flexibility to develop and implement customized biosecurity plans that align with investors’ goals of creating a thriving company.

The costs associated with assessing and addressing biosecurity needs for a company should (roughly) scale with the financial growth of a company. Dedicating a percentage of investment funding early on will help ensure that initial investments in biosecurity development are maintained as a company grows. The right percentage is difficult to determine, however, as a biosecurity investment cost could range from $2,500 to $25,000 at early-stage investment, and upwards of $500,000 during a growth phase.

In 2017, more than $1 billion was invested in synthetic biology companies; 2018 doubled that amount. Roughly $480 million went into 38 early-stage deals in 2017.  This would represent almost $5 million in biosecurity investment and dozens of companies considering the biosecurity implications of their businesses if investors were to have prioritized biosecurity with one percent of their investments. Moreover, if corporate leaders inculcate a biosecurity mindset into their companies early on, this will position them well to consider how best to carry that forward as they grow and develop.^[1]

Next Steps: NTI will partner with Initiative members to encourage early-stage biotechnology investors to consider and fund sustained investments in biosecurity throughout the creation of new companies and commercial products. The working group will include technology leaders and investors who seed new biotechnology concepts through venture capital or private equity.

[1] “Synthetic Biology Annual Investment Report,” Synbiobeta & Silicon Valley Bank (9/20/2018)