[Edaily Reporter NA EUN-KYUNG ] Even as it has become increasingly difficult for biotech startups to secure funding, there are venture capital (VC) firms that remain active in biotech investments. One such firm is Pathway Partners (hereinafter “Pathway”), which has achieved successful exits through investments in #LivsMed Inc. and #PROTEINA CO., LTD. Pathway identifies promising biotech startups by leveraging its founding team—comprising former chief financial officers (CFOs) of biotech companies—and investment professionals with extensive experience in technology evaluation, new drug development, and finance.

CEO Lee Sang-jin, who founded Pathway, previously served as CFO at Olix Pharmaceuticals, Inc. and VUNO, Inc. Moon Cho-hye, an executive vice president and investment analyst at Pathway, holds a Ph.D. in Bioengineering from Seoul National University. She is a bio sector expert who has served as a research professor at Korea University, head of the IPO evaluation team at Seoul Information Service, and team leader at FINO INC. and the Industrial Technology Research Center of INDUSTRIALBANKOFKOREA. Thanks to this core team’s comprehensive experience in biotech company management, research and development, technology evaluation, and investment due diligence, more than 60% of Pathway’s portfolio consists of biotech companies.

The firm’s exit track record is also solid. In the cases of LivsMed Inc., a laparoscopic surgical instrument company, and PROTEINA CO., LTD., a protein analysis technology firm—both of which saw their investments exited last year—the internal rate of return (IRR) alone reached 77.25% and 75.38%, respectively.

The companies that Pathway has recently focused on are the diagnostics firm Bertis and the anti-cancer vaccine developer Aston Science. In a recent interview with Pharm E-Daily, Executive Director Moon explained the rationale behind continuing investments even amid a slowdown in biotech investment, stating, “I see no reason to reduce investment as long as the technology is sound and the market for that technology is growing.” In fact, Executive Director Moon decided to invest after noting the potential to expand Bertis’s proteomics analysis technology into new drug development and Aston Science’s potential to enter the cancer vaccine market.

Beyond Diagnostics to New Drug Development

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Bertis’ Next Client

What caught Bertis’ attention was the scope of application for its proteomics analysis technology. The company believes that by leveraging the data and analytical capabilities accumulated through the sale of diagnostic products for new drug development services, it can expand its customer base and revenue streams. In other words, the technology previously used to detect diseases can also be applied to the discovery and development of drug candidates by pharmaceutical companies.

Executive Director Moon explained, “It was crucial to determine how Bertis could grow the business beyond diagnostics.” Since proteins play a role in the onset and treatment of diseases, the company recognized that the applications of its analytical technology are not limited to diagnostics. In essence, Bertis assessed whether its existing technology could meet the needs of new clients, such as pharmaceutical companies.

In 2022, Bertis launched its proteomics analysis service “PASS,” expanding its business from diagnostics to analytical services for pharmaceutical companies and research institutions. The service uses mass spectrometry to measure the types and quantities of proteins in a sample and interprets the results using bioinformatics and artificial intelligence (AI). A key feature is its ability to provide support tailored to clients’ research objectives—ranging from the discovery and validation of biomarkers indicating disease or drug responses to the analyses required for new drug development and production.

Recently, the company has also expanded into the field of directly identifying new drug targets. “SURF,” a surface proteomics-based drug target discovery platform, analyzes proteins on the cell surface and their neighboring proteins to identify candidate targets for therapeutics. The company plans to validate the expression characteristics and functions of candidate targets and bundle them with substances that bind to those targets, providing them in a format suitable for use in the development of antibody-drug conjugates (ADCs) or bispecific antibodies. This strategy aims to leverage the capabilities built through its analytical services to facilitate joint research and technology transfers with pharmaceutical companies.

He emphasized the significance of Bertis having demonstrated such business scalability in recent years. His interpretation is that, in addition to having products and revenue, it was crucial to explain what follow-up business opportunities could be created using existing technology. He assessed that expanding new drug development services based on the diagnostics business could broaden the company’s growth trajectory.

Executive Director Moon emphasized, “We look at how a company can expand its existing technologies in response to market changes,” adding, “Such companies have growth potential.”

Aston: Fully Prepared to Enter the Cancer Vaccine Market

The reason Pathway participated as a new investor in Aston Science’s 39.6 billion won Series D round was that it recognized a shift in treatment strategies surrounding cancer vaccines. After reviewing Moderna’s clinical results, Executive Director Moon concluded that a new market could open up—one focused on enhancing efficacy through combination therapy with existing treatments or reducing recurrence after treatment. He expected that if a leading company demonstrated this potential, opportunities would also arise for subsequent developers.

“When the wave created by the market’s first mover comes, it’s not just one person who rides that wave,” he explained. “I looked to see if we could join the leading group, even if we weren’t the frontrunner.” He subsequently met with Aston Science and reviewed the data under a non-disclosure agreement to assess the investment potential.

Of particular importance was the clinical evidence demonstrating the potential to suppress recurrence. They also evaluated the limitation of the small patient sample size. Executive Director Moon said, “Although the sample size was limited, we reviewed the data and concluded that the results indicated potential.” The key question was whether the evidence they had gathered would be sufficient to convince pharmaceutical companies to proceed with further development.

The criterion underlying both companies’ investment decisions is the “customer.” Bertis had in mind pharmaceutical companies that would use its proteomics analysis services, while Aston Science focused on pharmaceutical companies that would adopt its technology based on clinical data.

This perspective was shaped by Executive Director Moon’s firsthand experience in new drug development at a biotech startup. While preparing for U.S. clinical trials and technology transfer, he gained a firsthand understanding of the data required by external parties. This is why, during the investment review process, Executive Director Moon examines whether preclinical trials align with future clinical trials, whether there is a basis for comparison with competing technologies, and whether mass production is feasible.

Executive Director Moon stated, “To succeed in technology transfer, you must ultimately consider who you will sell the technology to and what that company needs.” He added, “If Korean biotech startups design their preclinical testing and clinical strategies based on this, it will help increase the likelihood of a successful technology transfer.”