2020 was an unusual year, for the first time, venture funding for microbiome companies substantially exceeded grant funding for microbiome research. In the year 2020, there were over 75K+ scientific publications, $1B+ grants awarded to microbiome research, ~150 ongoing clinical trials, and $1.5B+ venture funding. Does this mean that the microbiome market is evolving from being considered nascent to emerging/developing? To answer this question, let us dive deeper into the trends observed from the analytics of publications, grants, clinical trials, and venture funding.
Publication of scientific papers focused on microbiome research has been surging with over 75K publications in 2020 with stable growth of 24% in the past three years. Microbiome research has increased dramatically in recent years, driven by advances in enabling technologies such as next-generation sequencing (NGS), bioinformatics, gene editing, synthetic biology, metabolomics, and significant reductions in the cost of sequencing, gene synthesis.
This wealth of research has enabled utility in a diverse spectrum of fields spanning environmental, agriculture, medical (incl. therapeutics and diagnostics) to consumer markets such as food and personal care.
Environmental research is focused on harnessing the microbiome to predict ecosystem response such as engineering of microbiomes to modify structures of the microbiota and restoring ecological balance. While microbiome engineering and plant microbiome interactions are being researched to improve agricultural productivity.
Credit: Design Cells
In medicine, the majority of the publications are targeting GI diseases (gut dysbiosis, Inflammatory bowel disease), interactions between nutrition & gut microbiome, and infectious diseases (C. difficile and antibiotic resistance). This is followed by research to understand the implication of the microbiome in immune diseases such as allergies, type 1 diabetes, thyroid, rheumatoid arthritis, and lupus. Another top area is Oncology. There are numerous research studies that are investigating associations of microbiome and cancer, from oncogenesis and cancer progression to resistance or response to therapy. Microbiota-gut-brain (MGB) research is a fast-growing field. Microbiota is manipulated to reveal connections between intestinal microbiota and normal, pathological brain states. This could potentially lead to new avenues of treatment. Skin research has a smaller number of publications, but high two-year growth in a number of publications indicates that it is on the cusp of gaining traction. The influence of skin topography on microbial colonization and host-specific factors such as age are being studied.
Several pioneering studies from 2006 including landmark projects such as the Human microbiome project, the EU MetaHit projects, laid the foundation for this field, showing an upward trend to 2019. For the first time, there was a marked dip in funding amount in 2020. Funding dropped from ~$1.9B in 2019 to ~$1.1B in 2020, impacted by COVID. One could expect 2021 to catch up and reflect the 5-year upward trend from 2015- 2019 as several publicly traded life science companies such as Illumina have indicated that their core business can be expected to rebound in 2021.
Considerable grants are focused on basic biology studies characterizing microbial signaling in communities and functional studies within communities likely to catalyze our understanding of concepts such as quorum sensing and drive the field of microbiome engineering forward.
Environmental is garnering more attention with grants that are on tackling environmental pollution, climate change, and habitats.
On the medical side, grants on infectious disease and immune disorders have steadily been on the rise, focused on antibiotic resistance, the impact of the altered gut microbiome in areas such as type 1 diabetes, asthma, and lupus. Cancer and skin are smaller in terms of funds but have shown a big jump in funding compared to prior years. Studies are on tackling cancer progression to resistance and Atopic Dermatitis. Skin tends to be more challenging than the gut as the skin microbiome varies by skin site, hygiene level, and environmental conditions.
The number of ongoing clinical trials with a focus on the microbiome has risen substantially from 2015 –2019 to ~190 trials, with almost seven times the number of trials recorded in 2019 relative to 2015. Like in clinical trials in other spaces, COVID-19 has impacted the number of ongoing clinical trials in 2020. Thankfully, the majority of these can be expected to re-initiate in 2021. 2020 also saw three key clinical trial successes that have spurred the industry, namely that of Seres, Rebiotix, and Finch. All three companies target recurrent C. diff infections, Seres announced that it has met its primary endpoint in a phase 3 trial, while Rebiotix/Ferring announces positive preliminary phase 3 data, and Finch releases phase 2 data that showed statistically significant benefit. These breakthroughs are likely to pave the way for other indications. However, regulatory uncertainties regarding classification and frameworks for microbiome therapeutics continue to remain a barrier.
Key therapeutic approaches undertaken are:
Fecal Microbiota Transplantation (FMT): Introduces microbiota from a healthy donor by administering a preparation of fecal matter into a patient. The three clinical trials by Seres, Rebiotix, and Finch indicated above, are FMT candidates. Largely target infectious diseases and GI indications but limited by the need for donor stool, sample quality, and safety concerns.
Live Biotherapeutic Product (LBP): This is the most favored mechanism which is the introduction of hand-picked single strain or consortia of cultured microbes based on comparison of microbiome signature libraries of healthy and unhealthy individuals. Notable companies such as Seres, Vedanta, 4D, Evelo are targeting oncology, infectious disease, GI indications, metabolic, CNS, and immunology indications with this approach. Consistency, difficulty in culture microbes, and complex formulation process are the key challenges.
Bacteriophage & Viruses: Introduction of bacteriophages to eliminate pathogenic bacteria or as a delivery vehicle for gene editing systems. Companies such as Eligo, Locus, BiomX, and Spero have all adopted this approach to target oncology, infectious disease, GI indications, and immunology. Generation of resistance, stability, and gene transfer to other bacteria are concerns.
Small Molecules or Biologics: This is the newer way to modulate the microbiome by introducing biologically active molecules produced by the microbiome, rather than the microorganisms themselves. This approach to reprogram the microbiome with active molecules has been adopted by companies such as Kaleido, Enterome, Qualigen, and the Second genome to target oncology, infectious disease, dermatology, metabolic, and neurology. However, questions remain on whether the same level of coverage, the durability of the effect of LBPs can be seen.
50+% of trials have moved to phase II, given recent positive success stories, there is relative optimism around pipelines. Oncology is leading the trials spurred by studies from three years ago, that had shown that gut microbiome composition differences influence response to therapy in cancer patients. Bacterial strains that can boost immune responses are being studied to amplify the effects of checkpoint inhibitors. Others are investigating mitigating the side effects of chemotherapy. This followed by GI disorders, largely inflammatory bowel disease (loss of commensal bacteria that would keep the immune system at bay causes/increases inflammation) and infectious diseases such as C. diff using fecal transplant (FMT) and other interventions such as modulators. The FDA ruled that FMT may not be regulated as a drug except for recurrent C.diff infections. CNS-based trials on Gut-Brain Axis connections to treat conditions such as Autism, Parkinson’s disease is next.
Big pharma such as Takeda, Gilead, Janssen, AstraZeneca, Merck, and Bristol-Myers Squibb have started to take notice of the progress and have several collaboration/partnership investment deals with microbiome players including Debiopharm, Finch, Enterome, Second Genome, Vedanta, Seres, and 4D.
Like other avenues in the healthcare space, investor enthusiasm has been the bright spot that has powered the market through the pandemic. Funding reached historic levels of ~$2B in 2020, US investors dominate, followed by EU, in France, UK, and Ireland.
Agriculture companies, though not a media attention grabber, led the fund-raising race, raising $700M in 2020 with huge potential for smarter soil management and improving plant health. The food & beverage segment with nutrition and wellness solutions based on functional ingredients such as probiotics, prebiotics, and others to establish a healthy microbiome have received ample funding, e.g. Perfect Day, ByHeart.
Therapeutics companies have consistently received funding buoyed by clinical trial successes in 2020. Besides GI, infectious disease, companies focused on areas such as oncology, CNS, metabolic and skin are receiving funding (Vedanta, Kallyope, Enterome, & Azitra). Companies like Enterome are employing omics platforms to generate precision drugs. Building a consistent drug product from the various therapeutic approaches requires time and investments. CDMO’s like Arranta Bio are garnering attention as well. Leading investors on the therapeutic front are Seventure Partners, JLabs, Khosla Ventures, and Leaps (Bayer).
Last but not the least, diagnostics companies utilizing NGS, advanced machine learning such as Karius for clinical infectious testing and Vivante Health for consumer testing to guide personalized nutrition are leading the pack.
2020 has been a great year for the microbiome market despite a slowdown in grant funding and clinical trials. The pandemic helped renew investor attention on the microbiome along with continued progress from growing research and findings could imply a transformation of a market marching into the mainstream.