The state’s largest health care system is putting an increased focus on financing homegrown innovations, with Partners HealthCare putting another $65 million in a fund used to invest in Partners technologies while opening the door to outside investors.
The Partners Innovation Fund, created in 2007 with $35 million from Partners, was intended to progress Partners-developed innovations to the point where they can be commercialized.
“This is all about taking insights and ideas and discoveries of the faculty and even sometimes administrative staff at Brigham, Mass General Hospital, McLean, and getting them out so they can broadly help patients,” said Chris Coburn, vice president of innovation at Partners.
Now in its ninth year, Coburn said the concept has proven successful. Approximately $20 million has been invested so far in 25 companies. Three of those companies — Adheron, Annovation and CoStim — have been acquired for over $1 billion.
Partners has subsequently decided to expand the program, investing another $65 million into the fund — which includes some reinvestment of return on capital — and creating the Partners Impact Investing Fund, which will allow Boston-based investors to put money in to the fund.
Additional funding will allow Partners to issue larger investments to companies from the start, and offer subsequent investments as projects progress.
The fund is key, as Partners looks to diversify revenue coming in to the hospital from commercialized products. Coburn said Partners has also needed to find new ways to support research, as federal dollars are increasingly hard to secure.
“National Institutes of Health funding is up 6 percent this year, but we’re following a period of a decade where it was a lag or, in real terms, declining,” Coburn said. “These initiatives are certainly tied to that.”
Finding funding for innovations that are between the discovery and commercialization phase is also notoriously hard to get, as the innovation is too far along for federal research dollars, but not proven out enough to generate industry interest.
In research circles, this time frame is known as “the valley of death,” Coburn said. But the fund is helping researchers move past that stage.
“The presence of even a small amount of investment capital can draw in other support … as a means to show that there’s a priority around this potential product,” Coburn said.