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The North Atlantic Treaty Organization’s (NATO’s) recent interest in funding scientific innovation seems unlike its role as a military alliance. Backed by 24 NATO allies, the NATO Innovation Fund was set up for exactly this purpose two years ago in a bid to expedite science and technology. Now, it has invested in Portal Biotech, its first biotech to push drug development. What’s got NATO interested, and how will this change the future of healthcare?
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NATO Innovation Fund shells out $35 million for Portal Biotech
The news that the organization is spending $35 million on London-based Portal Biotech came about two weeks ago. Portal Biotech’s focus is on the field of proteomics, which is the study of proteins. Its nanopore technology has been employed to detect and analyze molecules that could potentially be of therapeutic value, including small molecules and peptides. Nanopores are biosensors that capture and characterize these protein molecules.
According to Portal Biotech, understanding the proteome, which is essentially the complex collection of proteins in our cells, is critical for unlocking the inner workings of biology and can help researchers gain a better understanding of human health and disease.
That’s mainly why the NATO Innovation Fund was keen on the venture, according to Ana Bernardo-Gancedo, senior associate at the NATO Innovation Fund.
“We invest in cutting-edge science and technology, supporting ambitious founders to secure the future for the alliance’s one billion citizens – whether by protecting infrastructure from subsea to space, enabling the climate and energy transition, or ensuring resilient supply chains across all sectors,” Bernardo-Gancedo told Labiotech.
The series A funding marks the first of its kind for the defense organization. And it’s mainly because it sees potential in Portal’s first-ever full-length protein sequencing platform.
What’s in it for NATO?
This platform has been designed to recognize potential deliberate biothreats, so it may not come as a surprise that NATO wants in.
“Portal’s single-molecule, full-length protein sequencing platform – the first of its kind – enables real-time data onsite anywhere, providing the capability of unprecedented proteomic insights for the detection and design of countermeasures against any naturally occurring disease and engineered biothreat,” said Bernardo-Gancedo.
While DNA and RNA sequencing have transformed our understanding of biology, Bernardo-Gancedo explained that proteins, which are central to virtually every biological process, “hold the key to insights that remain out of reach with current technologies.”
“Our support for Portal reflects this broader, more complex landscape, where biosecurity capabilities play a central role in national security and global defense infrastructure,” said Bernardo-Gancedo.
While tools like mass spectrometry are powerful in identifying proteins, when they shred proteins into fragments, they may miss critical protein modification patterns that change protein function. This can cost the healthcare industry a lot of money in failed drug trials and misdiagnoses, according to a press release announcing the investment by the NATO Innovation Fund.
So, the British biotech’s artificial intelligence (AI)-run platform is thought to beat these odds for errors seen in traditional protein identification methods.
“It’s for everything from measuring diseases to better pandemic prevention. You can take this out of large labs with long turnaround times and into the field,” said Andy Heron, CEO of Portal Biotech, in an interview with Reuters. “It allows you not just to detect what you did know was out there, but it allows you to detect what you didn’t know.”
Drug discovery, precision medicine, and biosecurity are all on the agenda with the sequencing platform.
“The NATO Innovation Fund invested in Portal Biotech because its protein sequencing platform has the potential to unlock the next frontier of biological data, critical for biosecurity and healthcare resilience. The pharmaceutical and biotech industries continue to face significant challenges in delivering the right therapies to the right patients, with billions lost annually in failed drug development,” said Bernardo-Gancedo.
Why are governments interested in funding AI?
While this is the first time the NATO-owned fund has put money into a biotech, it has, however, been a fan of AI in the past.
One of its first investments in AI was in London-based Fractile. The startup was founded three years ago and emerged out of stealth last year in a bid to challenge American company Nvidia, the most dominant player in computer chipmaking. Fractile claims that current hardware is “poorly suited” to using trained models to make new predictions, and it aims to tackle this.
An undisclosed amount was awarded to the chipmaker by the NATO Innovation Fund last year, from a funding pool of €1 billion ($1.16 billion). Along with the Fractile fundraise, it also poured money into space technology and robotics startups at the time.
“Today, defense and security are no longer confined to the traditional battlefield; it encompasses supply chain resilience, energy security, and vitally, preparedness against disease and biological threats. Being prepared involves being able to monitor and detect. Being able to respond efficiently requires a resilient supply chain to design countermeasures and scale up their production.”
Other AI programs it has invested in include the Portuguese company Faber and Netherlands-based OTB Ventures. The Faber funding from NATO was part of a €31 million ($36.08 million) seed financing, as the company steps into the fields of photonic chips, analog chip design, and synthetic biology.
As for OTB Ventures, it raised $185 million from NATO, as well as from the European Investment Fund (EIF), Isomer Capital, the Foundation for Polish Science, and TDJ Venture, among others. At the time, a partner at the NATO Innovation Fund stated that this investment is part of the organization’s plans to allocate money for “deep tech, defense, security, and resilience, with themes including energy, quantum computing, autonomy, climate, industrials, space, and biotechnology.”
The investment contributes to an industry that is projected to hit $244.22 billion this year. Moreover, the AI market size is poised to reach $1.01 trillion by 2031 at an annual growth rate of 26.6 per cent.
The NATO Innovation Fund: a defense strategy?
Meanwhile, the nature of geopolitical struggles and global conflict continues to evolve, Bernardo-Gancedo pointed out. The fund was created after the Russian invasion of Ukraine began in 2022 to build a “stronger startup ecosystem” to bolster technology in the NATO alliance regions. And while NATO is a defense organization, Bernardo-Gancedo expressed that defense goes beyond warzones.
“Today, defense and security are no longer confined to the traditional battlefield; it encompasses supply chain resilience, energy security, and vitally, preparedness against disease and biological threats,” said Bernardo-Gancedo. “Being prepared involves being able to monitor and detect. Being able to respond efficiently requires a resilient supply chain to design countermeasures and scale up their production.”
In recent times, governments have been upping their involvement in biothreat detection. For instance, the U.S. government spent big on developing tests to detect harmful bioengineered organisms last year. One of the test makers was Massachusetts-based biotech Ginkgo Bioworks. The company created a software that employs machine learning to identify whether the genome of certain organisms has been engineered.
This is a step up from traditional detection methods that relied on lengthy manual analysis. Ginkgo’s platform leans on algorithms that examine different genomes from a database to check whether the genetic material has been manipulated or not.
As part of this project, the U.S. government also poured money into Draper, a non-profit research and development (R&D) company, to detect biothreats. Both Draper and Gingko’s platform managed to correctly identify 70% of the test samples as being bioengineered, however, the rate of false negatives was a problem, especially in samples where there were subtler genetic differences, according to a report published by Wired.
Some of these more elusive genetic changes are done via base editing, a newer yet rapidly growing form of genome editing that can swap bases in the DNA. So, to construct platforms that cannot be tricked by base-edited genetic material, it is more expensive.
U.S. Department of Defense long been a funder of biopharma and R&D
Similarly, the U.S. Department of Defense (DOD) has ramped up funding towards bioindustrial and healthcare research. Late last year, it forked out around $60 million as part of its Distributed Bioindustrial Manufacturing Program (DBIMP). Nine awards were granted to biotechs, namely, U.S.- and Australia-based Cauldron Molecules, California-based Checkerspot, Amyris, and EVERY Company, New Jersey-based DSM Nutritional Products, Illinois-based The Fynder Group, and Liberation Labs in New York. These companies range from food tech and contract manufacturers in agrotech to synthetic biology experts.
“The introduction of new investment and funding strategies aligned to the National Defense Industrial Strategy offers the DoD rapid access to commercial solutions for defense requirements,” Laura Taylor-Kale, assistant secretary of Defense for Industrial Base Policy in the Office of the Under Secretary of Defense for Acquisition and Sustainment, had said in a press release announcing the DoD’s hand in the funding in November. “The Defense Industrial Base Consortium (DIBC) Other Transaction Agreement (OTA) provides DoD with new paths for innovation through industry and ensures continued U.S. competitiveness.”
And in therapeutics, the DoD has shelled out money over the years too. It handed over $3.13 million to the Australian biotech ENA Respiratory to develop a new antiviral medicine last year. The company’s CEO, Christophe Demaison, explained that this would fuel the development of INNA-051, an intranasal small molecule TLR2/6 agonist that is designed to boost the body’s natural antiviral defense system.
The DoD seems to be a seasoned investor in the sector, having teamed up with the Department of Health and Human Services (HHS) to bolster U.S. biomanufacturing and improve drug production infrastructure. The $1 billion collaboration vowed to build the sector over five years, back in 2022.
Beyond Portal Biotech: what lies ahead for NATO Innovation Fund?
For NATO, however, the Portal Biotech funding is the first in an industry it seeks to be a part of.
“We will continue to scope and invest in the emerging technologies underpinning the most critical capabilities in healthcare preparedness and supply chain resilience for the Alliance,” said Bernardo-Gancedo.
With the debut of the Portal investment, the more familiar AI sector – for NATO – intersects with biotech, which is becoming an industry of its own.
Bernardo-Gancedo said: “Portal’s technology enables data insights that are simply not available today, exponentially increasing our understanding of disease targets and their interactions with drug candidates. We believe this level of insight will be pivotal in delivering the right drugs to the right patients, and Portal’s team is uniquely positioned to make it happen.”
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