Notes on tomorrow’s biotech: Insights from BIO-Europe Spring’s expert panel

BIO-Europe’s springtime partnering event made Milan the locus of an exciting gathering of the life sciences industry’s leaders, experts and innovation centres. ICON was well represented again among the more than 3,700 attendees, with Will Maier, Senior Vice President of ICON Biotech Drug Development Solutions, moderating a panel on ecosystem innovation: Designing tomorrow’s biotech: The interdependent ecosystem of therapeutic areas, research collaborators, and innovative funding models.

Joined by experts from across the industry, Will led a discussion on the interdependent ecosystem of biotechs, research collaborators and funding models, and how they drive transformation to advance healthcare.

The panellists covered topics ranging from the role of artificial intelligence (AI) in drug discovery (and fundraising) to evolving funding models and the challenges of financing new ventures, and what the future holds for biotech companies. Here we summarise some of the key points discussed in the panel with the following speakers:

Charles Sermon, General Counsel and Business Development at Mereo BioPharma
Tom Shepherd, CEO at Captor Therapeutics
Graham Mills, Principal at Abingworth LLP

AI in drug discovery

AI is as much a hot topic in biotech as in other clinical development sectors, yet its actual role in driving new company formation remains limited. While AI-powered drug discovery tools have generated excitement with accelerated possibility, only a small slice of private biotech financings in 2024 were dedicated to AI/ML-based discovery platforms—far behind oncology, cardiovascular, and inflammation-focused research. As Charles Sermon noted, “It’s a smaller piece of the pie.”

The panellists emphasised that while AI has potential, its effectiveness depends on the quality of training datasets. In many cases, traditional drug discovery methods still outperform AI-driven approaches. Tom Shepherd spoke from his extensive startup experience, reiterating the importance of the dataset. A well-trained dataset of a particular genotype and protein interactions can save significant time and money, though the data and AI training is a major investment of time and resources to begin with. In the end, his experience is that his teams often get to the results first. And if you’re looking for something new, AI won’t have the existing dataset to support that search anyway. For AI to be a true differentiator, biotech companies need a sustainable business model — whether through internal asset development or as a licensable platform technology.

Second-wave innovation: Moving from novelty to maturity

Biotech innovation can be understood in a two-phase cycle: an initial breakthrough followed by a period of optimisation and broader application. Tom Shepherd offered the example of targeted protein degradation with proteolysis-targeting chimeras (PROTACs). Viewed as an exciting new approach when it initially hit the headlines, exploring the application of the new molecules has made it clear that there is a significant difference between a discovery stage PROTAC and an optimised clinical candidate. Moving from a hit to a developed compound takes time and new skills, and through that process we are now reaping the benefits of this maturing technology and adapting it to be more effective across different indications.

This PROTAC innovation’s maturity cycle made way for discoveries that shifted from inhibitors to degraders to prevent toxicities. Captor is currently the only company that has a degrader of MCL1, which is a popular cancer target but also one where inhibitors have faced significant issues, which Captor’s degrader has avoided so far. Another form of degrader, molecular glues, were once considered less interesting then PROTACs due to the serendipitous nature of the initial discoveries but are now a focus of renewed interest as the technology matures. “It's a second wave of innovation,” said Tom. “Coming from an innovative combination of old school technologies, such as structural biology and crystallography, coupled with highly innovative in-silico predictive modelling which allows us to now screen for molecular glues.”

This pattern applies across the industry. GLP-1 receptor agonists, radiopharmaceuticals and gene therapies were introduced years ago but are now reaching a stage where infrastructure and clinical understanding enable them to be deployed at scale. As Graham Mills noted, “Maybe we shouldn’t be looking for what’s brand new, but rather engineering and maturing innovations to make them more widely applicable.”

Rare Diseases as an innovation hotspot

Rare diseases remain a compelling area for biotech investment, attracting more than double the financing of AI-focused companies. Panellists pointed to unmet medical needs as a driver of innovation in this space, highlighting ongoing developments in antibody and small-molecule therapies for conditions like brittle bone disease and alpha-1 antitrypsin deficiency.

The unmet medical need that exists for many rare disease patients compared to other therapeutic areas makes it an attractive space for biotech entrepreneurs looking to introduce first-in-class or highly novel treatments and it also remains an important category of interest to regulators.

Funding and market viability: Comparing biotech funding models

The conversation also explored the importance of innovative funding models in biotech. Tom Shepherd highlighted the unique ecosystem in Poland where, unlike many Western economies, Poland actively encourages pension fund investments in high-risk, innovative industries, as well as government backed non-dilutive funding in innovative industries. As a result, companies like Captor Therapeutics have successfully secured significant grant funding alongside private investment, allowing them to complete an IPO with the support of major pension funds. This support enabled progress from building their discovery platform to the first clinical trial within just seven years with all compounds developed internally without in-licensing.

Additionally, EU initiatives such as the EIC Accelerator program are providing grants and co-investment opportunities for select biotech organisations, reinforcing the importance of alternative funding routes beyond traditional venture capital firms which have their own funding flow challenges. However, while there are unique funding options available through government-based initiatives, tax credits, and other regional or localised sources, it can be difficult to identify and chase those. Graham Mills admits the process is “logistically and administratively incredibly complex.”

Getting certain in biotech fundraising

Ultimately, investors love certainty. Expanding on this, Graham Mills outlined from an investor perspective that the biggest fear in deploying capital in a company is that it’s insufficient to get to a milestone considered de-risked or value inflecting. Worse is not meeting a milestone that the market will consider de-risked and value inflecting, making it even more difficult for the company to raise more capital from subsequent investors. In finding certainty, it’s important to work with CROs who have done this before and can cost out your program.

“There is no magic solution. You just have to turn over a lot of stones when looking for sources of finance,” said Tom. And getting the right people on board who can turn over the right stones is the best way forward. Similarly, knowing your competition, but also knowing your comparator to use in studies, will clarify your path to success.

Looking ahead: The future of biotech innovation

As the biotech landscape evolves, companies must strike a balance between scientific breakthroughs, practical applications and financial sustainability. The future will likely be shaped by:

The maturation and scaling of past innovations rather than purely novel discoveries
The rise of rare disease therapeutics as a key innovation frontier
More diverse funding models, particularly outside traditional biotech hubs
A growing focus on reimbursement strategies to ensure market adoption

The next generation of biotech leaders must embrace a holistic approach that integrates scientific rigor, smart financing and a clear path to market adoption to shape tomorrow’s biotech industry.

To learn more about BIO Europe’s spring conference, explore their website here.

To learn more about how ICON can support biotech organisations to optimise their funding, development and operational strategies, connect with us.