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LONDON (Reuters) - A new 50 million pounds ($80 million) fund, backed by Britain's leading cancer charity and European money, has been created to help bridge the funding gap between cancer drug discovery and early clinical development.
The CRT Pioneer Fund is the third novel drug research funding vehicle unveiled in the last 10 days, following a 200 million pounds investment fund from Wellcome Trust, and a $200 million tie-up between GlaxoSmithKline, Johnson & Johnson and Index Ventures.
All three aim to address the so-called "valley of death" funding crisis facing early-stage drug development, which is caused by investors' dwindling appetite for high-risk projects like drug research in the wake of the financial crisis.
The result has been far less funding available for small biotechnology companies, who previously took on many projects from academia and then licensed them on to Big Pharma.
"This is perhaps the crucial weakness in our ecosystem for innovation and research," David Willetts, Britain's science minister, told reporters. "There is a danger that the valley of death gets wider rather than narrower and that's why initiatives like these are so important."
The latest fund, announced on Thursday, is being launched with an initial 25 million pounds. This will be increased to 50 million pounds in two years, if all goes well.
Cancer Research Technology (CRT), the commercial arm of Cancer Research UK, and the European Investment Fund, which is majority-owned by the European Investment Bank, will make equal contributions to the new fund.
Keith Blundy, the chief executive of CRT, said the fund would focus on individual drug projects, rather than funding whole companies, and would aim to take promising new cancer drug candidates through to the start of mid-stage Phase II clinical trials before licensing them on to commercial partners.
The approach mirrors the "asset-centric" system being adopted by Index Ventures in its alliance with GSK and J&J.
At least two-thirds of the CRT Pioneer Fund will be used to develop discoveries made by Cancer Research UK scientists, with the rest available to back other projects.
Editing by Mike Nesbit