Our Venture Philanthropy Model

In 1989, a team of scientists supported by the Foundation discovered the cystic fibrosis gene and opened the door to our understanding of the disease at its most basic level.

People with CF and their loved ones were hopeful that this discovery would quickly lead to new drugs to fight this rare and fatal disease. But the gene discovery alone wasn’t enough to spur innovation. The challenge of taking scientific knowledge from the laboratory and applying it to develop effective treatments for CF was a larger obstacle than anyone had anticipated.

By the late 1990s, two important CF drugs that helped battle some of the devastating symptoms of CF had been approved with the Foundation’s support. However, there were no breakthrough treatments in the pipeline to address the underlying cause of the disease.
 
By 1998, the median predicted age of survival for a person with CF was 32 years, and people with CF and their loved ones were desperate for faster progress. With a growing sense of impatience, Robert J. Beall, PhD, then president and CEO of the Foundation, landed on an idea called venture philanthropy to break through the pharmaceutical industry’s reluctance to get involved in cystic fibrosis research. 

Venture philanthropy, where a nonprofit organization provides funding to a for-profit company to de-risk an investment, was an entirely new approach to funding research. This was a monumental shift because most disease nonprofits had traditionally focused their fundraising dollars on academic and medical research. It was considered an unconventional strategy and a major gamble with no guarantees. 

With the support of our Board of Trustees, Dr. Beall began working the phones to find a willing partner. Only two drug companies returned his calls. In 2000, the Foundation made its first large investment: $40 million with Aurora Biosciences (now Vertex Pharmaceuticals) to discover compounds that might correct the core genetic defect in people with CF. It was unknown that such a compound existed. We chose to work with Aurora because the company specialized in high through-put screening, a unique technology that used robots to test the therapeutic properties of thousands of chemical compounds a day in cells in laboratory dishes. 

It became clear in 2012 that our venture strategy was a success. The U.S. Food and Drug Administration (FDA) approved the first drug to address the underlying cause of cystic fibrosis, ivacaftor (Kalydeco^®).  

In the years that followed, our venture philanthropy model later supported the development of additional therapies, lumacaftor/ivacaftor (Orkambi^®) and tezacaftor/ivacaftor (Symdeko^®), that benefited more people with CF, including those with the most common mutations.

In 2014, the Foundation sold royalty rights for CF treatments developed by Vertex for $3.3 billion to Royalty Pharma, bringing resources to the fight against CF never thought possible. And in 2020, we successfully completed a sale of our remaining stake in royalties related to Vertex’s therapies for an upfront payment of $575 million and a potential future payment of $75 million, bringing additional resources to the fight against CF.

The funds are being used to accelerate the development of lifesaving new therapies, to provide high-quality, specialized care and programs that support people with CF and their families, and to pursue daring new opportunities to one day find a lifelong cure.

In 2019, the approval of elexacaftor/tezacaftor/ivacaftor (Trikafta^®), a highly effective modulator therapy treating the underlying cause of disease for more people than ever before, marked a monumental shift in the development of treatments for CF.

CFTR modulator therapies have changed the lives of many people with CF, but not everyone can benefit. Our goal is a cure for 100% of people living with CF and we refuse to leave anyone behind.

Seeing these biggest challenges ahead in finding a cure for cystic fibrosis, in 2019 we announced our Path to a Cure – an ambitious, $500 million research agenda to deliver treatments for the underlying cause of disease and a cure for every person with CF. Path to a Cure is a challenge to potential collaborators to submit proposals that will accelerate the pace of progress in CF drug discovery and development.

In addition to funding several companies at their early stages to pursue treatments for CF with Path to a Cure, we took a bold step in our collaboration with Longwood Fund, a biotech-focused venture capital firm, to establish a CF-focused incubator to build companies from the ground up that prioritize the needs of people with CF.

The Foundation continues to evolve our venture philanthropy approach to take advantage of emerging science with the potential to benefit individuals with CF who are most in need of new therapeutic options. Today, we invest more than $225 million per year in CF research and care.

We pioneered venture philanthropy and led the movement of voluntary health organizations funding drug development with for-profit companies. 

Our model has been nationally recognized and praised by leaders in medicine, business, and health care advocacy.

“The unique and mutually beneficial partnership that led to the approval of Kalydeco serves as a great model for what companies and patient groups can achieve if they collaborate on drug development.”

- Margaret A. Hamburg, MD, former FDA Commissioner 

One of the highest honors came from former President Barack Obama. During his 2015 State of the Union address, he cited the story of cystic fibrosis as an example of how nonprofits, the pharmaceutical industry, researchers, patients, and their families can work together to produce more targeted and effective treatments for diseases.

The approach has been widely emulated by many other rare disease nonprofits, and a National Institutes of Health initiative has adopted CF Foundation strategies to advance drug development for rare and neglected diseases.
 
With the steadfast support of the CF community and unprecedented momentum in research powered by our venture philanthropy model, we have more hope for the future than ever before.