By Cliff Gibbons, CanceRx
Every day, promising life-saving cancer treatments stall in early-stage clinical development, where funding is scarce, timelines are long, and success rates are low.
After a research institution, NIH/NCI comprehensive cancer center, or biotech company discovers a new cancer treatment, the drug must then go through rigorous, FDA-approved human testing — Phase I (is it safe), Phase II (is it effective), and Phase III (is it better).
This critically important human testing takes eight to ten years and costs anywhere from $400 million to $1.5 billion per new cancer treatment. If the new drug passes all these hurdles, clinical test dossiers and manufacturing processes are subject to FDA review. This step may take two to three years and cost $30 to $50 million. Similar challenges must be overcome to get new treatments to patients in other countries as well.
After all this, only about 5% of new drugs pass these three phases of human clinical testing and clear FDA regulatory approvals.
Moreover, the main funding sources for early stage clinical testing in humans are private equity and venture capital. Decision makers in this industry are profit-oriented and calculating when it comes to taking risks with capital.
Standard Model of Cancer Research Financing
Basic Research
(~37% of overall cost)
Public investment and Philanthropy
Clinical Research
(~30% of overall cost)
Phase I-III Clinical Trials
Private investment
FDA Approval
(~33% of overall cost)
Private investment
Risk and market assessment limit funds biopharma invests in clinical development for human cancer treatments. Shorter CEO tenure, regulatory and market pressures, and shareholder interests have shifted corporate priorities to focus on risk reduction and operational efficiency.
Big pharma has preferred to acquire mid-stage clinical prospects for their commercialization pipelines after the prospective treatments clear a gauntlet of early testing.
The combination of risk and financing factors creates a bottleneck in funding research that will get new cancer drugs to patients.
Aligning Financing With Clinical Development
The CanceRx financing model was developed by Dr. Andrew Lo and the Nobel Laureate faculty at Massachusetts Institute of Technology’s Laboratory for Financial Engineering. This approach uses bonds to fund long-term, uninterrupted support for clinical development and human trials
- By aligning long-term financing with the progress of clinical research, CanceRx drives an innovative investment model tailored to the unique demands of bringing effective pre-clinical compounds to commercialization.
- The result? A streamlined, capital-efficient engine for clinical progress. One that prioritizes synchronized investing, long-term growth, and a powerful mission: bringing life-saving treatments to patients — and value to investors.
CanceRx is a next-generation cancer therapeutics accelerator designed to unlock high-potential therapies at the earliest, most undervalued stages and demonstrate which are commercially viable, then market the rights to big pharma. This model enables us to spread risk, reallocate resources dynamically, and exit with scale.
What Makes CanceRx Different
Unlike traditional private equity or venture capital, CanceRx is a single financial entity — not a fund. We strategically deploy capital across a diversified, actively managed portfolio of therapeutic and diagnostic assets, from pre-clinical research to market readiness.
• We don’t wait for deals to come to us. We source, build, and launch cancer start-ups.
• We fund diagnostics and therapeutics — not just big-name drugs.
• We issue long-term debt, enabling bold investments beyond typical fund timelines.
• Our team is deeply scientific. Portfolio managers engage at every step — from lab bench to regulatory submission.
Join us in closing the gap and building the future of oncology.