Muscular Dystrophy Association Launches New Venture Philanthropy
TUCSON, Ariz., April 1, 2009 — The Muscular Dystrophy Association (MDA) today announced the launch of a new initiative, MDA Venture Philanthropy (MVP), which will be a wholly owned subsidiary of MDA. A 501(c)(3) nonprofit organization, MVP will break with traditional philanthropy models for funding research by applying the tools of venture capital firms to fast track the development of new therapies and cures for muscular dystrophy and related diseases.
In the newly emerging realm of venture philanthropy, MVP will be uniquely positioned because of its ability to build upon MDA's highly successful translational research program that efficiently integrates the various steps in research and clinical trials, while leveraging MDA's significant clinical resources.
MDA will provide initial seed money of $10 million for MVP's operating capital. Its investments will specifically focus on companies conducting commercially promising research in four disease categories: Duchenne muscular dystrophy (DMD); amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease); spinal muscular atrophy (SMA); and Friedreich's ataxia, myotonic dystrophy, and limb-girdle muscular dystrophy.
MVP will approach the raising, investment and management of funds much like a venture capital firm, utilizing venture capital principles and tools to develop strategies, evaluate each investment opportunity, make quick and soundly based decisions and comprehensively report results against milestones to investors.
MVP will seek donations from a new body of philanthropists -- individuals with both a familial connection to muscle diseases and the financial ability to make a significant contribution ($250,000 or more). MVP will then use the donations to place initial targeted investments into biotechnology companies and academic institutions with highly promising therapies for these diseases. These investments by MVP will not only provide needed funding but will also serve to attract follow-on investments from other sources such as pharmaceutical and biotech companies.
"We're excited about MVP because it will help us to overcome the critical funding gap that can occur in research on promising new drugs and therapies," said MDA President & CEO Gerald C. Weinberg.
MVP's venture capital model addresses the well-known drug development challenge in which promising work on ideas for new drug therapies, development of which can take many years and cost more than $1 billion to bring to fruition, can run out of money and be abandoned. The funding problem is worsened when the drug or the therapy is being developed for a disease that affects a relatively small patient population base, with a relatively small return on investment. MVP overcomes these problems by joining the entrepreneurial spirit of donors with best business practices to drive a specific therapeutic development.
"As a venture philanthropy operating in a very distressed economy and a competitive philanthropy landscape, MVP will hold the companies we invest our donations in fully accountable through milestone-driven contracts," MVP Executive Director Sharon Hesterlee, Ph.D. said. "But we will also hold ourselves accountable to our donors through a structure that enables them to have an advisory role in MVP's investment evaluation process, and to see firsthand that MVP is meeting its goals as an organization."
About MDA: MDA is a voluntary health agency supporting programs of worldwide research, comprehensive services, advocacy, and professional and public health education for muscular dystrophy and related diseases. MDA is the largest nongovernmental sponsor of neuromuscular disease research. The Association's programs are funded almost entirely by individual private contributors. Visit www.mda.org for more information.