In recent years, vaccines have received a lot of attention, but vaccines are not versatile; they are developed specifically for each infectious disease, such as the influenza vaccine for influenza and the COVID-19 vaccines for COVID-19. This is due to the specificity of the immune system. The body has the ability to read differences in foreign antigens and prepare corresponding T-cell receptors (TCR) and B-cell receptors (BCR). Repertoire Genesis, a bio-venture company, provides a platform for comprehensive analysis of these receptors. Through its original analysis, Repertoire supports basic research, clinical research, and clinical trials conducted by universities and other research institutions as well as pharmaceutical companies. With the mission of "Curing the Incurable" the company is taking on the challenge of addressing unmet medical needs. However, because it is an area that requires a high level of expertise to be understood by those who do not specialize in the same area, the company has had difficulty in attracting funding from investors. UTEC was quick to notice the potential of Repertoire's technology. We spoke with the company's founder, Ryuji Suzuki, about the impact of Repertoire analysis on society.
05
STORY
Repertoire
Genesis
Curing the Incurable
Chairman and CEO
Ryuji Suzuki
PROLOGUE
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SECTION01 :From Innate to Specific Immunity
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From Innate to Specific Immunity
It was in the 1980s when Dr. Suzuki, a researcher of the immune system at Tohoku University, focused his attention on specificity of immunity. After more than a quarter of a century of pursuing repertoire analysis, we asked Dr. Suzuki to tell us how he launched his bio-venture in 2014.
- Suzuki:
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I was involved in research on the immune system at Tohoku University for 20 years starting in 1979. Cells can theoretically have as many as 10-18 receptors on each lymphocyte that can respond to antigens. This is called the specificity of immunity. At that time, however, the whole picture of specific immunity was not yet known, and the study of the immune system was dominated by innate immunity. Innate immunity acts as the primary defense. However, I felt that specific immunity was still important for curing diseases.
Over time, more and more things became clear about specific immunity, and in 1983 I moved to a pharmaceutical company and began to focus my research on specific immunity. At that time, there was still no genetic information on how many variations there were in the TCR and BCR - they were called repertoire - and we could only pick them up one by one. It was in 1994 that our group developed the technology to comprehensively analyze the repertoire. It was very innovative, and some excellent doctors who were studying bone marrow transplantation and tumor immunity were very eager to use the technology, but the pharmaceutical company which I worked for, did not fully understand the technology. So, I had to move to Sagamihara Hospital of the Independent Administrative Institution National Hospital Organization and continued my research freely.
I was happy to be able to do whatever I wanted, but national hospitals have a mandatory retirement age of 60. When I reached retirement age, the research that various research institutions had asked me to do would cease. Even if I wanted to leave the work to younger researchers, they were not ready to stand on their own and obtain grant for their research. The only way to continue the research that society expected of us was to start our own business. That is why I launched Repertoire Genesis in 2014.
SECTION02 : UTEC was the only one who understood technology.
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UTEC was the only one
who understood technology.
When Dr. Suzuki launched his company, he struggled to raise funds. However, the technology was so advanced and specialized that it was difficult to explain to VCs. Then he met a venture capitalist at UTEC, and things began to change.
- Suzuki:
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At first, I went around to various VCs in Osaka. But everywhere I went, the response was, "What is Repertoire?” Of course, I explained in detail the importance of repertoire analysis and introduced some papers. But they still didn't seem to get the message, and in the end, they were only interested in "What kind of drugs can you make?”
It is more appealing to investors to say, "We are going to develop such and such a small molecule compound to cure this disease. However, repertoire analysis is a method for understanding the most important part of the body's mechanisms, and it can pinpoint health conditions, pathological states, and even etiologies. It is unfortunate that its versatility and potential are not well understood.
When I was in trouble, an acquaintance introduced me to UTEC. In the first place, we had low expectations for VCs, and since we were aware that UTEC was a VC that mainly work with startups spun off from the University of Tokyo, we had the impression that it would be difficult for us in Osaka to get in. When I went to Tokyo to visit UTEC, I was still a bit skeptical.
However, it was the right decision to go. The venture capitalist who corresponded with me at that time was Atsushi Usami, who is now a Partner and Board Director at UTEC. He was very young, having just joined UTEC, but he was very studious and was the only one who understood my explanation and showed enthusiasm. If it were other venture capitalist, it probably took longer time to understand our technology at first, and there must have been a lot of internal debate. However, Mr. Usami went through the approval process at UTEC’s investment committee with great enthusiasm, and we were able to raise 200M JPY investment from UTEC, and in 2014, we successfully established the company.
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PROBLEM
The research team at Repertoire Genesis was able to continue research and development after fundraising. However, even for an R&D venture, it is difficult to continue business if there is no prospect of generating revenue. What action did Dr. Suzuki take in the face of a complete lack of sales?
SECTION03 : Prepared for dismissal? Pursuing the best technology as far as possible
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Prepared for dismissal?
Pursuing the best technology as far as possible
The business of Repertoire Genesis is to provide universities and other research institutions and pharmaceutical companies with fundamental technologies for basic research on the immune system and for the development of therapeutic and diagnostic drugs that act on the immune system. In its early years, the company focused on further improving the quality of repertoire analysis and promoting its practical use.
- Suzuki:
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Of the 200M JPY we raised, 100M JPY was used to build the laboratory. When we were about to continue R&D with the remaining 100M JPY, Mr. Usami came to us with an apologetic look on his face and asked us if we could make some sales as a Proof of Concept for the business model, even if it was only 5M JPY in the first year. This was very difficult. I went around to my former research colleagues and to pharmaceutical companies with which I had connections, and managed to get orders for several million JPY for repertoire analysis, and managed to keep up with Mr. Usami’s expectation.
The problem occurred at the Series B round of financing. We need to raise funds to continue our business, but our sales remain low. Even if we asked for additional investment, we could not go through with just the same business as before. So, we decided to launch an analysis service that also combines the antigen side technology we had been researching at Sagamihara Hospital. They were convinced by this plan, and we were able to raise a total of 500M JPY in funding with UTEC being the lead investor.
We had some fights with UTEC. Our ultimate goal is treatment, not diagnosis. If we are aiming for treatment, we want to do it with the best technology by forming a team with superior intellectual property and capabilities. When we had the opportunity to assemble such a team and asked them to invest in us, they once expressed their dissent, saying that there are steps that need to be taken when making R&D investments, considering financial planning and cash flow. Frankly speaking, I was prepared to be dismissed from my position when I was opposed. After all, I was not good at conforming to shareholders. I think it was UTEC's depth of heart that later supported our drug discovery platform business, which aimed to provide cures.
FINAL SECTION : VC selection is all about "people".
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FINAL SECTION VC selection is all about "people".
FINAL SECTION
VC selection is all about "people".
In May 2022, Repertoire Genesis became a group company of Eurofins, a global leader in analytical and laboratory services. By utilizing Eurofins' diverse analytical menu and connections with global pharmaceutical manufacturers, Repertoire Genesis intends to realize its mission of “Curing the Incurable”.
- Suzuki:
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Right now, Repertoire Genesis is working on building a genome-edited TCR-T therapy. This is the world's first try. If we succeed, we can create a new path for cell therapy based on this technology. It is not easy, but it is a venture to do what no one has done before. We do not intend to stop challenging ourselves in the future.
UTEC has not just provided the funds, but has helped us in many ways in the corporate area. I may know a thing or two about research, but I have absolutely no knowledge of administrative matters. If UTEC had not brought in potential candidates who understood that and helped us in the interview process, we would not have been a viable company today.
I am especially grateful to Mr. Usami. I think he must have been through hard time, torn between the responsibility he had to fulfill as VC and we who pursued our dreams. I remember Mr. Usami, who was almost crushed by the pain of making daily sales and achievements, but when he saw how our cutting-edge technology was actually helping people with illnesses in real clinical settings, he decided to go back to the starting point on the banks of the Mukogawa River and shed tears. I vowed to him that I would not let him down.
VCs are people, after all. Entrepreneurs should choose a VC with a trustworthy capitalist, and at UTEC we ca find people like Mr. Usami who can put himself in entrepreneurs’ shoes. I think it is safe to say that UTEC is a trustworthy VC based on that respect.