Mass. Venture Capitalists Invest In Alzheimer's Research

By Sean Corcoran

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Nov. 8, 2010

For more than five million patients and their estimated ten million caregivers, Alzheimer's disease is a scourge, a memory-stealing, brain-clogging affliction that costs the United States more than $170 billion a year, though its true impact on the lives of American families is incalculable.

In the first installment of our 2-part series, "Venture Philanthropy: An Investor's Approach to Curing Alzheimer's," reporter Sean Corcoran introduces us to a small group of local business leaders who are using their proven investment techniques — and their personal fortunes — to assemble what they believe are the world's most promising researchers to slow, stop or reverse the disease.


Dr. Jaehong Suh examines a film showing defective proteins which hold clues to the origin of Alzheimer's Disease.

Dr. Jaehong Suh examines a film showing defective proteins which hold clues to the origin of Alzheimer's Disease. (Jess Bidgood/WGBH)

WOODS HOLE — When Henry McCance's wife, Allison, was diagnosed with Alzheimer's Disease about 10 years ago, he set out to learn as much as he could about the disease and sought to put his wife in the hands of the nation's best doctors. But instead of finding answers, McCance heard the same tired, disheartening advice from every physician they saw.

"They said, you might try three Advil a day, it might help slow the progression of disease," McCance recalled. They also recommended trying Vitamin E and cholesterol drugs such as Lipitor to slow its progression.

Further advice from doctors wasn't helpful. "'And, oh yes, and by the way there are class of approved drugs from the FDA for Alzheimer's disease... they probably won't help very much, they only treat the symptoms and don't improve it very much and their effectiveness doesn't last for long,'" McCance remembered doctors saying.

Looking For Answers

In New England, astute sports fans know McCance as the newest part-time owner of the Boston Red Sox. He quietly bought a small percentage of the team earlier this year. But in business circles, 67-year-old McCance is something of a legend. Two years ago, Forbes Magazine named him one of the nation's top 10 venture capitalists, citing his leadership role in building one of the nation's premier venture capital firms, Greylock Partners, in Cambridge.

The shallow, largely uninformed medical advice the McCance's received — the same that millions of Americans get every year — didn't sit well with McCance.

"For a venture capitalist who has been in an industry that has seen what entrepreneurial talent combined with the small supportive capital can do to change the way we operate in business in our lives, that was unacceptable to me for a disease over 100 years old," McCance said.

McCance largely made his fortune identifying the smartest, most visionary people in the world and then financially supporting them as they built remarkable companies. Now, along with two other local venture capitalists, he's compiling what he believes is a dream team of top researchers — and they're all using proven venture capitalist tactics to coordinate a search for a cure.

They say they have no doubt one is within reach.

"I believe in the power of entrepreneurism, and I believe that well-financed, passionate entrepreneurs can do amazing things that common sense would make you scratch your head and say, I don't think it's possible," McCance said. "It is possible."

Finding The Funds

About five years ago, McCance started talking with people about the world surrounding Alzheimer's research and its funding. Generally, what he found were problems, beginning with how much is spent. The National Institute of Health (NIH) spends about $20 billion each year on research. Of that, about $5 billion goes to cancer research, and about $3 billion to AIDS/HIV.

But NIH spends just over $400 million on Alzheimer's. Dr. Anne Young, the head of neurology at Massachusetts General Hospital, says government investment in research clearly pays off, but in the case of Alzheimer's, it's not nearly enough.

"The longer we live the more people we're going to have in their 80s and 90s whose hearts, lungs, joints and all those things are working fairly well, but if you're mind isn't there, well, what's the point?" Young said.

This year, Alzheimer's is estimated to cost Medicare and Medicaid $172 billion. By 2050, the cost is forecasted to grow to $1 trillion annually. Dr. Bill Thies, of the Alzheimer's Association in Chicago, says if new therapies are not found, the nation's health care system soon will be overwhelmed.

"The ultimate outcome of that brings forward an almost a science fiction sort of the outcome where you have demented people walking the streets because there's no other place for them to be," Thies said.

Alzheimer's deaths increased 45 percent between 2000 and 2006, while deaths from other causes like heart disease, stroke and HIV during that time decreased.

"The fact is that the under $500 million investment in Alzheimer's disease is, ought to be embarrassing to some people in the federal government," Thies said. "They just are not paying attention to what is really important to the American public."

Private pharmaceutical companies annually invest untold millions in Alzheimer's-related research, but they rely mostly on government-supported investigators and institutions to do the highly-expensive basic science work and then build upon that work to develop drugs. In the case of Alzheimer's, much of the basic science — including what causes the disease — still needs to be figured out or is up for debate.

Dr. Robin Barr of the NIH says he can understand why people say that Alzheimer's research is underfunded. But overall, money is limited, while needs are many.

"There are a lot of chronic diseases out there, and diseases that were formerly acute, like AIDS, that have become chronic thanks go the medical advances we've made, ditto cancer, thanks to the medical advances we've made," Barr said. "Alzheimer's is in there, it is important, and I, like anyone else, really want to see that happen and advocate for it. But we have to recognize that we have these other diseases too."

Medical Research, Venture-Style

About five years ago, Henry McCance was invited to a dinner in Washington, D.C.,where a who's-who of neurologists, biochemists, geneticists and other scientists with complimentary skill sets was gathered. The event was organized in part by Jackie and Jeff Morby, of Martha's Vineyard. Jackie is another renowned venture capitalist, and Jeff is the former vice chairman of Mellon Bank. The scientists told them all about low government spending levels, how grant reviews move too slow, and how researchers spend about 30 percent of their time doing grant-related paperwork. But what really concerned McCance was when he heard that government research rarely takes chances.


"They said, 'Ya know Henry, the grant-making process at NIH is so risk adverse that the grants that we do get through this very laborsome, bureaucratic process are equivalent to a one-yard plunge by the New England Patriots fullback," McCance said. "Nobody that that we are in touch with today offers us research-support for a well-designed 20-yard pass play."

The discussion moved McCance to join with the Morbys to create a unique type of foundation: one that would search for a cure the same way a venture capitalist firm would handle its most valued new start-ups.

They would use a focussed approach, determining where the science needed to go, and then approaching the best researchers in the world to do the work.

Together with Phyllis and Gerry Rappaport of Nantucket and Boston, the three founding families would pay all overhead costs associated with running the foundation, so every donated or granted dollar goes directly into research.

"We've got for sure nine or ten researchers that are absolutely at the top of their game. They know that we are going to fund their most important projects, that they cannot get funded by this more conservative one-yard-at-a-time approach that the NIH or the Alzheimer's Association or other more bureaucratic organizations or groups constrict them to," McCance said.

They called their organization the Cure Alzheimer's Fund, and since 2006, it has assembled more genetic data about Alzheimer's than perhaps any organization in the world, uncovering more than 100 genes that, when inherited in certain forms, play significant rolls in determining if someone gets Alzheimer's disease.

But even if Cure Alzeimer's Fund lives up to its name, its work will be too late to help McCance's wife, Allison.

"I think I am realistic enough to know that the process of drug discovery is slow. The process of FDA approval is slow. And that anything that our little foundation achieves in the way of giving mankind better understanding of the disease, which hopefully will give for-profit companies clues that may lead to therapeutic programs for people in the future, none of that will be in time for my wife," McCance said.

After a career of fostering some of the most successful technology companies in the world, this is McCance's first philanthropic venture. And while it may be too late for Allison, McCance says he's doing the work for other families who might someday face the same devastating diagnosis.

Coming Tuesday: Part two of this series, which looks at some of the research and accomplishments of the Cure Alzheimer's Group, and how some of the information its uncovered may change how scientists think about the underlying causes of the disease.

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