Weeks before the pandemic hit, forcing Mahesh Narayanan to lead his Maryland biotech into the Covid-19 treatment arena, his world changed for another reason: His 4-year-old niece received an autism diagnosis.
The PepVax Inc. founder and CEO dove into researching her therapy options, “and we were just struggling to find anything that worked,” he said. “That’s when I realized that this is very much a barren land when it comes to innovative ideas to help these children with autism or any intellectual disability.”
The local entrepreneur, also an angel investor, connected with folks pushing for innovation in the neurotechnology space, which includes devices and other products that monitor or affect brain activity. He started learning about companies —mostly later-stage ventures — advancing tools and tech to make life better for these patients. But Narayanan also found that there’s “just not enough funding” to get younger companies beyond the idea phase, he said. “So all of these investors who had hundreds of millions of dollars just didn’t have any companies to invest in.”
His solution: Neuvation Ventures, his new impact investing vehicle that’s now raising a $25 million fund and is based in Baltimore. The initiative — its name a meld of “neurotech” and “innovation” — will back nascent startups and research focused on autism spectrum disorder and other developmental disabilities, with products ranging from digital health to diagnostics to therapeutics.
Narayanan wants to help support young companies in their routes to market. That involves reaching a point “where they’ll be more fundable for early-stage investors,” he said, “and better-fit for those types of big checks, which they’re not fit for right now.”
To do it, the firm will make small investments (think: $100,000 or $200,000 apiece) in companies with new ideas or those applying products from other disease areas to the intellectual disability space. That could mean using artificial intelligence to make diagnoses or tapping virtual reality to teach kids who learn differently from neurotypical students, for instance. Expanding the pool of treatment options is critical, Narayanan said, because the earlier an intervention can happen, the more likely the child is to benefit — and right now, he said, the unmet need is huge.
So he’s starting to raise the first $10 million, enough capital to start making investments in pre-seed and seed-stage companies in early 2022. The goal, he said, is to raise the entire $25 million, including a second $15 million close, within the next eight to 10 months. The fund will invest in companies around the world, but each must have U.S. presence. Anyone seeking investments can apply through Neuvation's website.
Narayanan got into angel investing after backing early-stage life sciences companies born from the University of Pennsylvania, his alma mater, he said. Notably, he got PepVax off the ground in its early days with a crowdfunding campaign. That company has a drug delivery platform that uses a patient’s cells to fight cancers, infectious diseases and genetic disorders. It pivoted early in the Covid-19 crisis to develop an immunotherapy and vaccine for patients with severe cases of the coronavirus, which it continues to advance.
In addition to being PepVax's president and CEO, Narayanan is running Neuvation Ventures as its general partner, with veteran startup adviser Michael Frank as principal and an opening for another principal or partner to help with fundraising and due diligence, he said. Neuvation is headquartered in Baltimore, where Narayanan’s wife is based for her residency, he said. PepVax, formerly headquartered in Bethesda, recently moved to a a smaller space in Silver Spring, to cut back on expenses during the Covid crisis.
Narayanan said PepVax will remain a priority as he spends time on his latest endeavor, which he hopes will eventually help commercialize ideas that can have a real impact on the lives of children like his niece.
“While I’m trying to do what I can from the drug development and treatment space — I don’t have a bandwidth or time to do all of this for neurotech as well," he said. "But I can certainly fund some good entrepreneurs who can.”
