Making Financial Management Part of the Cure - Our Investment in Auxilius
Today, we are delighted to announce that we are leading Auxilius’s $10M Series A and that Roseanne Wincek will be joining the company’s board of directors. Auxilius’s platform simplifies and streamlines clinical trial financial planning and analysis for biotechs and small pharma. Auxilius helps public companies, like X4 Pharma, move their critical clinical spend out of excel as complexity grows. We first met the team through XYZ Venture Capital’s Ross Fubini, who was Roseanne’s colleague when she first started in venture at Canaan Partners. Ross led the company’s seed round in 2020, alongside Yumin Choi and Amanda Zajac at Bain Capital Ventures.
Over the past decade, there’s been a huge shift in how and where drug development takes place, with over 80% of clinical trials being sponsored by emerging biopharma companies. Additionally, these clinical trials are increasingly outsourced to external vendors and service providers. This results in siloed information, the use of outdated tools, and manual processing - making cost management of trial budgets incredibly complex. Good science is necessary, but it’s not sufficient - trial outcomes depend on not only the underlying biology but also the trial’s management. A 2018 study found that 29% of a set of phase 3 trials failed for reasons other than clinical development or safety - a full 22% of those failed because they ran out of money! The need for integration of financial and accounting information across all aspects of clinical trials is only intensifying as the amount of capital invested into private biotech reached $28.5B in 2021. There is a lot of cash on biotech balance sheets, with much of it earmarked for clinical trials.
Auxilius allows biotechs to run more efficient and accurate trials and supports their goal to move life-enhancing drugs to market sooner. At Renegade, we invest in companies that we believe can become movements. Usually, we say that movements are companies that can become verbs. There are 3 hallmarks that movements possess:
Purpose driven: Adam Weisman, Co-Founder & CEO, and Erin Warner Guill, COO, have worked together for nearly 7 years in healthcare data analytics at Decision Resources Group. Over these years, they’ve built tons of customer empathy and an extremely nuanced view of the current state of the art and its pain points. And (!!) - they gained this experience working side by side as colleagues. Even Auxilius’s VP Engineering, Cem Oztas, worked with them at DRG. We love the combination of years of industry expertise and experience as a team.
Attacking a market at a tipping point. The share of clinical pipeline run by large pharma has decreased by half over the past decade. Today, biotech and small pharma have taken that share and are increasingly partnering with contract research organizations (CROs) to run this pipeline. In 2020, biotech and small pharma spent $10B with CROs, an amount that is expected to more than double by 2025. As capital markets soften for young private and public companies, Auxilius provides better visibility into projected financials, more control over their runway, and the ability to become more capital efficient. Despite my own life science background, I learned early in my investing career that technology and healthcare investing are two very different skills. Today, as a staunch tech investor, I see an industry going through massive shifts and a way to get exposure to this trillion dollar market.
Building a compounding advantage. We believe that owning a financial workflow is a powerful wedge to a deep, multifaceted customer relationship. We’ve seen this first-hand in our Series C investment in Built Technologies. Built started by selling construction loan management software to banks to streamline the distribution of loan dollars to builders. By owning that key workflow, they’ve been able to expand to payment management and have built a marketplace and insurance offering. We believe that Auxilius has a similar opportunity for biotech - by owning this critical workflow, they can build a true platform of products. We’re not the only ones that see this opportunity - Chase Gilbert and Andrew Sohr from Built are joining the round!
Auxilius could be the difference between bringing a cure for disease to market and seeing it languish in a lab. To join the mission to help propel biotech companies toward financial mastery and making financial management part of the cure, check out their careers page!