Thread by @MSandersvn

This is a high level thread on why I believe #BEAM has the most fascinating business model in biotech ~

The traditional biotech model looks something like this -

Company establishes pipeline —> drug development commences —> drugs are commercialized. Rinse & repeat.

BEAM is the best example of a platform company that not only follows the traditional model, but has a completely separate revenue stream stemming from their underlying technology.

Base editing is the foundation for their drug development.

&

Base editing is the foundation for their strategic partnerships.

One umbrella technology, two very different applications. In-house development vs licensing deals.

Before I dive into the mutual benefit of licensing, it’s important to understand BEAM’s position in the market.

BEAM’s allure stems from the fact that base editing came out of Liu’s lab & is protected by a portfolio of patents.

Even with that being the case, a handful of companies announced the development of novel base editors. These announcements caused unease amongst shareholders to an extent.

However, if we operate under the assumption that not all base editors are equal, & the fact that BEAM spends significant R&D to optimize their editors, we can conclude that editor optimization is their moat & continual optimization is the key to maintaining it

To re-iterate, the number of companies with novel base editors does not matter. The quality of the editors does.

I believe BEAM’s patents are written in such a way that it makes it hard to optimize editors without infringing.

The most optimized base editing toolkit is a powerful moat. As long as that moat remains, BEAM will be the premier partner for any company looking to license base editing.

Now that I’ve covered that, let’s jump into the mutually beneficial licensing ecosystem BEAM has created ~

The receiving company is granted access to best-in-class editors, increasing the likelihood of successful drug development

BEAM is granted immediate cash & future revenue depending on commercialization.

This model is intriguing because there are simply too many monogenic diseases for BEAM to address.

In biotech, time is worth its weight in gold.

BEAM selected a handful of indications to dedicate their internal time & resources to.

Licensing allows them to reap the benefits of tackling a medley of other monogenic diseases w/o dedicating their own resources to development.

What hasn’t been mentioned is licensing out other aspects of their toolkit. BEAM currently licenses out their editing technology, but is also putting significant resources behind solving the delivery bottleneck.

What if BEAM licenses out both the editing technology & the delivery vehicle? Solving for effective delivery is an issue that will only grow larger as the space matures. Great editors without great delivery accomplish little.

Their acquisition of Guide signifies that they believe they can solve for LNP delivery outside of the liver. Therefore, licensing out optimized base editors paired with optimized LNPs is the perfect storm.

For example, BEAM is likely collecting a plethora of data on various base editor & LNP pairings. Depending on use case, companies could save significant costs via licensing from BEAM as opposed to solving for editing & delivery themselves through their own R&D.

This would streamline drug development for the companies that choose to license, allowing them to focus their expertise on other nuances while delivery & editing are taken care of.

I am aware that this thread makes a lot of assumptions including: BEs not being created equal, BEAM having best-in-class editors, the ability to solve for LNP delivery outside the liver, & the ability to package optimized BEs and LNPs together for licensing purposes.

However, that doesn’t take away the fact that BEAM is creating something absolutely fascinating.

The licensing model reminds me of SaaS products. The drug development model reminds me of traditional biotech. These two models blended together is something totally unique.

All in all, this blended model is a key differentiator for BEAM & contributes to my overall thesis as to why I think they will grow to be an exceptionally successful company this decade.