The Trump administration's recent directive to the National Institutes of Health (NIH) to impose limits on specific types of funding for research institutions has sparked concerns about the impact on early-stage biotech startups. Despite a federal judge's temporary block on the policy change, the uncertainty surrounding NIH funding has created a sense of unease among biotech entrepreneurs. However, Chris Gibson, co-founder and CEO of Recursion, a biotech company that uses AI for drug discovery, has seen an opportunity in this uncertainty.

Gibson, along with serial biotech entrepreneur David Bearss, has launched the Altitude Lab Pre-seed Venture Fund, which aims to invest $100,000 to $250,000 in 10 to 15 biotech companies. The fund will focus on startups that were qualified for Small Business Innovation Research (SBIR) grants from the NIH, providing a vital source of funding during this period of uncertainty.

The Altitude Lab Pre-seed Venture Fund will be managed by Altitude Lab, a Salt Lake City-based, non-profit, life sciences accelerator that Recursion set up five years ago. Gibson's personal experience with SBIR grants has been instrumental in shaping the fund's mission. "SBIR grants are near and dear to my heart," Gibson said. "The first thing I did when we started Recursion was write an SBIR grant, and we got $1.46 million from the federal government." That 2014 funding helped Recursion create its dataset, which formed the basis of its machine learning algorithm and drug discovery platform.

Since then, Recursion has raised multiple rounds of venture capital from investors such as Lux Capital, Menlo Ventures, and Felicis, and went public in 2021. Recursion's current market capitalization is over $4 billion. Gibson hopes that the fund "will fill the gap" for new biotechs during this period of uncertainty around NIH funding. "Early science is super risky. It's hard to know how these companies are going to turn out, but companies funded with SBIR grants are dramatically more likely to go on to be able to raise private money," Gibson said.

In addition to providing critical funding, the Altitude Lab Pre-seed Venture Fund will also offer 12 months of office and lab space at Altitude Labs facilities to the selected startups. This will not only provide a supportive environment for early-stage biotechs but also help grow the biotech ecosystem in Salt Lake City. "We're creating our own mini-Cambridge here in the streets of Salt Lake City," Gibson said, highlighting the potential for the region to become a hub for biotech innovation.

The launch of the Altitude Lab Pre-seed Venture Fund is a timely response to the uncertainty surrounding NIH funding, and its focus on early-stage biotech startups could have a significant impact on the industry. As the biotech sector continues to evolve, initiatives like this fund will play a crucial role in supporting innovation and driving growth.