Bain Capital Life Sciences and the High-Risk, High-Reward Quest for a New COVID-19 Drug

Andrew Hack, MD, PhD, was a partner and managing director of Bain Capital Life Sciences (BCLS), which managed a portfolio of investments in biotechnology, pharmaceuticals, and medical device companies. In the early months of 2020, as COVID-19 spread rapidly around the globe, Hack began contemplating a potential investment in Atea Pharmaceuticals and its most advanced experimental antiviral AT-527 as a treatment for the disease.

The potential returns on AT-527 could be substantial; the global market for drugs that could effectively treat or prevent COVID-19 would likely be massive. That said, given the accelerating pace of the pandemic, if BCLS chose to go forward, it would need to make its investment earlier in the process of drug development than it usually would.

Despite the high level of uncertainty and risk, Hack was drawn to the opportunity Atea represented. The question was whether Atea represented the right investment opportunity profile for the fund. Hack and his team needed to decide quickly, based on the limited data at hand: Should they recommend that BCLS invest in Atea? If so, how should BCLS structure the deal to minimize its risks and maximize its returns--while also providing Atea with the capital it needed to bring its drug to market?