Investing in the Microbiome
Introduction
There are roughly 30 trillion human cells in our body, and sitting on top of them are another 39 trillion cells that belong to single-celled microbes. These microbes form communities across our bodies and are collectively known as the human microbiome. Our body has evolved alongside these microbes for millions of years, creating a relationship that benefits both us and the microbes, also known as symbiosis. Research shows that these microbes play a critical role in our health, and more work is being done to understand this symbiotic relationship so that we can harness the power of the human microbiome to prevent and treat diseases, as well as to manage optimal health.
Microbes can be found on healthy individuals in several different locations across and within the body. Some well-known locations include the skin, vagina, mouth, and gut, and there is also evidence of microbiomes existing in the lungs, urinary tract, and even the mammary gland. These microbiomes all play important roles in maintaining health in their respective organs, and more work is needed to fully uncover the ways in which these microbes prevent or contribute to disease. Although we have microbial communities across our body, there is one microbiome that stands out based on its size and influence on overall health: the gut microbiome. For this reason, the gut microbiome will be the focus of this blog.
What is the gut microbiome?
Trillions of microbes have taken up residence in our gut, specifically in our lower digestive system. Most of these microbes live in the large intestine, while some reside in the small intestine. These beneficial microbes (which include bacteria, viruses, fungi, archaea, protists, and more) serve many functions including, but not limited to: protecting us from disease-causing microbes, keeping our immune system in check, and even providing us with key nutrients for a healthy metabolism. The effects of the gut microbiome are not just limited to the gut - its benefits are seen across the entire body (more on this later).
A diverse gut microbiome keeps us healthy.
Scientists are still teasing apart the vast mechanisms by which the microbes in our gut have such a strong influence on health across our body, but there is one thing that we know for sure: a diverse gut microbiome is strongly associated with better health. If you have a diverse microbiome, this means that you are supporting the growth of a variety of different species of microbes. This is important because each of these microbial species plays a specific role and facilitates certain interactions within the gut microbiome community; in biology, we say that these microbes are occupying specific niches within the gut. If all of the niches are filled, our gut microbiome can function properly and keep us healthy.
There are many ways to promote a diverse gut microbiome. The most documented way is to increase fiber consumption. Fiber consists of carbohydrates that our digestive enzymes cannot break down, therefore it passes through our digestive system essentially untouched until it reaches the gut microbiome in our lower digestive tract. The microbes have the proper enzymes to break apart and access the carbohydrates that make up fiber, and these carbohydrates feed the microbiome. Eating vegetables and taking supplements containing prebiotics (specific forms of fiber) are some ways that you can increase your consumption of fiber, and keeping the microbes in your gut well-fed with fiber leads to a robust and diverse gut microbiome.
Another way to promote gut microbiome diversity is to ingest beneficial microbes. This can be done by eating fermented foods that contain live cultures or consuming probiotics in the form of supplements. Clinical studies exist that confirm strain-specific health benefits, but oftentimes, it is still unclear exactly how these microbes are promoting health. One way microbes alter our physiology is by producing special molecules, or metabolites, that can act as a signal to our body. These metabolites are sometimes referred to as postbiotics, and more research is needed to fully understand their influence on human health. Many companies create supplements that include either prebiotics (the food for the bacteria), probiotics (the bacteria themselves), postbiotics (the molecules produced by the bacteria), or synbiotics (a combination of any of the above) in an attempt to increase health benefits.
Source: Fullscript
The gut microbiome influences health across the body.
If there is a disturbance that affects the diversity of the gut microbiome community (low-fiber diets, antibiotic usage, gut infections - to name a few) many of its health-promoting functions are compromised. The resulting imbalance is known as dysbiosis, and dysbiosis is often associated with disease. For example, patients with Inflammatory Bowel Disease and patients with Irritable Bowel Syndrome both have dysbiosis in their gut microbiomes compared to healthy controls.
As mentioned previously, dysbiosis of the gut microbiome not only affects gut health but also health across the entire body. Here are a few highlights:
Cardiovascular System: The gut microbiome contributes to cardiovascular health in both direct and indirect ways. Dysbiosis in the gut microbiome can lead to increased levels of TMAO, a molecule that has been linked to an increased risk of cardiovascular disease. The production of TMAO requires both bacterial and human enzymes for its complete production, and studies have shown that eating more fiber reshapes the gut community and leads to lower levels of TMAO. Additionally, the gut microbiome can indirectly affect heart health by regulating inflammation and how our body metabolizes fats.
Brain and Nervous System: You have more nerves in your gut (also known as the enteric nervous system, or the “second brain”) than you do in your spinal cord, and these nerves send signals to the brain in what is known as the gut-brain axis. Just like the brain, the enteric nervous system also uses neurotransmitters as chemical signals. In fact, our gut cells are responsible for up to 95% of the body’s serotonin, a neurotransmitter that is often referred to as a “feel-good hormone”. Certain bacteria in the gut produce a molecule called tryptamine that is structurally very similar to serotonin and has been shown to act on serotonin receptors within the gut, demonstrating that the gut microbiome can directly impact our physiology. Additionally, gut microbiome dysbiosis has been implicated in many mental disorders, including anxiety and depression.
Autoimmune and Allergies: It is believed that the gut microbiome plays an important role in immune system development, particularly in the early stages of life. If the immune system does not develop properly, this can lead to complications later in life, such as asthma, allergies, and autoimmunity. Studies show that infants with gut microbiomes that have low diversity have a higher risk of developing allergies later in life, and gut microbiome dysbiosis is associated with many autoimmune diseases. For this reason, some companies like Tiny Health and Snapi Health are focusing efforts towards addressing gut dysbiosis in babies and children.
Sex Hormones: There are distinct differences between the gut microbiome of males and females as well as differences between females who are menstruating versus postmenopausal, indicating a relationship between sex hormones and the gut microbiome. In fact, research now shows that the gut microbiome can directly influence the levels of sex hormones in the body. For example, bacteria have an enzyme known as β-glucuronidase that can interfere with our body’s attempts to eliminate estrogen thus leading to changes in circulating estrogen levels. Bacterial genes that affect estrogen metabolism in the body are collectively referred to as the estrobolome. Also, diseases impacting reproductive health, such as polycystic ovary syndrome (PCOS), have been associated with gut dysbiosis. More work needs to be done to understand the relationship between the gut microbiome and sex hormones, which is why Coyote Ventures is sponsoring the Sex Hormone Microbiome Collective, a research collective within UC San Diego for their efforts in this space.
Why should we invest in the gut microbiome?
Clearly, the gut microbiome plays a large role in our overall health. As it turns out, many of the diseases described above disproportionally affect communities that have been traditionally overlooked in scientific research. This is one reason why Coyote Ventures is interested in opportunities to invest in the gut microbiome space.
Due to its significant influence on human health, understanding and utilizing the gut microbiome to prevent and treat diseases is an excellent way to address some of our current health crises. Currently, cardiovascular disease is responsible for one-third of deaths across the globe, and heart disease costs the US roughly $219 billion each year. Mental health issues are consistently on the rise, affecting close to 50% of American adults under the age of 45, and contributing to a global economic burden estimated at $5 trillion. Similarly, autoimmune diseases and chronic illnesses are on the rise and are expected to increase due to long-term complications associated with COVID-19. The gut microbiome has been implicated in all of these diseases and more, making it a necessary focus for improving human health moving forward.
Additionally, some of the technology used to analyze the gut microbiome has become more commonplace, making it increasingly accessible. For example, the cost and time of DNA sequencing decreased rapidly around 2007 with the invention of Next-generation sequencing, and it continues to go down. Sequencing now costs roughly 0.00001% of what it cost to sequence the first human genome, and it only takes a few hours as opposed to years. These advances in sequencing helped contribute to the successes of the Human Microbiome Project, which has provided invaluable insight into the workings of the human microbiome since its launch in 2007. With sequencing costs decreasing, companies can provide more affordable microbiome analyses for their customers. Cheaper sequencing is a great advancement, and it can be even more powerful when paired with computational programs, including AI, that can quickly analyze large amounts of data. Companies are using AI to provide unique insights to customers about their health and to scientists about the biology of the gut microbiome.
Source: National Human Genome Research Institute
Another reason now is a great time to invest in the gut microbiome is that people are becoming more interested in understanding how their bodies work and taking more control over their health. The consumer healthcare market was $284.16B in 2022 and is estimated to reach $608.39B by 2032. The COVID-19 pandemic had a large impact on this market by creating more opportunities for people to make direct investments in healthcare services such as OTC drugs, telehealth services, and dietary supplements. Many companies that focus on the gut microbiome take advantage of this large market through their D2C business models. The gut microbiome space itself is expected to grow at a CAGR of 25.3% from 2023 to 2032, making now an opportune time to invest.
Finally, now more than ever, there are a wide variety of vectors for investment within the microbiome space due to our increased understanding of its biology. Some of the first microbiome focused companies, including Seres Therapeutics, were founded in 2010 soon after the launch of the Human Microbiome Project. The main focus for many of these companies was to develop safe microbial transplants that could be used as therapeutics. From this, companies started to focus on developing biotherapeutics that focus on specific diseases. Outside of therapeutics, companies such as CosmosID started sequencing the gut microbiome in 2008. These microbiome sequencing companies started as B2B, mostly providing services for research institutions and clinicians. Then companies started to expand to include D2C services. Now, there are many companies that go beyond simply reporting sequencing results but also use digital health platforms to provide personalized health insights.
Areas to invest in the gut microbiome.
Today, there are a number of different opportunities to invest in the gut microbiome. Some of the major categories include digital health platforms, diagnostics, biotherapeutics, supplements, and research. Different considerations should be made when assessing whether or not to invest in these diverse vectors.
Digital Health: Many companies in the microbiome space are using digital health platforms to bring insights from the microbiome field to the public. This is usually accomplished by collecting data from the consumer and providing personalized health insights based on specific analyses. Therefore, these digital health platforms are mostly seen in the diagnostic and supplement vectors of the microbiome space. Depending on the type of data collected, there will be different scientific considerations to keep in mind when evaluating a company (more on this below). When performing diligence in the digital health space, it is also important to consider how the health insights are being shared with the consumer. Some companies provide more specific and personalized recommendations while others also provide a health coach to work with the consumer. Additionally, these companies will often incorporate AI into their pipelines, but these AI models also vary - some use a database to assign results into predetermined categories while others are also trained to review literature and update recommendations accordingly.
Diagnostics: There are a few different approaches that companies are taking to help people better understand their gut microbiome and its impacts on their health.
Sequencing - Many companies provide sequencing services for the gut microbiome, but there are key parameters that set some apart. One way to differentiate these companies is to look at the type of sequencing they perform. In general, a deeper sequencing approach (such as shotgun metagenomic sequencing) can provide more information than a superficial sequencing approach (such as 16S sequencing) and lead to more specific health insights.
Biomarker measurement - Although the most popular method for analyzing gut microbiome health is sequencing, there are a number of other biomarkers that can provide more information on how the gut microbiome is functioning. Measuring the metabolites that the gut microbiome produces is a very powerful way to evaluate an individual’s health because these molecules have a very direct impact on human physiology. Iollo is a company that stands out as not only measuring these metabolites but also leveraging AI to provide health insights from the results. When evaluating these companies, it is important to make sure that there is research to validate the tests and a business model that supports scalability.
Medical devices - Currently, the easiest way to sample the gut microbiome is by collecting feces. Some companies have developed technologies to simplify this process, including BiomeSense and Tend. Tend also provides a device that makes it easy for clinicians to use the fecal samples for therapeutic purposes (such as fecal microbiome transfers) in-house. The fecal microbiome is a good representation of the major components of the gut microbiome, but it lacks nuanced information such as the spatial organization of these communities along the digestive tract which can provide valuable information about gut health. Companies like EnVivo and InOut Biome have developed devices to collect samples along the digestive tract to address this issue. These companies will most likely benefit from partnering with clinicians for use in clinics as opposed to D2C.
Biotherapeutics: The biotherapeutic vertical is one of the more popular focuses for startups in the microbiome space. These biotherapeutics are designed as drugs to treat disease and must go through the necessary FDA drug approval process to be used as a therapeutic. Biotherapeutics can consist of a specific microbial strain found in the gut microbiome that has been demonstrated to ameliorate a disease, or it can be a genetically engineered strain that serves a specific function aimed at treating a disease. There are also companies that develop molecules that are designed to specifically modulate the microbial community. Although most of these companies start off focusing on one disease, many are setting up pipelines to help identify novel biotherapeutics in the future. If these pipelines are viable, these companies may have a competitive advantage because they will be able to more easily streamline the discovery and validation processes. When evaluating these companies, the science is incredibly important to determine if the therapeutic has the potential to make it through the necessary clinical trials (only 1 in 10 drugs pass FDA approval). In addition, it will be important to look at the team structure. Many of these companies are spinoffs from academic labs and are founded by people with scientific backgrounds. It is critical that someone on the team has the expertise necessary to scale production, ensure long-term financial success, and secure the necessary IP.
Supplements: Supplements are different from biotherapeutics because they do not require FDA approval. Probiotics and prebiotics are the most common supplements developed to target the gut microbiome.
Probiotics - As mentioned above, probiotics are microbes, usually bacteria, that have been associated with “healthy” gut microbiomes. There are many naturally probiotic foods that we consume, such as kimchi and kombucha, and some companies are developing more foods (especially beverages) that contain probiotics. Oftentimes, probiotics are sold in a capsule, and there are clinical studies that confirm strain-specific health benefits despite not understanding the underlying mechanism driving these phenotypes. When performing diligence on companies that produce probiotic supplements, it is critical to evaluate the research that went into strain identification, the manufacturing process, and the data demonstrating that their product produces specific results in humans.
Prebiotics - Many dietary supplements in the microbiome space focus on prebiotics, also known as fiber. As mentioned previously, there is an abundance of scientific evidence demonstrating that fiber supports a healthy gut microbiome. Similar to probiotic companies, it is important to evaluate the science that supports different prebiotic supplements, and the company should be able to demonstrate that their products provide health benefits in humans.
Research: In general, there is still a lot not known about how the microbiome impacts health, and there are many companies that are focused on helping the scientific community better understand these mechanisms. Developing tools to analyze the microbiome is essential for our understanding of its role in human health, and our ability to provide health insights and recommendations is dependent on these tools. These tools fall into a few different categories:
Biological assays - Some companies are focusing their efforts on developing assays that can be used by researchers to investigate mechanisms that link the gut microbiome to health or disease. Some assays include cell-based culture models (Altis Biosystems), protein profiling (Biomeprobe), drug discovery platforms (Interface Biosciences), and standardized ways to evaluate stool samples (The BioCollective). These companies might partner with research institutions within academia or industry to aid in critical high-throughput screening approaches. It is also possible that some of these companies will attempt to develop therapeutics based on their findings. As with biotherapeutics, it is important to evaluate the team and their ability to scale these assays to meet research demands.
Computational platforms - The amount of data being collected on various aspects of the gut microbiome is increasing at a rapid speed. To efficiently process and analyze this data to obtain key insights into the biology of the gut microbiome that can be leveraged to promote health, we need computational platforms. It is imperative that these platforms are capable of handling diverse data sets - such as genomics, metabolomics, transcriptomics, patient health data, etc. in order to provide the most robust models. These computational platforms will most likely be used by researchers, and as a result, it might be beneficial to focus on the partnerships these companies have with larger academic or industry research institutions.
Limitations in gut microbiome technologies.
Despite all of these exciting innovations, there are a few notable limitations to some gut microbiome technologies. One consideration is the feasibility of commercialization. Diagnostic and research tools can both be scaled with relative ease due to increased access and affordability of technologies and limited regulatory hurdles. On the other hand, the commercialization of live biotherapeutics and dietary supplements is hindered by regulatory authorities and manufacturing capacity. The road to FDA approval is expensive and can take many years with no guarantee of success. It can also be costly to scale up the manufacturing of microbial products due to large amounts of resources such as growth media. These production costs may limit consumer accessibility, which leads us to another limitation: out-of-pocket costs for consumers. Currently, insurance coverage for microbiome technologies is highly variable. Many insurance companies rely on research supporting the efficacy of a product as well as guidelines from the government to determine what to cover under their plans. As we learn more about the benefits of the gut microbiome, insurance companies will likely adapt coverage allowing for more widespread use of these technologies.
Conclusion: What is Coyote looking for?
The gut microbiome plays a critical role in human health, and there are many companies that aim to increase our knowledge of its biology to help prevent and treat diseases. Coyote Ventures is interested in companies that use digital platforms to provide customers with microbiome analysis and health insights. We are excited about the number of investment opportunities within the gut microbiome space, particularly companies that solve problems that disproportionately affect overlooked populations. Because of this, we are specifically interested in companies that focus on a specific condition, such as DayTwo which addresses the role of the gut microbiome in blood sugar response for patients with type 2 diabetes. With so many diseases on the rise, including chronic conditions associated with disruptions in gut microbiome health, now is a great time to invest in long-term solutions.