Universities Step Up as Translational Funders Amid NIH Uncertainty

Despite cutbacks to NIH grants and a difficult funding market, early-stage investment is thriving, said Marc Sedam, Vice President of Technology Opportunities & Ventures at NYU Langone Health. The reason? Universities like his are stepping in to shoulder seed funding.

Sedam told Cure that his university is set to launch more than 20 startups in 2025, for the third year in a row.

“Early-stage capital is still there, because early-stage capital is cheap,” Sedam said. “The economic environment doesn't really change the financials of early-stage science in the core. It might make things a little tighter, it might make the deal terms a little bit tougher, but people who fund early-stage research are not going to stop funding early-stage research.”

The challenge comes when these budding companies seek continued funding to expand their translational research, he said, speaking as part of a panel at the 2025 BIO conference on “Fueling Innovation: Strategies for Funding Academic Spin Outs.”

The funding available to healthcare startups is highly competitive and having compelling science isn’t enough to secure interest, he noted. (See “Mayhem, Destruction and Biomedical Tumult from Trump Cuts.”)

“It's actually a bifurcation – you're seeing the companies that get funding get all the funding, and then there's not as much left for everybody else, Sedam said.

The companies that do find investors have typically already tested their therapy in patients.

“If you can get two patients worth of data in phase one, you have some human data, and the pharma companies will go, ‘Okay, well, at least I know what happens in some people,’” Sedam said.

What Healthcare Areas Are Getting Funded?

While translational funding may be tightening in some areas, Sedam said certain fields remain reliably fundable.

“Cancer is always huge,” he said. “We just do a lot of work in cancer, so there’s always going to be interest.” Beyond oncology, Sedam noted two modalities in particular that continue to attract investor attention: monoclonal antibodies and small molecules.

He drew a distinction between the challenges of preclinical models for small molecules and the relative predictability of humanized antibodies.

“With a small molecule, you can see it work in a test tube and in a mouse, but the human system has a way of not working like a mouse,” he said. “When you have a humanized antibody, you kind of know a lot of the time what it’s going to look like in a human.”

This emphasis on translational validation is reflected in the startups NYU Langone backed last year. DiaphOne Therapeutics, for example, is developing small molecules that target the root causes of diabetic complications, conditions for which existing therapies only treat secondary symptoms. Another startup, Cara Systems, aims to reduce one of the leading long-term causes of disability, stroke, by combining wearable devices, telemedicine and AI to provide expert preventable stroke care.

“What I really care about is how many startups will get funded and be successful and employ people and move the needle,” Sedam said. “I think what you're seeing is universities providing translational research funding, providing their own capital, and actually stepping a little bit forward to get some value.”