Campaign of the Week: Parkure

By AltFi on Tuesday 18 November 2014

Savings and Investment

The project that most captures the imagination this week is Parkure – an organization that is looking to develop a cure for Parkinson’s disease.

Traditional methods of drug discovery have thus far proved futile in the search for a PD cure. Parkure will use genetically engineered fruit flies that develop PD in its attempts to succeed where others have failed. The strategy, broadly speaking, is to trial as many candidate drugs as possible. If Parkure chances upon a cure, it will gain access to a market worth $2.7bn.

The Investment Opportunity

  • Parkure is looking to raise £100k but will stretch to £150k if the demand is there. The equity on offer is 11%, but again this will increase to 16% depending on whether the project overfunds.
  • That means that the business is currently being valued at roughly £910k.
  • It’s very difficult to put this valuation into context. Parkure doesn’t yet have a product. This is reflected in the company’s year 1 financial projections – which show zero revenues. This of course makes sense as the purpose of the fundraise is to develop a cure – but investors have to be mindful of the risk that Parkure may in fact never have a product.
  • In Parkure’s “Phase 2” – which will begin in 6-12 months and span 3 years – the company plans to raise an additional £1.5-2m through a combination of equity investment and a non-diluting grant.
  • Here’s a quote about Parkure’s exit strategies: “Investors will be able to exit from this investment when additional funding is raised in order develop IP assets of Parkure Ltd or when these assets are sold. Although we cannot guarantee it, we aim to achieve this within four years. Alternatively, the company may be sold, also allowing investors to redeem their shares.”  

The Tech Take by Oli Batchelor

Experimentation is vital in the formation of any new idea. For some concepts only small amounts are required as the planning, design and calculations have been done to such an extent that any experimentation only verifies that theory in this instance does in fact match reality. A one-time deal so no need to pay much attention to perfecting the process. However, science is not as precise as one would hope and many solutions require more of a 'trial and error' approach. Unfortunately health care solutions fall into this category. With a focus on Parkinson's disease Parkure hopes to streamline the experimentation process by applying the same principals many companies seeking innovation have chosen to do.

The mantra of "fail often, fail fast, fail cheap" has become commonplace in many software development companies and also among other companies looking to innovate. The idea is that it is more productive to optimise the process of failing while making sure that lessons are being learnt than it is to spend huge amounts on theorising and planning. Parkure achieves this by inducing Parkinson's disease in fruit flies which can then be used to test various candidate drug compounds, in order to gauge their effectiveness at stopping the nerve cell degeneration. By using this method they can quickly and cheaply test a myriad of compounds that simply wouldn't be economically viable through traditional clinical trials thus raising the chance that they find the winning solution.

Ultimately the crux of whether investing in Parkure will pay off is not only if there is in fact a compound out there that can stop Parkinson's but whether high volume trials will find it faster than a dedicated team that reach a new level of understanding of the disease. A comparison could be drawn with the infamous dating app 'Tinder'. The app allows for large volumes of potential matches to be viewed so rapidly that sooner or later it will provide a match between two people regardless of whether the individual might be considered an ‘acquired taste’. But can that ever really replace catching someone's eye across a room and getting that instinctual feeling that this person could be the one? Ultimately huge quantities of data are very useful but sometimes it's the small amount of quality data that can go the distance and cross the finishing line.

Campaign Breakdown

Target fundraise: £100,000-150,000

Amount raised so far: £12,500

Number of backers so far: 10

Equity offered: 11-16%

Days left to invest: 76

Minimum investment amount: £500

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