For investors and venture capitalists in the pharmaceutical and biotech sectors, value is created not just through innovation but through strategic decisions that reduce risk and improve efficiency. The integration of human tissue testing into the drug development process is an example of such decisions. Testing drug candidates on fresh or frozen human tissue reduces reliance on animal models, which often fail to predict human responses accurately. Only ~1 in 5,000–10,000 compounds in development make it to market, largely due to poor preclinical prediction of efficacy, which leads to failure in Phase II and III clinical trials.1 By providing human-relevant data earlier in the pipeline, these human tissue-based studies offer a practical route to help de-risk assets, strengthen investment cases and support faster movement through preclinical and clinical milestones.
Compared to traditional models – such as animal models or immortalized cell lines - human tissues offer greater predictive accuracy for clinical outcomes2, 3. This improved translational relevance can lower attrition rates, reduce unnecessary clinical trials, and sharpen go/no-go decisions—making it particularly attractive to investors seeking strong scientific and financial foundations. Regulatory dynamics are also shifting in favor of human-relevant models. The FDA Modernization Act 2.0, signed into law in 2022, permits companies to submit non-animal data as part of investigational new drug (IND) applications4. This reflects growing awareness that many animal studies do not reliably translate to human results5, and it opens the door for more agile, human-focused development strategies.
De-risking Drug Development
Drug development is notoriously high-risk, with failure rates exceeding 85% between preclinical testing and market approval6. For investors, especially those involved in early-stage funding or portfolio management, this level of uncertainty presents a significant barrier to value creation. Human tissue testing offers a pragmatic solution by providing more predictive data early in the pipeline, allowing poor candidates to be identified before costly clinical trials.
Using ex vivo human tissue collected from ethically sourced surgical or biopsy procedures companies can evaluate pharmacological activity, tissue penetration, and potential toxicity in a system that closely mimics in vivo human biology. Unlike traditional preclinical models, which may fail to capture critical human-specific mechanisms7, tissue studies can reveal important drug behaviors that reduce the likelihood of late-stage surprises. The high financial cost of relying on animal models of human disease is illustrated by the failure rate of drugs to treat inflammation in critically ill patients. Seok et al. (2013) set out to systematically evaluate, on a molecular basis, how well murine clinical models mimic human inflammatory diseases in patients. They found that inflammatory stresses in mice produced markedly different genomic responses from those found in humans, with little overlap, and reported that every one of the previous 150 clinical trials had failed.
This infographic highlights the investment advantages of leveraging human data earlier in drug discovery.
This level of data-driven decision-making is particularly valuable in early-stage ventures, where a single asset may represent the bulk of a company’s valuation. For venture capitalists, it de-risks the path to follow-on funding, partnership, or exit. For shareholders in later-stage companies, it improves R&D efficiency, shortens time-to-market, and increases the likelihood of regulatory approval, which all support stronger earnings projections.
Moreover, human tissue testing can support first-in-class or best-in-class claims by demonstrating a unique mechanism of action in relevant human systems. This not only bolsters scientific credibility but enhances commercial positioning when negotiating licensing or acquisition deals. By using ex vivo lung tissue from asthma patients, GSK validated Mepolizumab’s (IL-5 antagonist for asthma and eosinophilic disease) ability to reduce eosinophilic inflammation before clinical trials—de-risking development and accelerating investor confidence in its mechanism.8
Another example is Arena Pharmaceuticals, where human colon biopsies mounted in Ussing chambers demonstrated Etrasimod’s (Ulcerative Colitis) effects on barrier integrity and immune modulation, supporting a precision approach that added value ahead of Phase II trials and eventual acquisition by Pfizer.9
Accelerating Time to Market
For both early-stage investors and public shareholders, time is a critical factor in maximizing returns. Every additional month in development delays revenue generation, increases burn rate, and raises the likelihood of competition reaching the market first. Human tissue testing can help compress development timelines by enabling better decision-making earlier in the pipeline and improving the efficiency of regulatory submissions.
Human tissues can provide more accurate, clinically relevant data, so companies can often reduce their reliance on extensive animal studies or redundant in vitro assays. In some cases, human tissue results can support mechanism-of-action claims, target validation, or early proof-of-concept studies that would otherwise require significant time and investment to complete in vivo10. For venture-backed companies, this allows them to reach meaningful inflection points—such as IND-enabling studies or first-in-human trials—faster, thereby accelerating opportunities for Series B funding, strategic partnerships, or acquisition.11
At later stages, human tissue data can support faster regulatory progress. As previously mentioned, the passing of the FDA Modernization Act 2.0, companies are now permitted to use non-animal data to support IND applications, including evidence generated from human tissue studies. This can streamline regulatory packages and reduce the need for bridging studies between animal and human data, saving months or even years in development.
One clear example of human tissue testing creating value comes from our collaboration with Arcede Pharma, a spin-out from Respiratorius. Arcede is developing RCD405, a novel inhaled therapy for severe asthma and COPD. Before entering toxicology and clinical phases, the Swedish Medical products Agency requested comparative data between RCD405 and existing bronchodilators.
Using ex vivo human bronchi, REPROCELL demonstrated that RCD405 caused complete airway relaxation, comparable to standard-of-care treatments, providing critical human-relevant data to support regulatory submissions. This data, alongside anti-inflammatory findings from other assays, gave RD045 a clear competitive edge and was essential in de-risking its path towards clinical trials.
Earlier clinical insights from human tissue testing can enable adaptive trial design or patient stratification strategies, which are becoming increasingly important in oncology, neurology, and immunology. These strategies not only reduce trial costs but also improve the probability of clinical success—two outcomes that directly impact enterprise value.12
Figure 1: REPROCELL Europe, formerly Biopta, has tested over 1,000 drugs through studies to this date. We have identified 10-20% that were destined to fail in clinical trials and provided evidence of human safety or efficacy in the remaining 80-90% of drugs tested. Overall, we have helped pharma companies save over £55 billion in wasteful costs.
Enhancing Competitive Positioning
As biotech competition intensifies, companies need more than promising data—they need clear, credible differentiators. Human tissue testing provides this by offering human-relevant insights into efficacy, safety, and mechanism of action, which are especially valuable in complex disease areas like oncology and inflammation.
For investors, this kind of translational evidence strengthens a company’s position during due diligence, fundraising, or partnership discussions. In early-stage ventures, it can increase confidence in the asset’s potential and support higher valuations. For later-stage companies, it reinforces scientific credibility and competitive advantage.13, 14
On the strategic side, human tissue testing can also serve as a platform differentiator. Companies that consistently apply this methodology demonstrate a commitment to translational science and data quality—traits that resonate with pharma partners, acquirers, and regulatory agencies. In some cases, the platform itself (e.g., proprietary access to fresh human tissue, specialized assay panels, or AI-enhanced tissue analytics) becomes a monetizable asset, expanding the company’s business model beyond a single therapeutic program15. Animal studies have deepened our understanding of disease, but their ability to predict treatment success in humans remains debated. A review of highly cited animal research found only about one-third translated to human trials, and just 10% led to approved treatments. This 90% attrition rate highlights the significant challenges in translating even influential preclinical findings to the clinic.16
For publicly traded companies, differentiation drives better analyst coverage, more favorable investor perception, and improved resilience during market fluctuations. For early-stage ventures, it can mean the difference between stagnation and a successful exit.
Conclusion
For both venture capitalists and shareholders, the value of human tissue testing extends well beyond the lab bench. It provides a tangible mechanism to de-risk R&D, accelerate development timelines, enhance company differentiation, and align with evolving regulatory and ESG priorities. To see how human tissue testing has delivered real-world commercial and clinical impact, explore our case studies page.
In an environment where capital efficiency, translational relevance, and ethical responsibility are increasingly scrutinized, companies that embrace human tissue models position themselves not only as scientific innovators but also as more attractive, resilient investments. As the biopharma industry continues to evolve, human tissue testing stands out as a strategic tool for generating long-term commercial and shareholder value.
References:
1. Sun, D., Gao, W., Hu, H., & Zhou, S. (2022). Why 90% of clinical drug development fails and how to improve it?. Acta pharmaceutica Sinica. B, 12(7), 3049–3062. https://doi.org/10.1016/j.apsb.2022.02.002
2. Singh B, Abdelgawad ME, Ali Z, et al. Towards More Predictive, Physiological and Animal-free In Vitro Models: Advances in Cell and Tissue Culture 2020 Conference Proceedings. Alternatives to Laboratory Animals. 2021;49(3):93-110. doi:10.1177/02611929211025006
3. Ritskes-Hoitinga M, Wever K. Improving the conduct, reporting, and appraisal of animal research BMJ 2018; 360 :j4935 doi:10.1136/bmj.j4935
4. Zushin, P. H., Mukherjee, S., & Wu, J. C. (2023). FDA Modernization Act 2.0: transitioning beyond animal models with human cells, organoids, and AI/ML-based approaches. The Journal of clinical investigation, 133(21), e175824. https://doi.org/10.1172/JCI175824
5. Van Norman, G. Drugs, Devices, and the FDA: Part 1: An Overview of Approval Processes for Drugs. J Am Coll Cardiol Basic Trans Science. 2016 Apr, 1 (3) 170–179.
https://doi.org/10.1016/j.jacbts.2016.03.002
6. Hay, M., Thomas, D., Craighead, J. et al. Clinical development success rates for investigational drugs. Nat Biotechnol 32, 40–51 (2014). https://doi.org/10.1038/nbt.2786
7. J. Seok, H.S. et al., Genomic responses in mouse models poorly mimic human inflammatory diseases, Proc. Natl. Acad. Sci. U.S.A. 110 (9) 3507-3512, https://doi.org/10.1073/pnas.1222878110 (2013).
8. “Nucala (Mepolizumab) Approved by US FDA for Use in Adults with Chronic Obstructive Pulmonary Disease (COPD).” GSK, 22 May 2025, www.gsk.com/en-gb/media/press-releases/nucala-mepolizumab-approved-by-us-fda/.
9. “Pfizer Completes Acquisition of Arena Pharmaceuticals.” Pfizer, www.pfizer.com/news/press-release/press-release-detail/pfizer-completes-acquisition-arena-pharmaceuticals. Accessed 19 Aug. 2025.
10. Dougall, I.G. The use of human tissue in drug discovery. Cell Tissue Bank 12, 7–8 (2011). https://doi.org/10.1007/s10561-010-9201-9
11. Shen, J., Swift, B., Mamelok, R., Pine, S., Sinclair, J. and Attar, M. (2019), Design and Conduct Considerations for First-in-Human Trials. Clin Transl Sci, 12: 6-19. https://doi.org/10.1111/cts.12582
12. Kaizer, A. M., Belli, H. M., Ma, Z., Nicklawsky, A. G., Roberts, S. C., Wild, J., Wogu, A. F., Xiao, M., & Sabo, R. T. (2023). Recent innovations in adaptive trial designs: A review of design opportunities in translational research. Journal of clinical and translational science, 7(1), e125. https://doi.org/10.1017/cts.2023.537
13. “The Value Lens: Unlocking Future Success in Due Diligence.” KPMG, kpmg.com/xx/en/our-insights/value-creation/the-value-lens-unlocking-future-success-in-due-diligence.html. Accessed 19 Aug. 2025.
14. Totuka, Vaibhav. “Early-Stage vs Late-Stage Startups: Funding Focus.” Qubit, 23 June 2025, qubit.capital/blog/early-stage-vs-late-stage-startups-funding-focus#:~:text=Early-stage%20startups%20often%20focus%20on%20building%20foundational%20financial,operations%20and%20attracting%20larger%20investments%20to%20fuel%20growth.
15. van der Worp HB, Howells DW, Sena ES, Porritt MJ, Rewell S, O'Collins V, et al. (2010) Can Animal Models of Disease Reliably Inform Human Studies? PLoS Med 7(3): e1000245. https://doi.org/10.1371/journal.pmed.1000245
16. Leenaars, C. H. C., Kouwenaar, C., Stafleu, F. R., Bleich, A., Ritskes-Hoitinga, M., De Vries, R. B. M., & Meijboom, F. L. B. (2019). Animal to human translation: a systematic scoping review of reported concordance rates. Journal of translational medicine, 17(1), 223. https://doi.org/10.1186/s12967-019-1976-2
