What Investors Should Look for in Animal Testing Alternatives

Investors assessing alternatives to animal testing should look beyond the price of an individual test to whether its results help guide drug development, according to J&P Medi Partners. The firm points to OrganoPlus, a portfolio company developing human-based nonclinical validation platforms using organoids and organ-on-a-chip technology.

In drug development, identifying candidates is only part of the challenge; selecting which ones should advance to the next stage is also important. Animal models have supported that assessment, but differences between species can limit how well they explain human drug responses. NAMs are approaches intended to address such limitations, including organoids, organ-on-a-chip systems and computer-based prediction.

Organoids are three-dimensional structures in which cells organize themselves to reproduce some characteristics of an organ. Organ-on-a-chip systems control microscale fluid flows and cell-culture conditions to reproduce some tissue functions. The technologies are used to study matters such as drug absorption and tumor and immune-cell responses, with the aim of producing data more relevant to humans.

The value to customers depends on whether additional information justifies the cost and whether a method can fit into existing evaluation procedures. Early identification of candidate toxicity risks could reduce unnecessary later development, making the time and resources saved relevant alongside test costs. But if a new method provides information similar to existing tests, its novelty alone may not persuade customers to spend more.

Regulators are also setting out conditions for NAMs use. In a draft guideline in March 2026, the FDA identified intended use, relevance to human biology, reliability and reproducibility as key validation criteria. The approach does not amount to blanket approval of individual platforms; it describes how evidence for regulatory submissions can be established.

For early-stage companies, that points to finding specific customer needs before aiming to replace all animal testing. They could first serve pharmaceutical companies’ internal research needs, such as candidate comparisons or mechanism-of-action analysis, then build validation evidence toward regulatory submission use. Separating areas that can generate revenue now from those requiring more validation can also help companies assess research spending and the timing of further investment.

Evaluation criteria vary with the business model. Selling equipment and consumables differs from providing testing services or analysis software; some businesses depend on use after installation, while others depend on project profitability and repeat use. Investors need to understand who buys what and how those transactions could expand, beyond a broad claim that the technology sector is promising.

OrganoPlus targets human-based validation for development needs

Led by CEO Shin Jae-young, OrganoPlus is developing a human-based nonclinical validation platform using organoids and organ-on-a-chip systems. Its core business is providing experiments and data that pharmaceutical and biotech companies need to assess candidate efficacy, absorption and immune responses.

VILLIORGAN™ models intestinal villi and the mucosal barrier to assess drug absorption and permeability, as well as interactions with gut microbes. CANORGAN™ recreates the tumor microenvironment to examine not only the efficacy of cancer drug candidates but also immune-cell infiltration and responses. The company is also expanding into MAXORGAN™, which combines different organ models according to research needs. Its approach is to culture each model under suitable conditions, connect them and analyze interactions between organs.

OrganoPlus is refining its platforms to configure evaluation items around customers’ development objectives and make results useful for comparing candidates and deciding whether they should advance. The aim is to turn its technology for modeling the intestine or tumors into a service that supplies information developers need.

Its business model is organized around customers’ development stages, from initial screening to validation using multiple indicators and longer-term validation contracts. In cancer-candidate efficacy assessment and intestinal-model refinement, the company has secured paid service contracts, linking its work to development projects for which customers are paying.

Building a repeatable validation service

J&P Medi Partners invested in OrganoPlus through its Super Gap OI Venture Investment Association and followed up with a TIPS recommendation. OrganoPlus’s selection for TIPS gave it a basis to pursue technology development using private investment alongside research and development support.

In its investment review, J&P Medi Partners focused on the company’s effort to secure specific validation demand while building an operating system to handle that work reliably. If every customer experiment has to be designed from scratch, rising orders can increase staffing and cost burdens. Standardized common processes and evaluation procedures, with only the necessary parts tailored for each customer, can help manage delivery times and costs as the business grows. The firm said it viewed OrganoPlus’s parallel work on disease-specific models and operational standardization positively.

Turning experimental results into data assets

OrganoPlus’s proposed next step is a Human Validation Data Factory: a human-based validation data production system combining organ-on-a-chip technology with standard operating procedures, quality control, experiment automation and biosensing to measure biological signals. Rather than stopping at delivering individual project results to customers, the company aims to manage experimental conditions and evaluation items in a consistent structure and build data that can be compared and analyzed over time.

The company plans to link this data with real clinical data over the longer term and expand into AI analysis and data licensing. It aims to confirm customer demand through validation services while building experience that can underpin later analytics work. That path would require clear rights governing the use of customer data and validation of how closely experimental results correspond to actual clinical responses.

Investors should also watch what happens after an initial contract: whether the same customer entrusts the company with assessing another candidate and whether accumulated data is used in new development projects. Repeat contract rates, data reproducibility and the degree of linkage to patient-derived data and clinical outcomes could serve as indicators of that growth.

The value of NAMs companies becomes more concrete when their methods perform a needed role in pharmaceutical research and development. OrganoPlus is seeking to broaden from validation services into data-based business using experience accumulated through those services. Its future growth depends on establishing a basis for expansion through customer validation and technology development.

Read the original (Korean)