Why Did We Go Fishing with Roche Venture Fund?

We were delighted to host Karl Handelsman, Partner at Roche Venture Fund in Vancouver last week. Over 100 participants came to his talk at BC Cancer Agency where he talked about “Winning Strategies for Biotech Startups”. Afterwards, we held a private dinner where he met several companies he had expressed interest in connecting with. The following day we went on a fishing trip with where Karl had an opportunity to connect with the biotech entrepreneurs one on one for several hours. Why did we invite Karl? We live in a geography where there is a dearth of Venture Capital funding. Most funds are located in San Francisco and Boston and unless our Canadian clients are visiting those cities on a regular basis, they would not have exposure to many VCs and family funds. We are spearheading an effort to create awareness on our innovators. If we can not all go down south, let’s bring up serious VCs to connect with our companies. Specifically, we liked Roche Venture Fund and Karl as they are interested in investing in companies that are developing early stage ground-breaking ideas. We have many of those in Canada. In addition, Karl in his previous life was involved in building a company that was sold to Amgen. We find VCs that were entrepreneurs in the past to be better investors or at least more understanding of the challenges of biotech entrepreneurship. Why did we go fishing with Karl? Investors invest in people with ideas, not just ideas. They need to meet you, feel comfortable with you and know that they can trust you. They need to...

The Serendipity of Drug Development

  Like every story, a drug development success story isn’t one where 2 + 2 = 4. We hear about the headlines and the end results once victory is achieved over the acquisition end line, however the backstory is seldom given the right amount of air time. This story is one with many twists and turns. It is in this story where the real lessons lie. The common ingredients in successful drug development are a confluence of timing, knowledge, experience, hard work, access to capital and sheer luck. But how these come together is the real story. This story takes on epic proportions in a biotech setting, which is not cushioned and protected like in large pharma. The news feeds give us the story line of the scientific creativity, the wonder of it all and the successes. What they usually don’t tell is what really creates this: the herculean amount of hard work, the painful process of raising the needed capital, the incredible patience and perseverance needed when the idealized projections don’t pan out, the countless sleepless nights, the huge sacrifices made personally by those leading the process and by their families who endure their absence and stress, and perhaps most illusive of all: the need for luck. For instance, many people know Millennium Pharmaceuticals (now part of Takeda Pharmaceutical Co.) as a biotech success story. Millennium is known by its flagship multiple myeloma drug, Velcade® ($2.6 B global sales in 2013). However few state that Velcade® did not come from Millennium’s research platform – a platform that used up hundreds of millions of investor dollars and never panned out....

How to Navigate a Period of Market Instability in Biotech Financing?

Returning from several Biotech Investment conferences in New York, it became clear to me that there is a consensus among biotechnology sector experts. Specifically, sector analysts agree the biotechnology sector is headed for a period of market instability and possible correction due to two key factors. First, we have witnessed an unprecedented period of growth. Biotechnology stocks were one of the hottest sectors in the U.S. stock market from late 2011 until this past summer. Since peaking in late July this year, the S&P 500 Biotech Index has fallen 23%. This fall is twice as much as the broader S&P 500 Index during that period. The Nasdaq Biotech Index, which includes more small-cap issues, has fallen even further: a drop of 27%. Typically, a bear market is measured when prices fall 20% or more over a period of several months. Second, the recent inflating of certain pharmaceutical prices has led to public outrage, mandated investigation and initiated the potential for government intervention. On September 17th, HIV activists wrote a blog and complained that Turing Pharmaceuticals raised the price of a 30-year old drug from $13.50 to by $750.00 per pill (5,000% increase). On September 20th New York Times ran a story on Turing. On September 21st, Hilary Clinton tweeted that she will be taking on “outrageous” [pharmaceutical] pricing. As a result of a single tweet, a four year period of the S&P and Nasdaq biotech indexes rising as much as 300% came to an abrupt end. It’s hard to believe, but this is how bubbles often begin to burst. It’s not always with some ground-breaking change but rather a single...