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Sofinnova Partners Stays Optimistic on Biotech's Future · Vanguards of Healthcare by Bloomberg Intelligence

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Speaker 1: Hello, everybody, Welcome to another episode of Bloomberg Intelligence Vanguards
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Speaker 1: of a Healthcare podcast. It is the last one of
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Speaker 1: the year for me, but it is with somebody whom
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Speaker 1: I've known for a long long time, and it's a
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Speaker 1: real pleasure to get back together, even if it's virtual
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Speaker 1: at the minute. And these podcasters, you know, we speak
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Speaker 1: with the leaders at the forefront of change in the
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Speaker 1: healthcare industry, and no one is closer to those changes
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Speaker 1: than vcs, and no one's closer to those changes than
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Speaker 1: vcs like Antoine that I've known for years. So my
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Speaker 1: name is San Frazelli, and I'm a former biotech analyst
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Speaker 1: at Bloomberg Intelligence, which is the in house research arm
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Speaker 1: of Bloomberg. Now I'm thrilled to welcome Ontoine Papianique, a
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Speaker 1: managing partner at Sofenova Partners. Plenty of stuff to talk about.
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Speaker 1: There's seven funds that the company that the group runs,
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Speaker 1: which are many more than the first days that I
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Speaker 1: remember on to one from I think I think probably
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Speaker 1: Sophienova Capital was the first one, I guess. Sofienova is
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Speaker 1: obviously a leading European life sciences venture capital firm founded
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Speaker 1: in nineteen seventy two, so it's slightly younger than me.
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Speaker 1: Just in twenty twenty five the group raised one and
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Speaker 1: a half billion euros, so combined with the group that
1:34
Speaker 1: I spoke with a few weeks ago, that was four
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Speaker 1: Beyond this are these two firms, along with EQT friends
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Speaker 1: there and quite a few other vcs, are at the
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Speaker 1: forefront of leading investments into biotech and they are a
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Speaker 1: European based healthcare VC but obviously not just Europe. So
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Speaker 1: almost half of that money that was raised went to
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Speaker 1: the Sofinova Capital six eleven funds sorry eleven wow, over
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Speaker 1: five hundred companies back since nineteen seventy seventy two, currently
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Speaker 1: over one hundred in the portfolio companies in the list
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Speaker 1: SO and a total of about four billion euros under management.
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Speaker 1: So things have clearly gone in the right direction and
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Speaker 1: very well for Onto one. Welcome onto one. It's really
2:15
Speaker 1: nice to have you with us.
2:16
Speaker 2: Thank you some it's a pleasure to see you.
2:18
Speaker 1: Did you want to add a little bit.
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Speaker 2: Well, yeah, just to remember indeed that we've met twenty
2:23
Speaker 2: five or so years ago and at the time I
2:26
Speaker 2: joined this from twenty eight years ago, and at the
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Speaker 2: time we had one strategy that was the capital strategy
2:32
Speaker 2: that was investig out of its fund two when I
2:35
Speaker 2: joined in ninety seven, which was a forty seven million
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Speaker 2: euro fund. And I have to say we did, in
2:40
Speaker 2: hindsight miracles with very small amounts of money. But we're
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Speaker 2: also very very happy that we now have a lot
2:45
Speaker 2: more money. So from this forty seven million euro fund,
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Speaker 2: and we had a fund one that was thirty eight
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Speaker 2: million euros, so less than one hundred million basically to
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Speaker 2: do what we do. And indeed today we've grown in
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Speaker 2: motoral ways. But just Capital eleven being at six hundred
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Speaker 2: and fifty million euro can see how much more we
3:01
Speaker 2: can do with a lot more money. I think you
3:04
Speaker 2: know things have changed in biotech. We need more money
3:08
Speaker 2: to get to where in one to go, particularly if
3:10
Speaker 2: you want to reach your ultimate goal. And super happy
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Speaker 2: to be in this position today despite the environment. Sure
3:15
Speaker 2: we'll talk about the environment, but despite this, you know,
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Speaker 2: I'm the optimist and I think you know we've gone
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Speaker 2: a long way in Europe and right that way.
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Speaker 1: Yeah, I mean, you can't be you can't not be
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Speaker 1: an optimist when you work in biotech, right because it's
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Speaker 1: feast and Famiine at times. And also you need that,
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Speaker 1: I think in order to see through the risks and
3:38
Speaker 1: look at the potential. And of course you do capital
3:40
Speaker 1: management in a sensible way to try and get the
3:42
Speaker 1: risks taken care of as much as possible. But that
3:45
Speaker 1: is that is what biotech is. And I have to
3:47
Speaker 1: say that I think Antoine is one of the most
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Speaker 1: optimistic people that I remember sitting on panels with, et cetera.
3:54
Speaker 1: So it always was a pleasure to have those conversations.
3:57
Speaker 1: You always agree, but I think a lot of it
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Speaker 1: was more for making the panels, making the panels more interesting. Now,
4:04
Speaker 1: so we're no solfing over sit in the venture community.
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Speaker 1: In terms of approach it, you know what what is
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Speaker 1: what is special, if anything about the group And in
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Speaker 1: terms of the way you you you you look at things.
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Speaker 2: Yeah, So our moto is that we invest in in
4:21
Speaker 2: people and science, and of course people often count a
4:26
Speaker 2: lot in this equation, but I would say most investors
4:29
Speaker 2: would say the same people in science. I think the
4:32
Speaker 2: way we've grown is is that we have tried to
4:36
Speaker 2: capture a lot of the different elements of the ecosystem,
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Speaker 2: meaning we have strategies, we have indeed seven different strategies
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Speaker 2: and multiple funds within those strategies from super early acceleration incubation. Here,
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Speaker 2: my partners in those strategies, both in biotech and medtech
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Speaker 2: are in fact entrepreneurs. They take those projects off academia
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Speaker 2: in general and develop the companies them stulfs. That's the
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Speaker 2: one thing that I think few people do in Europe.
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Speaker 2: In the US you have a few famous funds who
5:08
Speaker 2: tend to do that, but in Europe there's not that
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Speaker 2: many people who actually take this level of risk with
5:12
Speaker 2: the team that you know, the management is our partners
5:14
Speaker 2: who take this. So that's one element. Those are in
5:17
Speaker 2: general the you know, smaller, smaller funds because you know,
5:20
Speaker 2: they do really needlework, if you see what I mean.
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Speaker 2: They create things from scratch with technologies and then bring
5:27
Speaker 2: them to the next step two. So that's one strategy
5:29
Speaker 2: on the on the earlier, earlier stage of the spectrum
5:32
Speaker 2: too through the capital funds. Of course that you mentioned
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Speaker 2: that these the traditional in some way early stage funds
5:41
Speaker 2: to the latest stages, and we set up a late
5:44
Speaker 2: stage growth or we also call crossover fund investing in
5:48
Speaker 2: late stage clinical to even public investing. So I think
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Speaker 2: The way we portray ourselves is a platform where if
5:54
Speaker 2: you're an entrepreneur, if you are early entrepreneurs, you know
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Speaker 2: you have someone to speak to that wants to listen
6:00
Speaker 2: to something that may be prit clinical to If you
6:04
Speaker 2: are a company that's already raised substantial venture money and
6:08
Speaker 2: you have dearies, your product is not eleclinic, but you
6:10
Speaker 2: need to run the phase two B a phase three.
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Speaker 2: You need to bring this product to market. You have
6:14
Speaker 2: someone to speak to, a Sophiova. So few firms have
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Speaker 2: this breadth of competence. We took the decision not to
6:24
Speaker 2: have one part of money like four billion euros you
6:27
Speaker 2: mentioned in a UM with everyone just sort of tapping
6:30
Speaker 2: in that part, in order to do early stage, middle stage,
6:34
Speaker 2: data stage. We think that it's it was more appropriate
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Speaker 2: to hire people that really are specialists in all the
6:42
Speaker 2: different stages and beside the stage. It's also something that
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Speaker 2: is important to mention. We do biotech, and I would
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Speaker 2: say it's it's the majority of what we do. Majority
6:51
Speaker 2: means more than fifty percent. In fact, it's boiled probably
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Speaker 2: about sixty percent of what we do. We do medtech,
6:56
Speaker 2: and then we do digital medicine, and we do what
6:59
Speaker 2: we call it industrial botech. That's bootech in particular for
7:03
Speaker 2: developing products using a biotechnology outside of healthcare. So if
7:07
Speaker 2: you look at this, you know we have you mentioned
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Speaker 2: over one hundred companies I think it's one hundred and
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Speaker 2: ten at today's count, and in the sixties are pure
7:17
Speaker 2: bootech biopharma addressing you know, majors of drugs addressing major
7:22
Speaker 2: unmet clinical need. We have about twenty five twenty percent
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Speaker 2: of medical device from early incubation to middle stage to
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Speaker 2: commercial state. And then we have a growing digital medicine.
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Speaker 2: And I'm sure you're going to ask me the AI
7:38
Speaker 2: question at some point, and then I'll tell you that
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Speaker 2: this is also how we've I think got I think ahead,
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Speaker 2: you know, thinking about how to use AI in healthcare
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Speaker 2: in order to to transform our industry.
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Speaker 1: Right, So when I look at these sotaro a capital
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Speaker 1: is is for me at least easy to understand know
8:00
Speaker 1: what the idea is. Biotech companies mostly right, medical devices,
8:04
Speaker 1: I get that too. Crossover yep, I get that. We
8:07
Speaker 1: can talk about that in a minute, whether how the
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Speaker 1: environment is for that particular area industrial biotech, I think
8:13
Speaker 1: I get that. So we're thinking maybe as you said
8:16
Speaker 1: the application of biotechnology outside of developing medicines. So the
8:21
Speaker 1: name that comes to my mind is nova zymes, which
8:23
Speaker 1: is a that kind of thing. Am I right? I
8:26
Speaker 1: mean you can stop me time and say, Sam, you're wrong.
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Speaker 2: No, No, it's totally exactly that.
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Speaker 1: And digital medicine is the one that I'm interested in.
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Speaker 1: Why you separated that out. I'm going to make a
8:36
Speaker 1: guess and you tell me if I'm stupid or not.
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Speaker 1: I'm assuming it's because digital medicine isn't just about application
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Speaker 1: of AI to drug development, because that would fit in biotech.
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Speaker 1: I'm assuming this is because you also have hospital record keeping,
8:51
Speaker 1: you have patient management during clinical trials and multiply. Is
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Speaker 1: that right? Is that why it fits better in this
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Speaker 1: bucket together as opposed.
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Speaker 2: To You're absolutely right in fact, so we see digital medicine,
9:07
Speaker 2: we define it in those two big petars. One would
9:09
Speaker 2: be I mean, another term you could use is tech bio.
9:12
Speaker 2: So those other picks and troubles the technologies that will
9:16
Speaker 2: help accelerate drug discovery, drug development. And those are not products,
9:21
Speaker 2: but I mean they are not clinical products you those
9:24
Speaker 2: are products you will use in order to develop, you know,
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Speaker 2: better drugs. Faster drugs, you know, innovative drugs that you
9:31
Speaker 2: could not develop, But the clients of those companies are
9:36
Speaker 2: out of biotech and the farmer company. So these are
9:40
Speaker 2: from a business model standpoint. More more tech companies that
9:44
Speaker 2: you know will generate to turnover an ar ar r
9:47
Speaker 2: as they say, so they will generate business in order
9:51
Speaker 2: to help those companies developing products. So that's one peta
9:55
Speaker 2: of tech bio and the other one, which is often
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Speaker 2: referred as health tech, is really all these technologies that
10:02
Speaker 2: connect the patient, the physician, the hospital. So how do
10:07
Speaker 2: we improve on this on where most of the costs are,
10:12
Speaker 2: which is you know, in that setting, you know the
10:15
Speaker 2: patient and is going to visit the physician in a
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Speaker 2: hospital is where eighty percent of the cost of our
10:21
Speaker 2: healthcare systems are. And I think there's a lot that
10:24
Speaker 2: to show medicine. You know, of course the user AI
10:27
Speaker 2: can do to improve that. So those are the what
10:29
Speaker 2: we're focusing on, and we thought you need to have
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Speaker 2: a dedicated team understand this. The co investors, by the way,
10:36
Speaker 2: are very different. There are more tech co investors rather
10:40
Speaker 2: than just the run of the mill people who know
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Speaker 2: the about developing drugs.
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Speaker 1: Right so I think we're going to talk about this.
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Speaker 1: I'm going to bring this up now. As you saw
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Speaker 1: in my list of questions in our century is a
10:51
Speaker 1: bit further down, but I think since we're on the topic,
10:53
Speaker 1: we'll talk about it now. And also the biotech. These
10:55
Speaker 1: are the two areas I know most and best medical
10:58
Speaker 1: device is really not my space at all, So let's
11:02
Speaker 1: just talk about this AI topic here. We've just conducted.
11:05
Speaker 1: It took us a long time to get this organized.
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Speaker 1: A six hundred plus c suite survey for AI, which
11:13
Speaker 1: is published twenty ten or twelve questions general across the
11:17
Speaker 1: six hundred folks and the companies from about one thousand
11:21
Speaker 1: individuals upwards employees, and then we went and segmented the
11:26
Speaker 1: companies into ten buckets. One of the wich was pharmaceuticals.
11:29
Speaker 1: So we have about fifty respondents and we will come
11:32
Speaker 1: back to that. I'm going to do a webinar of
11:35
Speaker 1: our own with my colleague with our findings from what
11:37
Speaker 1: they said about the impact of AI they are looking
11:40
Speaker 1: at within their companies. But one of the key themes
11:45
Speaker 1: that seems to keep coming up is that the US
11:48
Speaker 1: seems to have pretty much let's put China outside now
11:51
Speaker 1: because they have a different strategy they're pursuing within video,
11:55
Speaker 1: with the chat GPT, with open Ai, with Anthropic, et cetera.
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Speaker 1: They seem to have sewn up the world of AI
12:02
Speaker 1: models except for one company which doesn't come up enough
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Speaker 1: in my view, which is Mistral. There is a model
12:08
Speaker 1: that's based out of France. That is I think a
12:11
Speaker 1: lot of people are using it and having very positive
12:14
Speaker 1: reaction to it, except that all the noise and news
12:16
Speaker 1: we hear is about open AI and Anthropic and all
12:20
Speaker 1: these companies and Gemini, et cetera. So talk to this
12:22
Speaker 1: point to me, please, When you look at your portfolio,
12:26
Speaker 1: do you find France specifically a strong candidate for generating
12:31
Speaker 1: these new tech ideas? Do you find Europe particularly positive?
12:35
Speaker 1: Are their pockets where you go the hey, we're doing
12:37
Speaker 1: really well here and it's under the radar, which is
12:39
Speaker 1: great for me to hear. Or are you ending up
12:41
Speaker 1: doing eighty percent of your investments in the US now.
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Speaker 2: Well, it's a great question, and several thoughts come to
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Speaker 2: my mind. First of all, you know, chat GPT has
12:51
Speaker 2: been just an amazing chattypt and all the the llms
12:56
Speaker 2: have opened up. You know, people's brand to what a
13:00
Speaker 2: I do. But my take, and you know, I'm not
13:04
Speaker 2: just the AI statutist in the world for sure, But
13:07
Speaker 2: what I can see just looking at the discussion of
13:11
Speaker 2: the farmer industry, for instance, is that you know these
13:14
Speaker 2: horizontal models the chart GPTs including the mistrials of this world.
13:19
Speaker 2: I mean, by definition that's super good at this horizontal layer.
13:23
Speaker 2: What more and more people understand per industry, you need
13:27
Speaker 2: to dig to dig deep into the knowledge that you
13:32
Speaker 2: have in one industry. To be able to be successful
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Speaker 2: in tech bio using AI, you need to have an
13:39
Speaker 2: understanding of healthcare and have models that ultimately are dedicated
13:44
Speaker 2: to this space, leveraging the data in our space. And
13:48
Speaker 2: I will argue that there's no space like drug discovery,
13:52
Speaker 2: drug development where data is more important, you know, than
13:57
Speaker 2: other industries. If you think about l lms that are
14:00
Speaker 2: based on you know, the twenty six letters of the alphabet,
14:03
Speaker 2: think about the complexity of biology from you know, DNA
14:06
Speaker 2: to RNA to proteins to ultimately you know, all the
14:10
Speaker 2: connections between self. This is just data, like you know,
14:14
Speaker 2: it's it's paradise for AI, but it needs to be
14:17
Speaker 2: developed specifically. I'll tell you. For instance, we have two
14:20
Speaker 2: companies in our portfolio that are the next generation of
14:24
Speaker 2: foundational model for biology. I can mention one in France
14:30
Speaker 2: which is called Bioptimus, that is trying to decipher to
14:34
Speaker 2: do the same as you know the l l ms,
14:37
Speaker 2: but taking biology as the as the building blocks. And
14:41
Speaker 2: then we have a company in the UK Collected Labs
14:45
Speaker 2: that just announced I think yesterday, they're they're latent X
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Speaker 2: two model, which really looks like, could you using AI
14:53
Speaker 2: develop tomorrow's next generation proteins which and develop antibodies that
15:00
Speaker 2: for sure you know don't have immunogenicity from day one
15:04
Speaker 2: if you think that leveraging the knowledge of AI, but
15:08
Speaker 2: in using the data in our own sector, and this
15:13
Speaker 2: will require I mean chat GPT, I mean open AI
15:16
Speaker 2: and the others and Tropic can do a lot because
15:19
Speaker 2: they have hundreds of billions at their disposal, but they
15:23
Speaker 2: lacked the knowledge of our industry. Of course they could buy,
15:25
Speaker 2: but I predict that in fact they were ultimately buy
15:30
Speaker 2: potentially or partner with those who have developed over the
15:34
Speaker 2: next you know, three four five years. These technology is
15:37
Speaker 2: dedicated to a few Let me just say one and
15:41
Speaker 2: take another another cuta list which is our own industry,
15:45
Speaker 2: the venture industry, the life science venture industry. It happens
15:50
Speaker 2: that six years ago, six or seven years ago, pre
15:53
Speaker 2: chat GPT, I had no idea of what was going
15:55
Speaker 2: on there. We decided to become you know, data savvy
16:01
Speaker 2: maybe a class, and then use you mentioned the fact
16:04
Speaker 2: that we were set at nineteen seventy two, So use
16:07
Speaker 2: the fact that we had all these datas over fifty years,
16:10
Speaker 2: annotated information about deals that we saw, that we that
16:15
Speaker 2: we studied, where we have consultants from the FDA, from
16:18
Speaker 2: from rembursement, from whatever, C and C. And then use
16:22
Speaker 2: that and connect those dots with all the public dots
16:25
Speaker 2: that are available out there about you know, mechanisms of
16:29
Speaker 2: actions and clinical trials about patent So we've done that
16:33
Speaker 2: and that's that was six years ago thanks to chat GPT.
16:36
Speaker 2: Now of course this is now powered. So she by
16:38
Speaker 2: the way, she's called Sofia a system soft ea as
16:41
Speaker 2: you know in French, you know, eyah is like a
16:43
Speaker 2: that's the play on work. But Sofia is also you know,
16:46
Speaker 2: it's also.
16:47
Speaker 1: I have to say at good you know, Sophie no AI.
16:52
Speaker 2: And marketing guy, what can I say? You know, this
16:54
Speaker 2: is what I do. So so. But but Sofia is
16:58
Speaker 2: also you know, wisdom and Greek. And happens that a
17:02
Speaker 2: person who's been spearheading that project at a GID who
17:06
Speaker 2: is Greek, and she she named Sofia. But besides this anecdotes,
17:11
Speaker 2: I could not think how we operated in the past,
17:15
Speaker 2: meaning that because I'm the old guy here, I remember, oh, yeah,
17:18
Speaker 2: we saw a company like this fifteen years ago, and
17:20
Speaker 2: and you know, I know this guy from you know
17:22
Speaker 2: this company, and but you know, this is impossible. There's
17:27
Speaker 2: so many dots you need to connect. Sofia today, since
17:30
Speaker 2: we started speaking, has read all the papers, all the
17:33
Speaker 2: period papers that there is to read. Nobody can do that.
17:38
Speaker 2: No humans, armies of humans cannot do that. Sofia can.
17:43
Speaker 2: In fact, Sofia does so. Now when we you know,
17:46
Speaker 2: we have like over three thousand deals that come through
17:49
Speaker 2: our shop a year, it's it possible. How do you
17:51
Speaker 2: find the needle in the haystack? How do you, you know,
17:56
Speaker 2: see those low level noise that will allow you to
17:59
Speaker 2: pick that incredible company from Norway or from you know,
18:04
Speaker 2: eastern Europe somewhere that you have no idea.
18:07
Speaker 1: You know, And how that is in this seven years
18:10
Speaker 1: seven years, seven years, and we started based on an LM.
18:13
Speaker 2: Of course, since Chad GPT we're using an NLM. The
18:18
Speaker 2: best version of chat GPT four or whatever is the next.
18:21
Speaker 2: But this is what I was trying to say earlier,
18:24
Speaker 2: is that the power, the power is there for the
18:27
Speaker 2: l ELNs. That the importance is not in a way
18:32
Speaker 2: the LN. The importance is how do you connect the
18:35
Speaker 2: dots using information that you have, that we have that
18:39
Speaker 2: nobody else has, that enriches this information so that you
18:44
Speaker 2: can find the diamonds in the rough. That is how
18:46
Speaker 2: you do it. That's why I predict that the LM
18:49
Speaker 2: will be the commodity going forward, and the value will
18:54
Speaker 2: be in those who leverage the commodity in order to
18:57
Speaker 2: use their special secret source that nobody else has to
19:03
Speaker 2: get to a results, whether it's latent labs, leveraging you know,
19:06
Speaker 2: dedicated data or I mentioned Valptimus, but there are other
19:10
Speaker 2: companies in the portfolio. Back to the question you were asking,
19:13
Speaker 2: is France a good place because of mistral and what
19:16
Speaker 2: is you up a good place? Well, it happens that yeah,
19:19
Speaker 2: well France is a very good place because the engineers
19:22
Speaker 2: are super well trying, but it's not the only place
19:25
Speaker 2: that how do you find those with your you know, hands,
19:29
Speaker 2: it's impossible. With your eyes, it's impossible. You need to
19:31
Speaker 2: be to leverage. So, you know, we need to be coherent.
19:35
Speaker 2: If we're thinking that digital medicine is super important, we
19:38
Speaker 2: need to also apply it to ourselves. We need to
19:41
Speaker 2: be able to say, well, you know, we're going to
19:45
Speaker 2: change the way we've been there for fifty years. But
19:47
Speaker 2: if you're sitting on your laurels, you know we're going
19:50
Speaker 2: to be we're going to be taken over by others.
19:53
Speaker 2: So that's supper important in how we operate.
19:56
Speaker 1: So you've got my mind racing here and I've got
19:59
Speaker 1: so many questions we can't even finish our session if
20:02
Speaker 1: we just stayed on this. But let me ask you
20:03
Speaker 1: a question. In the seven years the diamond in the rough,
20:06
Speaker 1: there are a lot of situations where somebody comes with
20:09
Speaker 1: an idea that may be a bit too early to
20:11
Speaker 1: be meaningful, or biology changes five years down the road,
20:15
Speaker 1: doesn't change gets more detailed. Have you had this situation
20:19
Speaker 1: yet where you've gone back and said, oh, you know
20:21
Speaker 1: that company, we said no two five years ago, that
20:23
Speaker 1: science actually it makes sense. Now has that happened yet
20:27
Speaker 1: or do you expect it to happen?
20:30
Speaker 2: It has We haven't gone to the full circle, meaning
20:34
Speaker 2: invested in that company that we said no because of
20:37
Speaker 2: our relooking on data. But it will happen. I can
20:41
Speaker 2: bet that it will happen. And the reason it will because,
20:45
Speaker 2: as I said, this system that we're using Sofia is
20:47
Speaker 2: connected to Affinity, to every deal that we've ever registered
20:51
Speaker 2: in Affinity, and I think we have thirty something thirty
20:55
Speaker 2: five thousand deals that we've seen. So any link to this.
20:59
Speaker 2: So if you if you're coming in, you're a new
21:01
Speaker 2: b you're coming in, you have a great idea. You
21:03
Speaker 2: just find the patent. It needs to be published for
21:06
Speaker 2: us to see it about this new mechanism. Well, Sophia
21:12
Speaker 2: will help us decipher any paper, any clinical trial, any
21:17
Speaker 2: you know, any key opinion leaders in the back end
21:20
Speaker 2: of nowhere that is the expert in this. And you
21:24
Speaker 2: know I was visiting an LP of ours and I
21:26
Speaker 2: will tell you that this system is great. I think
21:29
Speaker 2: one of the reasons we've managed to raise one point
21:32
Speaker 2: five billion in the last twelve months is also because
21:34
Speaker 2: people think, okay, they're living with their time, and they are.
21:37
Speaker 2: Whether you can today say that we are generating big
21:40
Speaker 2: you know, larger returns thanks to that, I don't think
21:42
Speaker 2: we can say this, but we are living with our time.
21:45
Speaker 2: And I was I was visiting a German lp of
21:49
Speaker 2: ours and real time and ask him where where where
21:53
Speaker 2: are you from? You know, in Germany? Told me the
21:55
Speaker 2: town which I had never heard of in Germany. And
21:57
Speaker 2: I looked at in that town, who are the key
22:00
Speaker 2: opinion leaders that are number one in there in the world.
22:04
Speaker 2: And it happens that there's one guy in that town
22:07
Speaker 2: who happens to be the number one leader in that
22:12
Speaker 2: particular in a in a super relevant indication. And that's
22:17
Speaker 2: the most amazing thing. And I think that's also very
22:21
Speaker 2: relevant for Europe because if you compare US to Europe,
22:25
Speaker 2: one of the major difference is that, you know, in
22:27
Speaker 2: the US, if you think biotech, you think in Boston,
22:30
Speaker 2: San Francisco, maybe San Diego, a few other places, but
22:35
Speaker 2: that's it, right Europe because of what Europe is, you know,
22:39
Speaker 2: there are people everywhere from you know, Norway to Stay
22:43
Speaker 2: to Germany to everywhere. And that's what this actually allows
22:48
Speaker 2: us to, you know, shed some light like the neon
22:50
Speaker 2: light on the whole of what we have in Europe,
22:55
Speaker 2: which I think is the only way to access it.
22:57
Speaker 1: I think you're the only person who's put a positive
22:59
Speaker 1: spin on that, because most people put the negative spin
23:01
Speaker 1: on it, saying you want to be in biotech, you've
23:04
Speaker 1: got to be in the Boston cluster or the San
23:07
Speaker 1: Francisco cluster because everything is there, and everybody is there,
23:10
Speaker 1: are all the experiences there. I mean, that makes some sense.
23:13
Speaker 1: But I think you're the first person who's actually put
23:15
Speaker 1: a positive spin on the fact that Europe is, for
23:18
Speaker 1: want of a better phrase, fragmented because it's different countries essentially,
23:22
Speaker 1: despite the European Union, is actually an element of it
23:26
Speaker 1: that's positive. But you need to be able to leverage that,
23:28
Speaker 1: which is what I think you're talking about.
23:29
Speaker 2: Yes, And I think that AI helps you leverage that.
23:33
Speaker 2: You know when you have I mean, if you're a
23:35
Speaker 2: key opinion leader in aubesity And I'm just saying this
23:38
Speaker 2: because that's an obvious to everybody key areas. Everyone knows
23:41
Speaker 2: who the key opinion leaders are, but who really knows
23:45
Speaker 2: who are what we call rising stars in it? Because
23:48
Speaker 2: we classified all the scientists in the world in key
23:52
Speaker 2: opinion leaders sort of stars and rising stars the people
23:56
Speaker 2: you want to speak to other rising stars. Of course
23:59
Speaker 2: the key leaders are important, but everyone knows them. It's
24:02
Speaker 2: like it's just you know, levels the playing field you want.
24:06
Speaker 2: If you want an edge, you need to speak to
24:09
Speaker 2: the person this young scientist who just published in Nature
24:13
Speaker 2: Science and Sell last week something that nobody has seen yet.
24:17
Speaker 2: And that's that's the one that we can pick up
24:19
Speaker 2: that you know you cannot do just they by relationship
24:22
Speaker 2: being Boston or anywhere.
24:24
Speaker 1: Yeah, we've talked for half an hour. It feels like
24:27
Speaker 1: five minutes, but that's normal. I mean, I remember this sensation.
24:32
Speaker 1: Let's just talk at finish on this by asking you
24:35
Speaker 1: where have you been surprised by the application of AI
24:40
Speaker 1: in the world of drug development medicine? And where have
24:45
Speaker 1: you been disappointed? Just a couple if I'm just putting
24:48
Speaker 1: on the spot now because that wasn't one of my questions.
24:51
Speaker 2: But I think I think I think we need to
24:55
Speaker 2: be humble, uh in saying we don't know where the
25:00
Speaker 2: most efficient use of it for drug discovery truct development.
25:04
Speaker 2: I don't know, and I'm sticking to FARMA all day long,
25:08
Speaker 2: and I don't think they know, but they are they
25:11
Speaker 2: They are absolutely certain that this is going to be transformational.
25:15
Speaker 2: If you think about the number of farmer companies who say,
25:18
Speaker 2: you know, we're going to be the ar driven you know,
25:21
Speaker 2: farmer company, I can't really tell you yet. I don't
25:24
Speaker 2: think that the story is already written on what works
25:28
Speaker 2: and what doesn't. I don't think so, which is why,
25:30
Speaker 2: By the way, you know, this is a this is
25:32
Speaker 2: a new strategy for us, and it needed some dedicated
25:35
Speaker 2: people because we are you know, hunting is the word
25:40
Speaker 2: you'd say for for strategy. You are trying things I
25:43
Speaker 2: mentioned about Layton claps. I think it's fabulous, but you know,
25:47
Speaker 2: ultimately proof will be in the pudding. Right, So if
25:50
Speaker 2: the farmer says, my god, I want to work with
25:52
Speaker 2: Layton Labs and generate you know, my next ten new
25:57
Speaker 2: drugs related and that's that would be quoesome. But and
26:00
Speaker 2: I'm sure this, you know, I hope it's going to happen.
26:02
Speaker 2: That's part of the strategy, but it's going to take
26:05
Speaker 2: a little while. So I think anyone who tells you
26:06
Speaker 2: what works and what doesn't, I think it's just looking
26:09
Speaker 2: at a picture. Maybe I don't think that the film
26:11
Speaker 2: has been has been shot yet.
26:13
Speaker 1: Let's talk about the current sentiment and mark and sector views,
26:20
Speaker 1: et cetera. So what is your alsophinovas overarching industry thesis?
26:25
Speaker 1: At the moment there is turmoil. One day we see
26:28
Speaker 1: FDA doing strange things when it comes to we are
26:32
Speaker 1: going to put a black box on vaccines. We're not
26:35
Speaker 1: going to put a black box on vaccines with where
26:37
Speaker 1: the data hasn't been shared. The next day I see
26:40
Speaker 1: something that really excites me. They give a priority voucher
26:43
Speaker 1: to Johnson and Johnson's Majestic three trial, which showed an
26:49
Speaker 1: enormous overall survival benefit over already a great success with
26:54
Speaker 1: carties in multiple maloma. And the next day or two
26:57
Speaker 1: days later they proactive you give them now that something
27:01
Speaker 1: hasn't happened before. Let's see what the value of this is.
27:04
Speaker 1: Are we going to get the product approved in two
27:06
Speaker 1: or three months much faster or not? We'll see. But
27:09
Speaker 1: so you see, and I'm constantly buffeted by the positive
27:13
Speaker 1: and negative and up and down. How do you feel
27:17
Speaker 1: and where do you think? How do you think twenty
27:19
Speaker 1: twenty six will settle down? And whatever you're comfortable telling.
27:22
Speaker 2: Me well, look what you described not just you know
27:26
Speaker 2: what's going on a DDA, you know, on the tariffs,
27:28
Speaker 2: and a meth van and you know, bio secure and
27:32
Speaker 2: because I'm sure we'll go the dlaus, you know, and
27:35
Speaker 2: the question on China. All of this in a big
27:38
Speaker 2: realm of things. And you and I have been you know,
27:40
Speaker 2: in this business for so long. I would refer them
27:44
Speaker 2: as noise. They are annoying noise. And when you have noise,
27:46
Speaker 2: you know, I've got tinatis, you know, and when I
27:49
Speaker 2: think about my tinatis, it's annoying, but you know, it's
27:53
Speaker 2: it's noise, right. So, and this is why you need
27:57
Speaker 2: to go back to to the fundamentals. And metals are amazing.
28:01
Speaker 2: First of all, you know, our companies save people's lives.
28:05
Speaker 2: It's it's just I'm sorry, it's slightly cheesy to say this,
28:08
Speaker 2: but that's the truth. And at the end of the day,
28:11
Speaker 2: I always say, and probably you heard me say this,
28:14
Speaker 2: people die and they would rather not. That is just
28:16
Speaker 2: the reality of our business. Because our population, they're getting older,
28:20
Speaker 2: they're getting sicker, and they need a new drugs to
28:25
Speaker 2: to to make you know, to to to sew their
28:28
Speaker 2: their issues. And that is why our industry is a
28:32
Speaker 2: huge defensive industry in an environment that where where things
28:37
Speaker 2: are changing so fast. So and of course the farmer industry,
28:42
Speaker 2: but that's more tactical. I mean, you need to start
28:46
Speaker 2: with the fact that the needs there's no there's no
28:48
Speaker 2: one who can climb that there is no market for
28:52
Speaker 2: the drugs that are being developed by bioteching. No one
28:54
Speaker 2: can say this because it's it's just so obvious. Now,
28:58
Speaker 2: the farmer industry, you know, I don't know four three
29:01
Speaker 2: four trillion dollars of turnover. I can't remember how much
29:03
Speaker 2: it is, but it's big. And you know, I've been
29:06
Speaker 2: pitching the pattern cliff for twenty years, telling my investors
29:10
Speaker 2: don't worry, you see patent cliff. It's going to come
29:12
Speaker 2: and farmer will ultimately buy our companies. Well it's here, right,
29:16
Speaker 2: every analyst in the business knows has calculated from you
29:20
Speaker 2: know BMS to a phisor to all these companies. What
29:23
Speaker 2: is you know, what are the time point at which
29:26
Speaker 2: they're going to lose exclusivity on their product, lose of earnings?
29:29
Speaker 2: You know, three hundred pinion? Is it four hundred million?
29:31
Speaker 2: I mean depends what how much? So this is super
29:34
Speaker 2: real and despite all the noise, despite even in twenty
29:39
Speaker 2: twenty five absence, I don't know, there's like three IPOs,
29:42
Speaker 2: that's quote. I mean, it's like compared to you know,
29:45
Speaker 2: one tenth of the IPU activity that we saw in
29:48
Speaker 2: the in the good years. Well, you know, the patent
29:52
Speaker 2: cliff creates a pressure that nobody wants to lose turnover
29:57
Speaker 2: and everyone wants to increase turnover, and that therefore, or
30:00
Speaker 2: this symbiotic relationship between the farmer industry and our innovative
30:06
Speaker 2: companies is now you know, nobody can challenge that. The
30:08
Speaker 2: farmer doesn't challenge it. And of course they want to
30:11
Speaker 2: acquire the right product and the right price and the
30:14
Speaker 2: right kind. And that's that's you know, totally understandable. But
30:17
Speaker 2: I have never been so positive that now, you know,
30:21
Speaker 2: no one challenges I remember when I was a rookie
30:23
Speaker 2: in this bustiness talking to farmer companies and said, biotech.
30:26
Speaker 2: You know, let's biotteck. You know who cares about biotech? Okay,
30:29
Speaker 2: that's you know, the old guy talking about something from
30:32
Speaker 2: twenty five thirty years ago. But look at today. So
30:35
Speaker 2: I'm super positive because outside of the noise, this remains
30:39
Speaker 2: the case, the demand for our product is absolutely real.
30:43
Speaker 2: The farmer needs our companies to do that, and therefore
30:45
Speaker 2: they're going to continue to license acquire those those assets.
30:50
Speaker 2: And therefore, if we pack the right horse, if we
30:53
Speaker 2: get to products that deliver on their clinical promise, then
30:58
Speaker 2: you know, from the public markets to the to the
31:00
Speaker 2: farmer acquisitions things, you know the price is going to
31:04
Speaker 2: be here at the end. So I'm I'm that's a
31:06
Speaker 2: major reason why. It's simple reason why I'm optimistic.
31:09
Speaker 1: Well, I'm with you, and I think the way that
31:13
Speaker 1: the price action has worked recently in companies that have
31:16
Speaker 1: positive data because I think for about three years or
31:20
Speaker 1: maybe slightly longer, we watched a world where great data
31:24
Speaker 1: would come out back in this kind of idea that
31:27
Speaker 1: we're talking about things that make a difference to patients,
31:29
Speaker 1: whether it's death or not, at this quality of life
31:32
Speaker 1: and chhare prices would hardly move or making it different.
31:34
Speaker 1: And sometimes I went down because people use the opportunity
31:38
Speaker 1: to use the volume to get out. Now I think
31:43
Speaker 1: you look back in the next since since April, but
31:46
Speaker 1: really since August, we've seen fantastic moves in share prices
31:50
Speaker 1: which are reflecting the new enthusiasm or a renewed enthusiasm
31:57
Speaker 1: for the sector, understanding that you can't. You know, mag
32:01
Speaker 1: seven are great, Tech is great, AI is great. But
32:05
Speaker 1: this little worry there's niggling in the back of people's minds.
32:08
Speaker 1: Am I too heavy on AI? Where is the area
32:11
Speaker 1: I need to think about? It's always here. Healthcare always
32:14
Speaker 1: helps us because humans need to do exactly that avoid
32:19
Speaker 1: death and have a good life while they're still avoiding death.
32:22
Speaker 1: So I'm positive, I'm excited for this. Let's talk about
32:25
Speaker 1: the differences or how you see us. Of course, there
32:30
Speaker 1: are changes happening there too, I'm trying. I don't know
32:33
Speaker 1: if we know the magnitude of the change, but at
32:36
Speaker 1: the attitude to science a little bit that's changed over there.
32:41
Speaker 1: I'm not sure that's particularly different in Europe, but it's
32:44
Speaker 1: more palpable in the US in terms of negativity towards
32:49
Speaker 1: science as a whole, expertise as a whole, funding NIH stuff.
32:55
Speaker 1: Although I hear different things from different people that the
32:58
Speaker 1: pressure on ANIH funding is focused on some certain areas,
33:01
Speaker 1: not everywhere. But how do you see this now the
33:04
Speaker 1: way that how's Europe dealing with this today? How have
33:09
Speaker 1: we done if you look at your portfolio, how many
33:11
Speaker 1: companies are European versus US. I mean that could be
33:14
Speaker 1: just a simple barometer right then. And then of course
33:17
Speaker 1: you bring China into this equation, which have just gone
33:20
Speaker 1: stratospheric at least in terms of the chart in terms
33:24
Speaker 1: of numbers of companies backing for science and really pushing
33:27
Speaker 1: for biotech, and forget all the other sectors that they're activity.
33:31
Speaker 1: How do you feel. What's your thoughts on all this?
33:34
Speaker 2: Well, you know, the what's happening with funding of science
33:38
Speaker 2: in the US. I still think it's noise and that
33:42
Speaker 2: things will change, and there's still so much funding in
33:46
Speaker 2: the US in comparison to QURO. But women as well
33:49
Speaker 2: leverage that as Europeans. You know, it's like that's one
33:52
Speaker 2: thing we have. It's like we publish more than both
33:55
Speaker 2: the US and China. We have amazing scientists across this
33:58
Speaker 2: vast territory of Europe. Eurovision Europe. Of course in the
34:03
Speaker 2: UK it's certain, et cetera. And I think that's that's
34:05
Speaker 2: an asset. And I think right now, particularly you know,
34:08
Speaker 2: because of what's happening in the US, I think this
34:11
Speaker 2: the science, the funding of science, the importance, the fact
34:14
Speaker 2: that people think that it's important to even for just
34:18
Speaker 2: sovereignty reasons, to fund European science. I think this is
34:20
Speaker 2: something that we have. The thing we that is an
34:23
Speaker 2: issue right now is that most European countries have constraints
34:29
Speaker 2: on budgets that constraint the ability to pay for innovation.
34:34
Speaker 2: And you know what the the Trump administration is saying about,
34:38
Speaker 2: you know, difference in price of product. The reality, if
34:40
Speaker 2: you just purely factual, the reality is that European products
34:45
Speaker 2: are reimbursed fraction of what you know they're being reimbursed
34:48
Speaker 2: in the US, and it's unlikely to be sustainable. And
34:53
Speaker 2: if I had you know, we're close to Christmas, if
34:56
Speaker 2: I had a wish, it would be you know, it'd
34:58
Speaker 2: be good to pay more for European innovation otherwise, you know,
35:01
Speaker 2: you may lose them. But you know, the the security
35:06
Speaker 2: the social security budget was voted in France the last night.
35:10
Speaker 2: And do I think that more innovative drugs will be
35:13
Speaker 2: will be funded. I don't think so. So. Maybe I
35:16
Speaker 2: didn't read properly, but I don't think so so. And
35:20
Speaker 2: that's a problem because science has no border, and a
35:24
Speaker 2: company in Paris in Milan in Copenhagen inventing an amazing
35:29
Speaker 2: product that can save people's lives if at the end
35:33
Speaker 2: of the day, I mean, it would be bad. Let's
35:36
Speaker 2: put it this way, as citizens of Europe, that this
35:39
Speaker 2: product cannot be administered to European patients and ends up
35:44
Speaker 2: being administered to US patients because the ultimate farmer buy
35:48
Speaker 2: of that company says Holdand you know, I'm I'm not
35:52
Speaker 2: gonna bother with a country that represents like say, two
35:56
Speaker 2: percent of my total market, and I'm going to insist
36:00
Speaker 2: just on developing this the US market very well. I
36:03
Speaker 2: as a citizen, I just don't like, you know, the
36:06
Speaker 2: sound of this. And I hope that we manage to
36:10
Speaker 2: convince all these governments that innovation, you know, there's a
36:13
Speaker 2: price for innovation, and ultimately, in fact, you may save
36:17
Speaker 2: a lot of money on the back end because people
36:20
Speaker 2: won't be in hospitals if you treat I don't know,
36:22
Speaker 2: heart failure and you have patients that are at home,
36:25
Speaker 2: you know, sorted, they're not in hospitals. Back to what
36:28
Speaker 2: I was saying about where the costs are in the system,
36:30
Speaker 2: it's in the hospital treating treating patients. So that's where
36:34
Speaker 2: you know, Europe is great on the science and has
36:37
Speaker 2: amazing science, but but it needs to figure out how
36:41
Speaker 2: to go the full monthy to all right, but this
36:45
Speaker 2: science ultimately needs to also be available to Europeans, and
36:50
Speaker 2: I that's the only place where I'm not that optimistic
36:53
Speaker 2: and think that we're going to have a lot of
36:56
Speaker 2: convincing to to do.
36:58
Speaker 1: Yeah, well, I'm in that. The issue I think Europe
37:01
Speaker 1: has is that at the same time, so we need
37:04
Speaker 1: GDP growth to feed any of these expenditures, and I
37:09
Speaker 1: don't think that's particularly great at the minute. We need
37:11
Speaker 1: to think about if people are genuine about their defense spending, well,
37:15
Speaker 1: that has to come out of somewhere. If your GDP
37:18
Speaker 1: is growing, get three percent, anyone to increase your defense
37:20
Speaker 1: by five percent? Where are you going to get that
37:22
Speaker 1: difference from? And unfortunately, the only two ways that this
37:26
Speaker 1: can go, because I don't know if supposed to oppose
37:28
Speaker 1: tomorrow UK is that's okay, okay, okay, Look guys, we'll
37:31
Speaker 1: pay ten percent more for the drugs. But that doesn't
37:33
Speaker 1: actually solve the problem because it's not that small that difference.
37:37
Speaker 1: But the only solution is so fine, you know, let's
37:41
Speaker 1: say let's play this forward that we end up with
37:44
Speaker 1: two years down the road, a whole bunch of drugs
37:46
Speaker 1: have been launched in the US. First, the farmer companies go,
37:49
Speaker 1: let's say the comparative price is too much. They're just say, look,
37:53
Speaker 1: I just don't want to lauch here for now, at
37:55
Speaker 1: least while there's surch of focus on this delta in
37:58
Speaker 1: prices and net prices, till I get a feel that
38:01
Speaker 1: I can do. Who suffers? The patients suffer? The only
38:04
Speaker 1: way that Europeans can deal with that. Afterwards to go, okay, no,
38:07
Speaker 1: so what, we can't increase our budget again, the patient suffers,
38:10
Speaker 1: So we're going to make it available only to the
38:12
Speaker 1: first ten thousand patients every year. I don't know whatever
38:15
Speaker 1: formula they find to do, which is a lottery. I mean, jeez,
38:18
Speaker 1: can you imagine if we get there right? But that
38:21
Speaker 1: is something that and I don't know what the solution.
38:23
Speaker 2: Is really well, no, I think to me, But again,
38:26
Speaker 2: I'm not the excellent in that field. But if I
38:28
Speaker 2: look at what I you know, the countries are do
38:30
Speaker 2: the best. You know, there are things that are reimbursed
38:33
Speaker 2: that should not be reimbursed. I mean, I do I
38:35
Speaker 2: think that, and I've said this publicly before. Do I
38:38
Speaker 2: think people who have you a headache go to that
38:41
Speaker 2: doctor to get a prescription for paracetamol? That makes no
38:46
Speaker 2: sense to me as a citizen. To me, it's like
38:49
Speaker 2: I've got a headache, you know, I buy out of
38:51
Speaker 2: pocket paracetamol and myself and it's a paracetamol. So that
38:56
Speaker 2: I hope that today that I need something you know,
39:00
Speaker 2: different as a drug, then I will be able to
39:03
Speaker 2: access that drug. But the numbers are so vast in
39:07
Speaker 2: how many people just decide to go to their physician
39:10
Speaker 2: get reimbursed for that, to get a prescription for a
39:14
Speaker 2: drug that you don't need a prescription for. I'm exaggerating possibly,
39:18
Speaker 2: of course, but I think and so it's you know,
39:21
Speaker 2: if the citizens want to be treated, they need to
39:23
Speaker 2: also start to understand that they have a responsibility in
39:28
Speaker 2: that and that they need to save you know, their
39:31
Speaker 2: their own dollars healthcare dollars, euros, pounds or whatever in
39:37
Speaker 2: order to for a disease. I actually will say them, not, well,
39:41
Speaker 2: just be a nice drug that they could get offered.
39:43
Speaker 1: Some countries are worse than others, I have to say.
39:45
Speaker 1: I don't know whether you remember or not, but I
39:47
Speaker 1: spend three or four days a week in France every week,
39:51
Speaker 1: week in week ount There's been twenty nearly twenty years
39:53
Speaker 1: I've been doing that, and I do know that when
39:58
Speaker 1: I one of my children is sick or I am
40:01
Speaker 1: sick and I go to the doctor, I come away
40:03
Speaker 1: with a bag full of stuff and part of it.
40:06
Speaker 1: And I think some of my friends that if they
40:08
Speaker 1: don't come away with the backlos so the the doctor
40:10
Speaker 1: hasn't done their job anyway, just down.
40:12
Speaker 2: But that's you know, this is this is our heads.
40:14
Speaker 1: This needs to change, right, So put China in this
40:17
Speaker 1: because China is also Okay, it's a vast market, so
40:22
Speaker 1: volume is particularly important there. I mean you can't, yeah,
40:26
Speaker 1: but the prices are much lower. So tell us how
40:29
Speaker 1: you feel about China. I don't know if you've I've
40:32
Speaker 1: seen you do deals with China partners, yet have you
40:35
Speaker 1: got assets out of China? Where do you sit on this?
40:37
Speaker 2: So what you may not know is that we actually
40:40
Speaker 2: opened an office in in Shanghai in two thousand and six.
40:45
Speaker 2: At the time, probably was silly, but the idea was
40:49
Speaker 2: something know this, something needs to happen there at the time,
40:52
Speaker 2: we're talking about traditional medicine, you know, so things that
40:55
Speaker 2: were the complete other side of the next you know,
41:00
Speaker 2: baltech drug And we didn't stay there very long because
41:04
Speaker 2: you know, there was two thousand and eight and you know,
41:06
Speaker 2: we had to focus on our own country. But we
41:07
Speaker 2: have relationships today that date stack twenty years. And anyone
41:12
Speaker 2: who's surprised about what's what's happened in China just didn't
41:18
Speaker 2: do their homework because it wasn't visiting ritten. I have
41:22
Speaker 2: visited China several times a year over the last twenty years,
41:26
Speaker 2: and it's just amazing what's happened there. But it's not
41:30
Speaker 2: the surprise, you know, the sea turtles, these people the
41:34
Speaker 2: first a direction by the government, the central government say
41:38
Speaker 2: this is going to be important. Red carpet to those
41:42
Speaker 2: sea turtles. People who had been at Genetek and Amgen
41:45
Speaker 2: and Gilead and all these companies for ten to fifteen
41:48
Speaker 2: years post their post stark and these people are the
41:52
Speaker 2: people who have developed amazing, you know, from scratch this
41:56
Speaker 2: industry by hard work, just relent this work and not
42:01
Speaker 2: reinventing the wheel, but just doing the job properly as
42:05
Speaker 2: they should. With the idea. So today, yes, you know
42:09
Speaker 2: the statistics, forty percent of all business development deal farmer
42:12
Speaker 2: we're done in China, and that's just no, there's no mystery.
42:16
Speaker 2: People nowadays, you know, in the Western world, are very
42:19
Speaker 2: cagey about even mentioning the what target they're there after,
42:24
Speaker 2: because three months late that there will be ten companies
42:26
Speaker 2: that are that are done. Those those in China, small companies,
42:31
Speaker 2: often not very well funded, companies that have done incredible
42:34
Speaker 2: with very little money. So it is what it is,
42:37
Speaker 2: and we shouldn't be surprised and we need to up
42:40
Speaker 2: our game as European my view and maybe as Europeans,
42:44
Speaker 2: I think we should play this situation. We should. As
42:48
Speaker 2: I told you, we have relationship dating twenty years in China.
42:51
Speaker 2: These are super strong people. They know what they're doing,
42:54
Speaker 2: and you know we have Initially it was more licensing
42:58
Speaker 2: our products to Chinese partners, but nowadays it's the opposite,
43:01
Speaker 2: and so you know, we are active in this space.
43:03
Speaker 2: We haven't said much about this, but today I would
43:07
Speaker 2: argue it's a non opportunity for europe to continue with
43:11
Speaker 2: these relationships and and leverage those in the next five
43:15
Speaker 2: to ten years because you know, the geopolitical situation. I
43:19
Speaker 2: don't think it's it's it's it's it's something that's going
43:23
Speaker 2: to change much over the next ten fifteen years. I
43:26
Speaker 2: think the three areas you know, China, US, Europe are
43:31
Speaker 2: will need a specific treatment if you want to be active.
43:35
Speaker 2: We are most active in Europe. I forgot to answer
43:38
Speaker 2: your question. Seventy percent of what we do is in Europe,
43:40
Speaker 2: thirty percent in the US. So if we can leverage
43:44
Speaker 2: you know, the best of the US, and there's so
43:47
Speaker 2: much things that are amazing in the US on the
43:49
Speaker 2: Batic side and the best of China in order to
43:52
Speaker 2: do the best of Europe. This is this is the
43:55
Speaker 2: way we're thinking about this.
43:57
Speaker 1: That's great. I mean I have a similar experience with China,
44:01
Speaker 1: having started going there in the early two thousands and
44:04
Speaker 1: just watching the speed with which they went through the
44:07
Speaker 1: steps of becoming essentially innovative industry. So let's talk about
44:12
Speaker 1: the company a little bit, or Sophie over a bit.
44:14
Speaker 1: What was you wanted to highlight? I mean, I'm pretty
44:17
Speaker 1: sure you've had I'm not going to ask you the
44:19
Speaker 1: question of what's your most exciting portfolio company because I'm
44:22
Speaker 1: probably going to get the answer, well, you know, you
44:24
Speaker 1: can't make me choose between my children, et cetera, et cetera.
44:27
Speaker 1: But so let me ask you about your flagship exits.
44:30
Speaker 1: What was the one that maybe in terms of what
44:33
Speaker 1: they did for society afterwards or in terms of the
44:37
Speaker 1: X return, whichever way you like to answer that. And
44:40
Speaker 1: you could just choose from an alphabetical order and say
44:42
Speaker 1: I'm just going to choose the first part of the
44:44
Speaker 1: alphabet or something. Well, to make it easier for you.
44:47
Speaker 2: Yeah, you know, we sold the AMII French company in
44:51
Speaker 2: you to us Zenica last year. You know, we happened,
44:54
Speaker 2: you know, in developing a drug that that's now demonstrated,
44:59
Speaker 2: you know, work in phase three. So that's that's always nice.
45:02
Speaker 2: It's nice to sell a company for for for euros
45:04
Speaker 2: and a big number, but it's also super nice to
45:08
Speaker 2: see that that drug actually panned out. I think about
45:11
Speaker 2: Sincore as well, another company that we saw tourstra Zeneca,
45:15
Speaker 2: where you know, they had phase three results recently in
45:18
Speaker 2: resistant hypertension. And you know, it's always it's financially important
45:22
Speaker 2: for us because you get a turnout if you if
45:24
Speaker 2: you if you hit the mass on. But it's also
45:27
Speaker 2: super interesting that you have a chance to change stetu
45:30
Speaker 2: of care. You know, it's like this is done like
45:32
Speaker 2: this before a drug and then you have a new
45:34
Speaker 2: drug and that that changes the style of care. I
45:36
Speaker 2: mean this year, of course, and it's not an exit,
45:39
Speaker 2: but it's it's a it's a public huge success. That's
45:42
Speaker 2: that Abivacs of course, if you think about Abivax, was
45:45
Speaker 2: this company that was not doing great for a long
45:48
Speaker 2: time on on your European public market and then when
45:52
Speaker 2: public on on NASDAC, you know still had it was
45:55
Speaker 2: had the had the pressure of these European company that
45:59
Speaker 2: hasn't yet demonstrat that product works. And look what happens
46:03
Speaker 2: when when you come out with you know, phase three
46:07
Speaker 2: results that is absolutely clear cut and everyone needs to recognize, wow,
46:11
Speaker 2: this could be a major drive and well you know
46:15
Speaker 2: it's it's you know we we are not me, but
46:18
Speaker 2: my pap can still on the on the board of
46:21
Speaker 2: that company. So I'm not going to compet more than that.
46:23
Speaker 2: This is this is but seeing it amazing.
46:27
Speaker 1: Yeah, it is. I know how it feels, even as
46:30
Speaker 1: an analyst who has no skin in the game, when
46:33
Speaker 1: you have a company that you cover that does well
46:36
Speaker 1: it's exciting, does well, not in terms of share price,
46:39
Speaker 1: in terms of Wow, this data really is going to
46:42
Speaker 1: make a difference to people's lives. And let me ask
46:44
Speaker 1: you a question that if Abevac's had not been listed on
46:48
Speaker 1: the Nasdaq, I mean this is a very hypothetical question,
46:51
Speaker 1: and had the remain just listed in Europe and had
46:55
Speaker 1: this news, do you think the share price reaction would
46:57
Speaker 1: have been the same?
46:58
Speaker 2: Well, outside of share price, And this is not evaculated,
47:00
Speaker 2: it's it's it's what I've been doing for thirty years
47:04
Speaker 2: and need to recognize that that's what That's a place
47:08
Speaker 2: where we have a lot of progress to do. So
47:11
Speaker 2: can you rate seven round and fifty million? I think
47:14
Speaker 2: plus the Green show? I think it was even higher
47:15
Speaker 2: than that eight hundred million dollars on the basis on
47:18
Speaker 2: the basis on the bays of any results in Europe
47:22
Speaker 2: in a better company. The answer is clear cut, has
47:26
Speaker 2: never been done. Can it be done? Well? You know
47:29
Speaker 2: so probably not in my lifetime, So I hope it could.
47:34
Speaker 2: I think, you know, since the beginning of my career,
47:38
Speaker 2: there was you know, is Dak and all this idea
47:40
Speaker 2: that we would get there and have our own Nastac
47:42
Speaker 2: and look what happened. So today the answer to your question,
47:46
Speaker 2: I'm afraid is no, and we need to you know,
47:49
Speaker 2: I don't have the time and my LPs don't have
47:51
Speaker 2: the time to to wait for it. So we need
47:54
Speaker 2: to do what we need to do. And if we
47:56
Speaker 2: need to bring our companies to Nastac, they still you know,
47:58
Speaker 2: it's a you know, I'll be back to is a
48:00
Speaker 2: Paris based company. In fact, it's in our in the
48:03
Speaker 2: same building as so if you know, on the third floor,
48:06
Speaker 2: we're on the seventh floor. So just to tell you
48:08
Speaker 2: it's it couldn't be closer to us in Paris, and
48:11
Speaker 2: yet it is a you know, very loud now a
48:15
Speaker 2: marketcap company based based on the results that they've so I.
48:18
Speaker 1: Followed the story of Verona Farmer also similar similar story,
48:23
Speaker 1: UK based company. David Debbsworth somebody I've known for years.
48:26
Speaker 1: I've covered two of its companies in the past. The
48:30
Speaker 1: thing that he said to me the other day was
48:33
Speaker 1: he thinks that it made a big difference to have
48:35
Speaker 1: us management in the company. Do you think that's the
48:39
Speaker 1: same here.
48:40
Speaker 2: No, I think it's not about what your passport says,
48:44
Speaker 2: It's about what competence you have and how you can
48:47
Speaker 2: demonstrate this to your investigates. By the way, you know,
48:51
Speaker 2: Verona is a lost well for us because we actually
48:55
Speaker 2: picked we yeah, we picked Verona as as one. We
49:00
Speaker 2: had confiction on it, and you know, hindsight tells us
49:04
Speaker 2: we sold far too early our shares, but it is
49:07
Speaker 2: what it is. You know, we made the right call.
49:10
Speaker 2: But you know in that particular case, we were not
49:13
Speaker 2: patient enough. In the case of that Elaks, we were
49:16
Speaker 2: and we you know, we ripped the benefits. Look at Abbivax.
49:20
Speaker 2: Abivax did what it had to do, and I think
49:23
Speaker 2: what every company needs to do is bring the management
49:27
Speaker 2: that will allow you to look forward and convince the
49:31
Speaker 2: next generations of investors to invest and also to operate
49:35
Speaker 2: as you should. Mark the Gaidel did a lot of
49:37
Speaker 2: his career in the US. He's also a very known
49:40
Speaker 2: entity to us because I mentioned about Sincore. He was
49:43
Speaker 2: the CEO Sincor sending the company to US, so Seneca
49:45
Speaker 2: before that, he was our CEO in Corvidia selling it
49:48
Speaker 2: to and all this so since three times, by the way,
49:51
Speaker 2: it's the first guy not a country. Remember when the
49:53
Speaker 2: last time he came to our office. We have these
49:56
Speaker 2: basically portraits of our our entrepreneurs in our corridor war
50:00
Speaker 2: of fame as we call it. And he's the first
50:02
Speaker 2: guy who will have three portraits, you know, for for
50:06
Speaker 2: having generated return.
50:07
Speaker 1: Let me know what company he starts next after this one.
50:11
Speaker 2: Yeah, of course, after we invested. I'll tell you. You know, well,
50:13
Speaker 2: last time he said no, no, I'm not gonna and I'm gone,
50:16
Speaker 2: and then he managed to convince to you know, in
50:18
Speaker 2: French you say never two without three, so three people,
50:21
Speaker 2: you know, to go from three to four might might
50:23
Speaker 2: be more complicated. And you know he still has a
50:25
Speaker 2: lot of work to do on that.
50:27
Speaker 1: Right, we're getting close to the going. Sorry I stopped,
50:30
Speaker 1: you know.
50:30
Speaker 2: I'm just just say. You know, of course, experienced management's
50:33
Speaker 2: done it before. There's a lot of people in the US,
50:36
Speaker 2: but you know, what happens to be to be franchial.
50:40
Speaker 2: We should rejoice that this is possible.
50:42
Speaker 1: Even with before there was the first time for him, right,
50:45
Speaker 1: it's that first time that gave him the experience. So
50:47
Speaker 1: we need to also read acknowledge that some people can
50:49
Speaker 1: have their first time anyway. So look, we're getting close
50:52
Speaker 1: to the hour. I've got a couple more questions left
50:56
Speaker 1: twenty twenty six. I'm looking at what sort of data
51:00
Speaker 1: sets or technologies. I don't want to call them hot areas.
51:03
Speaker 1: I'm going to call out one and see whether you've
51:05
Speaker 1: got one that you want to add by specifics. Now,
51:09
Speaker 1: we've all had bispecifics. We know by specifics a lot
51:12
Speaker 1: of them have been in the world of CD three
51:14
Speaker 1: t sell engagers, however, and the real hardcore data for
51:19
Speaker 1: by specifics with the idea of I've got two mechanisms
51:23
Speaker 1: of action, not CD three on the same cell, so
51:27
Speaker 1: digit PD one CTLA for PD one VEGGIEFPD one. I mean,
51:34
Speaker 1: it all happened to be that sort of world. Of course,
51:36
Speaker 1: we've got the ripravant from J and J in terms
51:39
Speaker 1: of C meth and e GFR. That's already improved and proven.
51:43
Speaker 1: But I'm I'm going to pitch by specifics of that
51:46
Speaker 1: ELK as the proof of whether the idea of biology
51:51
Speaker 1: of it the two mechanisms on the same cell at
51:55
Speaker 1: the same time, becomes a reality next year or not.
51:58
Speaker 1: So I'm rooting for it. I'm hopeful for it, not
52:02
Speaker 1: any particular one, but I quite like still the astrosen
52:06
Speaker 1: curriblogostomic approach, which is digit PD one. I know that
52:10
Speaker 1: I'm probably the last man standing here and they are
52:13
Speaker 1: the last companies standing pretty much.
52:15
Speaker 2: What's yours look, I fig you absolutely right, No, No,
52:19
Speaker 2: we believe that you know, not just by specific but
52:23
Speaker 2: multi specifics is the way to go. And it's in
52:27
Speaker 2: fact it's intuitively understandable why this would be better. Proof
52:32
Speaker 2: is in the pudding as as I said earlier. But
52:35
Speaker 2: we we are in fact massively looking at this in
52:39
Speaker 2: both oncology as well as you know I and I
52:42
Speaker 2: and knowlogy inform H and we think those two this
52:45
Speaker 2: approach in those two areas is going to be a
52:48
Speaker 2: major wing going forward. But it's not the only thing.
52:51
Speaker 2: You know, ADCs. I think the next gen ADCs I
52:55
Speaker 2: gotta I gotta be super important. The next gen radio
52:58
Speaker 2: pharmaceuticals are going to be super important. We are the
53:00
Speaker 2: stage today if you look back, and you'll leverage this
53:04
Speaker 2: knowledge for the future indications. Just take those through modalities,
53:10
Speaker 2: multi specifics, ADC's radio pharmacticals. I would say I would
53:15
Speaker 2: not be surprised that fifty percent of all drugs in
53:18
Speaker 2: ecology and iron I will be using one of those.
53:23
Speaker 1: Yeah, I agree. I mean, if we've got some of
53:25
Speaker 1: the more clever, well not more clever, also interesting antibody
53:29
Speaker 1: molecule conjugates coming up right, people who are have just
53:33
Speaker 1: been learning about folks using an anti EGFR for instance,
53:38
Speaker 1: or an anti HARTWO to bring a kindly his inhibitor
53:41
Speaker 1: to the milieu, to the cells or RNA modulators, s irna,
53:46
Speaker 1: et cetera. So that that's going to be really exciting.
53:49
Speaker 1: I just hope that the world is there and ready
53:52
Speaker 1: to remember that these drugs at the end of the
53:55
Speaker 1: day needs to sell and make some money for the
53:57
Speaker 1: companies that are developing them. Other worse Wester point the
54:00
Speaker 1: last couple of minutes M and A twenty twenty six
54:03
Speaker 1: five turned out to be okay or good, I would
54:05
Speaker 1: say in terms of Farmer buying, biotext far buy text buying,
54:08
Speaker 1: biotext gen map and mirrors, for example. What's your feel
54:14
Speaker 1: for twenty six Do you feel the momentum in the
54:17
Speaker 1: second half of the year is going to be kept?
54:20
Speaker 1: Is that what you're hearing?
54:21
Speaker 2: Yeah, I'm hopeful. I'm hopeful already for the acquisitions above
54:26
Speaker 2: one billion. You know, it's a very more than decent year.
54:30
Speaker 2: In fact, it's a record year in that category. And
54:34
Speaker 2: you know, one billion moves the needle for friends like
54:37
Speaker 2: out one billion plus. So I'm actually very hopeful. I
54:42
Speaker 2: think the XPI development over the last six months and
54:45
Speaker 2: the potential interest with the lower interest rates to take
54:49
Speaker 2: companies public will will increase that tension and that should
54:54
Speaker 2: be good. So I am hopeful that in fact twenty
54:57
Speaker 2: six will it will be even better than twenty five.
55:00
Speaker 2: You know that's that's that's IPO, MNA and IPO.
55:04
Speaker 1: I mean, I've had I've got friends on the cell side.
55:06
Speaker 1: I don't know if you follow the bytach hangout ever
55:09
Speaker 1: that I get involved with on Fridays sometimes sell side
55:13
Speaker 1: friends out of the US lee ing friends or Karen
55:17
Speaker 1: kan Toork Karen Jefferys used to come along, but he's moved.
55:22
Speaker 1: And I think we had a range of something between
55:24
Speaker 1: fifteen to fifty companies potentially ipoing in twenty twenty six.
55:29
Speaker 1: And are you optimistic that we're going to be able
55:31
Speaker 1: to see some of this momentum in the follow on
55:33
Speaker 1: market potentially washed through to IPO is essentially eventually in
55:37
Speaker 1: twenty Yeah.
55:38
Speaker 2: In fact, to me, it starts with the follow on
55:41
Speaker 2: before it reaches the IPOs, and I would say it's
55:44
Speaker 2: going to be double digit for sure. I mean for sure,
55:47
Speaker 2: this is my take. I would say twenty two thirty
55:50
Speaker 2: more than fifteen fifty is or big number, and I'm
55:53
Speaker 2: not sure that that's correct. In fact, fifteen that's one
55:56
Speaker 2: a week. That's what we worry. I would get worried.
55:59
Speaker 2: But twenty IPOs of the best companies, twenty thirty IPOs
56:04
Speaker 2: and then all the secondaries. I think that that's the
56:06
Speaker 2: way I'm looking at next year.
56:08
Speaker 1: Great Antoine. Again, it just reminded me how wonderful it
56:13
Speaker 1: is to talk to you, either on a panel or
56:16
Speaker 1: together like this. We really have to make sure that
56:19
Speaker 1: this happens a little bit more often, whether it's a
56:21
Speaker 1: podcast or whether we just meet each other at your
56:24
Speaker 1: wonderful offices where I can see behind you. And so
56:27
Speaker 1: thank you for your time. It is an absolute pleasure
56:30
Speaker 1: the hour and a bit flew I have to say,
56:33
Speaker 1: and that's always a great thank you. I really appreciate this.
56:37
Speaker 1: I think you're Sofiova is a key player in the space,
56:41
Speaker 1: and we really have really enjoyed your well, thank you,
56:45
Speaker 1: your pearls of wisdom. So thank you.
56:47
Speaker 2: Well, thank you for your invitation and see you soon.
56:51
Speaker 3: Absolute pleasures uses, asses, US
57:34
Speaker 1: Changes bases,