Andera’s Naveed Siddiqi talks to Consilium about the new fund, his take on investment trends and sentiment in Europe and beyond.
You recently closed the €345m BioDiscovery 5 fund. What makes your investment strategy unique among your peers?
BioDiscovery 5 is one of the largest funds dedicated to the life sciences in Europe today. That dedication has been our guiding principle since BioDiscovery 1 launched in 2001 when we were the only fund fully focused on investing in the life sciences at the time. We had the courage to back the space early and have seen that strategy create great successes e.g. Covagen in the antibody platform space. We believe in balance in our investment approach, return versus practical scientific application, and invest across biotech and medtech. We are one of the most significant investors in Europe in medtech, which we believe has tremendous potential. We are also one of the only funds that can be described as truly global – we are not just focused in France, but have investments across Europe and the US and support from global LPs.
It has been a busy start to the fund with the entire team working on several promising new opportunities. Most recently we have led a €57 million financing round in a UK oncology company Crescendo Biologics, led a €24.5 million financing round in an Italian surgical robotics company MMI and participated in a $70 million financing round in a US nephrology company, Corvidia Therapeutics.
What do you see as your greatest investment success story out of the BioDiscovery funds?
We don’t like to point to any one investment as each success story has its unique considerations. However, since inception, we have had 16 trade sales and 16 IPOs in our various BioDiscovery funds, including several successful listings on NASDAQ. We have sold to Merck, Allergan, Janssen, GSK, Medtronic and Boston Scientific amongst others at attractive multiples.
You recently spun out of the Edmond de Rothschild Group and are now fully independent as Andera Partners. What impact will this have on the way the fund operates?
There is no fundamental change. The investment teams remain as before. The management company had been running autonomously for several years and has built a strong reputation and a very solid financial position with approximately €2 billion under management across various funds. We see the opportunity as an independent company to enhance our alignment with a broader set of clients and to develop our investment offering further for their benefit.
How would you describe the sentiment across Europe for investment in the life sciences?
The environment is very favourable at present. We see excellent opportunities across Europe at realistic valuations that can enable larger rounds of investment to enable greater value creation than was possible in the past. We are leading or co-leading syndicates with investors from across Europe and further afield. The science has always been very strong in Europe, but now we see more experienced management teams and greater availability of capital. We expect that will translate into stronger companies with greater value creation.
Are there any emerging trends in the sector that we should keep an eye on in 2018?
We expect that the pricing and reimbursement environment overall will remain challenging for new R&D stage projects. The need to answer the ‘so what’ question around data continues to be increasingly important. We see insights into new biology as the key drivers for innovation to address unmet need whether it is in oncology, neurology or orphan diseases. We have a broader emerging set of tools to address this biology than ever before ranging from classic small molecules to RNA therapeutics and gene editing. Ultimately, the data generated for new drugs has to be able to stand up against competitive approaches and offer the potential of improved patient outcomes. We believe companies which have a clear strategy to generate differentiated and innovative data targeting specific patient sub-populations and achieving a high treatment effect will attract the greatest degree of large company and investor interest. The demand for products that can meaningfully improve the standard of care and reduce the overall costs in the healthcare system remains high. We believe the sector will continue to benefit from strong investment and M&A activity.
