The Bio International Convention just wrapped up in San Diego, CA this past week, and it sure was a blur of keynote speeches, non-stop partnering meetings, social mixers, and a touch of the World Cup thrown in for good measure! This event is traditionally where even a lot of Canadian institutions choose to make big announcements, and 2014 was no exception, with Versant making a big splash back here in Quebec with their exciting news.
Versant Ventures, a global life science investment powerhouse with over $1.5B under management, announced the creation of a new biopharma incubator here in Montreal, to take advantage of the considerable opportunity that both academic excellence and drug discovery know-how in the province represent. Versant has nucleated Inception Sciences Montreal with the intent of creating various start-up companies that can deliver candidates to fill the gaps in big pharma pipelines, and accelerating the whole process of research-to-commercialisation.
It's great news for the province, and we at AmorChem sure don't need to be convinced of either the opportunity that exists in Quebec or the current advantage of getting in early on the deal. "The early bird gets the worm", as the saying goes, and we invest exclusively in early stage discovery projects that we incubate in the laboratories of academic institutions and research centres, since our launching in 2011. The major difference between us and Inception Sciences would be that we intentionally avoid the start-up route, choosing to offload to pharma earlier in the process, for a variety of reasons some of which will be discussed a little further below.
Peppi Prasit, CEO and co-founder of Inception Sciences, is no stranger to Quebec and has noted recently that he spent 15 years here in the province, working alongside serious drug discovery/development talent at Merck, and he is very aware of the expertise resident in the province. We also have something in common, in that we too appreciate that ex-Merck expertise and indeed formed NuChem around a team of their medicinal chemists! Inception Sciences views Quebec as an under-valued equivalent to the Bay Area on the west coast or the Boston biotech hub on the east coast, and Prasit has already eyed certain institutions that "we would love to develop relationships with".
Versant has been very active in Canada in the past year, launching Inception Sciences Vancouver and Blueline Biosciences at the MaRS discovery district in downtown Toronto. The Vancouver operation has partnered with Bayer and is focused on retinal diseases, while the biotech incubator in Toronto has already partnered with Celgene and has a focus on oncology and inflammation. This latest venture in Montreal completes a Canadian sweep from west to east, and adds a third and powerful component to their drug discovery engine.
They are not going it alone either, and have rallied support from large institutional investors here in Quebec, including FTQ, BDC and local fund-of-funds giant, Teralys Capital. Cedric Bisson, venture partner at Teralys, was quick to offer support of the move by Versant (including a $25M commitment) as outlined below.
"We are excited to actively contribute to the launch of Inception Sciences in Quebec. Versant Ventures, a leading global venture capital firm, excels with its unique access to large global pharmaceutical companies, and its presence in our ecosystem should forge stronger links between Quebec and key international industry and investment decision makers. Furthermore, Versant Ventures' recognised expertise in medical devices will strengthen our ability to develop and commercialise our entrepreneurs' innovations in this field."
This enthusiasm was matched by BDC, as well as FTQ who themselves are a limited partner in Teralys Capital, the largest fund-of-funds in Canada.
"Through its new direct investment in Versant Ventures, along with its support as a limited partner in Teralys, FTQ continues its efforts to expand the number of life science investment funds active in Quebec. This investment team's track record, extensive network, operational expertise, along with its unique skills in starting businesses and its collaborative business model with pharmaceutical companies, make it a valuable partner for the Fonds, which has been consistently investing in life sciences over many years. We are pleased to see Versant launch an operational Inception Sciences unit in Quebec. Inception will also take advantage of locally existing talent and infrastructure.", said Alain Denis, Senior Vice-President (New Economy) of FTQ.
It's all very positive for the local life science ecosystem and economy, notwithstanding the fact that the biotech start-up model has already been tried here before, and ground to a halt in the crash of 2008/9. Certainly, things will have to be handled differently if companies are to be kept alive long enough to generate a real return on investment, and/or actually achieve some degree of sustainability. If there is something productive that one can take out of the failures experienced in the creation of the previous biotech hub here, it has to be that previous mistakes have provided teachable moments and that they will not be repeated.
At the very least, these new companies will need to have a unified board with a singular vision, and not the previous squabbling investor syndicates of the bad old days, who began the disagreements seemingly the day after the financing was closed, and eternally thereafter. Equivalently, the management of such new companies have to actually be truly competent collaborators, working with the board, not against them, and carrying the vision and aspiration of that board into their offices, each and every day. Gone are the days of the stereotypic mercenary CEO and confounding CSO holding their companies to ransom, making themselves richer in the process while nothing even close to a commercialisable asset was being developed.
For now at least, AmorChem avoids the whole biotech company option, and we work hard at nurturing our various candidate assets where they seem to better belong, for now, i.e. in the skilled hands and labs of our academic partners. Yes, of course, it remains to be proven whether we can take such a project that may only have seen, say, a $500,000 investment, and turn it into a very acceptable exit and ROI by partnering or doing a deal with big pharma. We remain very optimistic about that possibility, however all I will say for now is - watch this space!
That's it from me today, it's a glorious Sunday morning as the thermometer above clearly shows, and if it's already above 35 degrees Celsius then we better make that Bolivian Black Magic dark roast an iced coffee! ;)
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