On the Money is Bryan Garnier’s monthly webinar and podcast series in which our analysts sit down with Private Equity and VC leaders to discuss some of the most exciting investment themes across technology, healthcare and sustainability.

Antoine joined Dylan van Haaften, Head of Healthcare Equity Research at Bryan Garnier to discuss what is happening in the biotech sector right now and where we are in the cycle. They covered the impact of market downturns on innovation and the remaining hurdles in biotech innovation, the difference between the private and public market sentiment towards biotech and why private equity firms are taking stakes in healthcare venture capital in Europe.

Founded in 1972, Sofinnova Partners is a deeply established venture capital firm in Europe, with 50 years of experience backing over 500 companies and creating market leaders around the globe. Today, Sofinnova Partners has over €2.5 billion under management and invests in life sciences, specializing in healthcare and sustainability. Sofinnova Partners is a hands-on company builder across the entire value chain of life sciences investments, from seed to later-stage.

Transcript

00;00;01;14 – 00;00;24;04

Dylan van Haaften

Good morning and welcome to Brian Garnier’s inaugural webinar “On the Money”, where our analysts will be in conversation with leaders from the private equity and venture capital world to talk about what’s hot and what’s not. Today we are speaking to Antoine Papiernik, chairman of Sofinnova, about healthcare to get his take on where we are in the healthcare cycle, particularly during this tumultuous time for growth and innovation in the public and private markets.

So for a brief bio on Antoine. Antoine Papiernik is chairman and managing partner at Sofinnova Partners, which he joined in 1997. He was a board member, an initial investor in success stories like Actelion, Shockwave Medical CoreValve and Highlife. Antoine, it’s really great to have you on and kick off this “On the Money” series. Thank you very much.

00;00;43;12 – 00;00;45;04

Antoine Papiernik

Dylan. Thanks for having me.

00;00;46;19 – 00;01;10;24

Dylan van Haaften

Excellent. Well, let’s get started. My first question would be that, and I think this is very much for myself as well, with around 50% of the finance and biz dev community only going through primarily bull markets and lower interest rates: how do you view the recent market downturn? Has, in your view, market sentiment ever been this bad through the cycles you’ve been through?

00;01;14;09 – 00;01;59;02

Antoine Papiernik

I’ll start with an optimistic comment. It’s pretty bad. So that’s how I would start. But, being a total optimist, I think there’s a lot of silver linings and I think hopefully the next 45 minutes will we look at those. I have been around for long enough and this is not my first really bear market and I started in 1995 in this business. I had a few good years before 2001 but 2001 felt bad. It felt really bad where the markets were completely gone basically from one day to another.

I won’t talk about the differences because this one is very, very different. So 2001 for sure was pretty bad. But we survived and we grew, and we learned and we became stronger. 2008 was pretty bad too. Literally like three times the shock. Hopefully this one will teach us everything we ever wanted to know about our markets without ever wanting to go through it.

But I think we’ll survive as well. That’s my conclusion for today’s webinar. But let’s look at different things. But I would say third time around, pretty bad, but we’ll survive and then we can start from there.

00;02;49;24 – 00;03;09;20

Dylan van Haaften

Excellent. That is an optimistic comment. There’s also another optimistic saying in markets, which is that you make most of your money in a bear market, but you don’t realize it at the time. And given the bifurcation in public and private markets, specifically valuations and typically the correlation between both, and this sort of being a unique situation we saw over the first quarter, how do you see this, let’s say, sentiment manifest, and where do you sort of see opportunities as a private market investor? And do those private market ambitions also spill over to the public market right now?

00;03;22;24 – 00;03;54;01

Antoine Papiernik

Yes, maybe. I think it would be useful to take a slight step up or try to elevate ourselves, try to understand what’s different today and what was the situation on 2001 or even 2008. It is very different today. From a macro perspective of our sector, meaning life sciences in general, I think that a single fact should give us hope that we are in a very different situation and despite the harshness of the current situation, I think there will be a lot of opportunities. The single most important fact to me is that the biotech industry has gone so far in the last 20 years. 20 years ago, I would say, just look at how or remember how, the pharma for those who were there, looked at our biotech companies – they were a gimmick or some “new kids on the block”, and pharma was not absolutely sure or keen to see us really coming up and be this wannabe developer of new drugs. The situation has been completely turned on its head. Today, we know 70% or more of all the drugs that are being sold with a big biotech, big pharma, is invented in the biotech world. That is a massive change from that initial ‘who are these guys?’ outlook from pharma, and today it’s a symbiotic relationship, I mean today the pharma knows that they have no other choice in a way, and it has become a symbiotic relationship between the small biotechs that ultimately are the innovators of the drugs that develop those to a certain point. And now they are picked up either because they are acquired or because they are partnered to the big pharma.

The 20 year stint at developing our industry as an industry that repeatedly, and increasingly can develop innovation, new drugs that will treat patients in need, is a very different situation. We were hopeful 20 years ago. Today, we know the value that we bring to the whole sector all the way to the patients. So that is a massive difference.

And some of the elements that surround this is, is people are accumulated, or at least looking at pharma today, we know that pharma has probably between three hundred and five hundred billion in dry powder in their coffers to buy or partner with biotech companies. This is not going to be released necessarily in the next six months.

It will take years, but it will be released because as I said, it is now a symbiotic relationship. The pharma companies absolutely need those biotechs to help them grow. So that’s your fact: this relationship between pharma and biotech, the fact that there’s a lot of money in the coffers of Big Pharma, the fact that you are probably also reporting in your own analysts’ reports, and what has almost disappeared from people’s front mind was the patent cliff. When I started at the beginning of the late nineties beginning of the 2000s, the patent cliff was a big question. Everyone was talking about the patent cliff. And that sort of went, also because pharma bought or developed drugs that sold this patent cliff. If you think about, PD1s and a number of other major drugs that were not there 20 years ago. Today, people talk about PD1s and other huge categories going basically towards the end of that patent life and that cliff becomes an issue again.

So forget about the market for two seconds it’s bad enough, but think about this: how important biotech has become to developing drugs, how much biotech has become important in the relationship with Big Pharma, how much it has become important to Big Pharma, the fact that they have the cash to buy or develop those products going forward and that they have no other choice but to do it.

That’s the optimistic view on the world, then we can talk about some of the not so pleasant stuff if you want.

00;08;02;02 – 00;08;25;24

Dylan van Haaften

I’d like to keep to only pleasant stuff, Antoine, there’s enough nastiness out there. But I think you touch upon a very interesting point here. Which is, you know, on one hand, the sector, there’s more optimism than ever. There’s a coming of age if you will. There are more biotech companies than ever. Over the last eighteen months, we’ve seen, I think roughly over 100 IPOs come in and in a certain way the current cash to market cap in the sector reflects that the biotech sector as a whole has never been more funded. On the flip side, with 20% of companies trading below cash, below cash value, that sort of reflects also that there’s a certain cheapness to it. In that context, one of the things that surprised me is that we haven’t really seen consolidation happen to the same extent as we might have expected, given sort of the current pricing.

Maybe consolidation isn’t as price sensitive. We’ve seen organic R&D budgets expand, you know, with Astra increasing R&D roughly 30 to 60% last year and in lockstep, we’ve also seen more buyback capital being deployed. Is in your view, pharma kind of missing a generational opportunity here to consolidate, buy and get very interesting early-stage assets. And in your view, will that still happen?

00;09;18;14 – 00;09;47;07

Antoine Papiernik

Well, I would say all in good time. You know, we’d love to have this now because it’s important now, but all in good time. It will happen. First of all, the hundred companies that went public, this is so 2021, if not 2020, we’re in a different environment. What it means is a lot of companies raise a lot of cash, one. Two, the people investing venture have raised, us included by the way, a lot of money.

So that is the positive inertia. There’s a lot of cash in the system still. And we can talk about the flip side of that in a second. But there’s a lot of money in funds that have raised over the last two years and that money will be deployed in new things.

They will be deployed in new company generation in sustaining our company, in our portfolio companies. We have 100 portfolio companies at Sofinnova. We pay a lot of attention to try and figure out what’s the right path for each of those companies.

The early-stage investors have the money to sustain. The situation today in the public markets means that with hundreds of companies below cash, we need to be particularly vigilant about how we fund our companies going forward. So valuations today have dropped considerably on the public markets. People are throwing out the baby with the bathwater, selling on positive news, ditching on negative news. There’s no bottom right now because no one’s listening and it’s a frightening situation. But this as I said, a moment in time. And I am certain from this after looking at past experience, we will find that situation, that homeostasis in biotech terms, where ultimately things have value, our companies have value, they have patents, and they have drugs in clinical development. The worst is not certain, they will generate positive results. Think about ASCO and some of the great news we’ve heard at ASCO in Chicago in the last few days. Innovation is not stopping because the public market is not behaving as we would want.

So that ultimately is the silver lining of our sector. Valuations of public markets create this disconnect. You can imagine all the private guys, we look at our companies and we think nothing’s wrong with this company. We have a great management team. We have great results. We’re well-funded for the next three years.

Why should we, you know, take money at a lower valuation than the one we have now in the private market? We know we can’t access the public market. So we need to find other solutions and we need to make sure our companies are funded for longer. It’s all about making sure our companies are prepared for this drought.

But as long as you do this and you are able to cross that chasm, and our companies provided they get the clinical results they’ve promised us, we’ll be fine. Those that are caught in the middle, you know, won’t be fine. And anyone who thinks that they should put their hands on their ears and shut their eyes are delusional and will suffer greatly.

As I said, we have 100 portfolio companies. They’re not equal. Some of them, even if they are great and at the same level, they’re all meeting their plans, those with money are being careful but know that it can last three years from today. If you know you have cash for three years, I think you’re going to be fine.

00;14;14;29 – 00;14;25;04

Dylan van Haaften

Understood. And you touched upon the cash in the sector and all the money that’s been raised in the private side. And you said there is a flip side to it. What did you mean specifically with that comment?

00;14;26;10 – 00;14;58;25

Antoine Papiernik

Well, the flip side is the delusional side. If you’ve got cash, you could pretend that the world hasn’t changed and that could be a good thing if indeed you’ve got the means to carry through those companies. Even if you have the means, you have to act quite clearly in the boards of those companies to change the way that the management team and the board behaves in order to protect as much of the upside as you can.

If you feel you’re secure and you’ve got the cash, and you pretend this is just a bad moment, that it doesn’t concern you, I think you’re going to have a surprise. I would say every one of our boards today, every partner at Sofinnova, we have 17,  every partner in every board is having those discussions with management.

It’s very basic. I would say: ‘OK, you know, this is a difficult environment you either public and you worth one 10th of your valuation before because that’s the case or your private and you can’t go public. How do you access the cash? How do you make sure the cash you have serve as long as humanly possible?’. You need to act now in order to preserve. You shouldn’t change strategy. But you know, the world has changed and it’s going to be different not for six months. It’s going to be different for two to three years in my humble opinion.

00;16;03;15 – 00;16;28;05

Dylan van Haaften

That’s a very interesting view. And we talked about sort of the past, sort of 20 year view, give or take a few years. I think one of the things that people have cited is that maybe the gap between valuation, the fair valuation, as you said, and the actual valuation in the public markets is maybe at a position where M&A is kind of off the table because people know what they’re worth and pharma know what they’re willing to pay.

And there’s been speculation that licensing is making a return. How do you view licensing options today in the context of the fact that you can take assets farther than ever in this maturity of the biotech sector? Is there an impetus to license or is there really an impetus to just keep your head down and do the work and get to maybe a later stage inflection point than you could have done over sort of the previous sort of three cycles in licensing?

00;16;55;12 – 00;17;17;13

Antoine Papiernik

Well, following up to my comment on the five hundred billion of dry powder that’s going to be spent like this, by pharma. And it’s obvious also because valuations were high, nice, low and the same guys: ‘OK, you know, we need the master. Just show us the data.’ And honestly, it’s a fair comment.

You know, we need to provide the data. Even with data considering the current market, for sure pharma will try and buy the assets or access the assets through partnerships. It’s common sense. This is what I would do if I were in their position, until, of course, it’s an asset they really, really want and then there’s competition and then they’re going to have to buy it. We’re not there, clearly.

To answer your question: yes, partnerships today are the flavor of the month and I think if a big pharma or big biotech is interested in a partnership, I think for cash upfront and earn-outs as you go along, then boards are looking at this very seriously and they should if you can afford not to do it, OK…

But I think in the next period and you are a private company and you want to go public, then having multiples partnerships-  it’s the good old times. Partnerships were validating in many ways and they are back in fashion. And of course if you have Lili, Astellas as a partner in one of your companies, then the analysts and ultimately investors will see that as a validating position if you have not sold the main family silver, which always is the issue, you should do it.

00;18;56;16 – 00;19;20;19

Dylan van Haaften

Excellent. And then I think you already touched upon the key thing. When I speak to BD teams, they always say they’re looking for assets or they’re also looking for management teams. Is there something that has become sort of a higher priority? And how do you look at that specifically in the context of Europe? Because in Europe one of the comments that have been said is that there’s maybe not enough good management teams to lead some of the science here in Europe.

Has anything changed in that perspective? I know I’m asking sort of two questions in one, but how do you look at that in this way?

00;19;26;25 – 00;20;01;23

Antoine Papiernik

Let me try and answer. Thank you. That’s a very important question to me. I’ll answer the second question, because also I have a 25-plus year view. The progress that we’ve made is amazing. At our offices you’ve got the pictures of the entrepreneurs that made money for investors and there’s a lot of them and some of them are here in two or three pictures, which tells you that the European breed of entrepreneurs has progressed.

They’ve managed to make money and sometimes more than once. And that’s a very good sign. But things are slow. This trend of generating talent is slow. It’s accelerating. That’s the good news. But Rome was not made in one day. It needs generations for those to be born and then to show a track record.

But we’ve also learned in Europe to leverage the talents in the US. Every one of our companies that we form in Europe, whether it’s in Paris, in London, and in Milan, in Copenhagen anywhere and across Europe, we build management team that are truly global, international and wherever those people are.

In a way, Covid has made that even easier in many ways. I have countless companies in our portfolio where the management team is split between Europe and the US. If you need to look for a CMO, if you need to look for a CEO, if you need look for a CFO… all the C-suites in our companies are split. We are not saying today well the company’s in Paris therefore everyone needs to be in Paris. In London, its maybe more complicated to organize, but I can give you many different examples like Mnemo. Mnemo  is one of our companies, Paris-based. It’s an oncology company spun out of both the Curie Institute and Memorial Sloan-Kettering where we have two offices on both sides of the Atlantic. The CEO is in New York, the COO is in Paris. The CSO is in is in New York. We split the teams where we can find the best talent. If you are ready to do that: meaning build your companies from scratch like a Boston-based company, happens that your headquarters is in Paris, Milan, London, Copenhagen, then you can tap into best of both worlds.

The best C-suite where you can buy it. The best R&D. And by the way, Europe has something special because it’s a lot cheaper than the US particularly at this complicated time where people have been paid from Boston to San Francisco very well, probably 30, 40, sometimes 50% more than anybody in Europe.

Well, I think Europe has something else to offer. From the ugly little duckling, Europe, how do we become Boston? In this current timeframe, we have actually a few cards to play where as long as we are ready to think global, we can leverage the best sides of the pond.

00;23;07;01 – 00;23;48;06

Dylan van Haaften

I’m excited about that. I’m always rooting for Europe as a European. I’m happy to hear that. Speaking of thinking big, one of the things that people are probably eager to hear about is this trend that has been ongoing with the PE VC, which started with LSP EQT, which kind of made sense because they were working together for a long time and LSP wanted more fundraising infrastructure Abingworth/Carlyle and also with you guys and Apollo, could you maybe tell us a little bit about the rationale here about this is Sofinnova going to be an even more global powerhouse.  What does it afford you? I’m interested to hear that.

00;23;52;25 – 00;24;21;03

Antoine Papiernik

Yes. In fact, it started in 2018 when Clarus was bought by Blackstone, this is where I thought: ‘wow, this is happening’. Maybe it was 2016, but it was five or six years ago. And I thought to myself: ‘the big asset managers clearly are underweight in our sector and want to do more.’

And that’s the first instance where I thought: ‘OK, we need to pay attention here.’ And of course we’ve seen a lot of our colleagues coming from the large asset managers. If you think about General Atlantic or KKR, people doing their home grown, I would say teams to invest more suddenly in the late stage of our segment, but still coming.

Since they are very clever, very diligent people I personally thought and the managing part of Sofinnova thought OK, the writing is on the wall: these guys will find a way because life sciences is so important. And Covid was an accelerant clearly in that thought because if you think about BioNTech or Moderna companies were a few billions in market cap at the time when Covid hit. Look at what happened: tens of billions of market cap later, plus companies generating turnover and profits.

This is a moment in time where that big asset managers who are investing a very small fraction of their AuM in healthcare and certainly not in the innovative part of life sciences are all thinking: ‘we need to be present in that segment’. It isn’t elements taken like this in a vacuum. It’s a tectonic plate shifting.

These guys have understood how important our sector was and therefore what’s behind in general. Now for us, it started in a very simple manner. We were growing, we have been growing quite a lot. We went from 1 billion five or six years ago to two and a half billion with the management today.

And like any company growing, you were thinking how I’m going to fund this growth and this growth allows you to build the firm to bring the talents you need. And we felt the urge to make sure we were funded, and we had more resource, including LPs that were able to come into our fund, bigger LPs, able to come into potentially bigger funds on the platform.

That’s the rationale for us. This is a process we started two years ago. Then we met a lot of people. And we were actually very happy to see that we had a lot of interest from various financial institutions, including the asset managers, the alternative asset managers. And this is when we discovered Apollo Group, too be clear, I didn’t know it very well. I barely knew them. When we met them, what we really liked is that we took a position which was slightly different from our colleagues by saying we want to remain Sofinnova, which has been going on for 50 years. Independence for us was a key element.

So we told the group we were not for sale. We were looking for a partner that would fund us and put money into our plan. This was the premise of all the discussion that we’ve had with a numerous number of parties. And it happens that Apollo really clicked with us because they were thinking the same.

In this new field for them, they thought it would be better for them to be a minority partner and learn on the way while bringing all the things that they can bring to us. And that’s how this partnership was born. Independence for us;  growth, because of course, they were not only bolstering our balance sheet at Sofinnova but also committing to the funds and you may have seen the number of they’ve committed up to €1 billion into the various funds that we have on the platform today or future funds that we might create with them.

That’s really the gist of the partnership. And of course, the beauty for us is that Apollo has 500 billion plus, 513 billion under management today. They have 1500 LPs across the world that have been working for 30 years for some of them. It’s also door opening for us. You were referring this while mentioning the other deal to a world of investors and LPs in our funds that we don’t have access to today.

Independence while being able to grow and growing means raising new funds convincing new LPs to follow our strategies. That’s what this deal allows us to do. So you can bring it back to what happened over the last six years between the Blackstone acquisition of close to the partnership that we’ve struck with all the other bits in the middle.

But ours has a particular flavor that I just described.

00;29;34;29 – 00;30;00;17

Dylan van Haaften

Understood, and one of the interesting things I’ve also heard is that there’s different funding structures going on. One of the things that, for instance, Abingworth has been doing with the launch fund is doing later-stage almost debt-like structures. Is that something, are you guys going to stay grass roots sort of company builders or are you moving into other shapes, other forms grown with your companies farther?

Is that the ambition? Is it the funnel or is that the end of the funnel?

00;30;04;11 – 00;30;27;28

Antoine Papiernik

It’s the beginning to the end of the funnel, because the first thing is that you cannot change what has worked. It would be a bad idea to change what has made Sofinnova work over the last 50 years since the company’s creation. We have incubator acceleration funds from medical devices to biotech across the world from industrial biotechs you know, all of this is really part of who we are, so we are not going to change that.

But more generally speaking, the ability to bring your companies further towards becoming real companies that actually make a top line and a bottom line. That would be the ideal and it’s not impossible. It has been done. We have done it. The question is: in order to do this, you need to have more funds. And it could be different in the categories of funds you mentioned Abingworth and their launch fund and something which is more credit-like, all of this is part of what needs to be done in order to propose our portfolio companies and I told you, we have 100 portfolio companies today, you know the toolbox that they need in order to grow.

00;31;22;26 – 00;31;42;10

Dylan van Haaften

That makes a lot of sense. That armamentarium is expanding. And obviously there’s no shortage of good companies right now. One thing that’s been said before about Boston is that purely if you look at rents in Boston, it’s becoming a complicated situation to do innovation, if you look at the overhead and clearly Covid has changed things.

What do you believe? You know, just putting our negative hat on again, for a second, what do you believe are some of the key things that are likely to become an issue? Do you think regulation, for instance, in Europe with the MDR, it becoming an issue? Are there any things that you think that any clouds coalescing in the future which can hold back innovation today?

00;32;09;23 – 00;32;42;16

Antoine Papiernik

Well, you know, you’re hitting a nerve here with MDR on the MedTech side. I wouldn’t say the battle is lost, but I’m not very positive on that front. And I’ve said it publicly before. I think we’ve shot ourselves in the knee big time. Europe was the place where everyone would come to develop their medical device, including commercially.

As an example from my distant past, CoreValve was born as a Paris-based company. We proved the model not just clinically but commercially in Europe. The American patients had the device five years later because it took five extra years for the FDA to actually get this approved. Unfortunately, the tables have turned completely, and the MDR is the difficulty for our companies, for everyone by the way, not just our companies. For Europe to get their act together in ways that helps innovation means that today it’s just a fact when we have a Paris-based medical device company, if you think about CoreValve, 20 some years ago to today. The first place where we will develop the device clinically and commercially is in the US. We may do a few patients here. I say Europe is becoming like Panama. Sorry, Panama used to be the place where you do the first few patients just to see if it works.

This is unfortunate. Maybe it’s not too late, but this is for politicians to take the full realization, that Europe, and as well as a European, I want Europe to succeed. If we want to build giants from Europe in that field. It’s not biotech. It’s purely MedTech. Wow, we have just damaged the situation in which we were, and I think its going to take a long time and energy and political willpower to change that situation.

On the biotech side, I would say we are on par, we are building and to the point on talent, the regulatory situation today we are taking, it’s difficult everywhere, but we are taking the view, where is it best for this company wherever their headquarters are in Europe or the US, where is it that we need to develop this this product, which patient population, which country? What’s the regulatory path, the reimbursement path? And I think Europe is not a bad place compared to what I just described on the on the device side.

00;35;12;25 – 00;35;42;06

Dylan van Haaften

Thank you very much. We got one question from the chat, which is also, I’m hopefully not going to hit a nerve. The question is from Olga. While public investors are eagerly waiting more M&A licensing deals to the sector due to significant decline in valuations, there is another point of view that pharma does not care as much about price, but rather the quality and fit for its portfolio, suggesting that current market situation does not necessarily present a unique opportunity for M&A activity, maybe reflecting that there’s lower quality companies on aggregate out there today than there might have been before when there was more M&A activity?

00;35;51;02 – 00;36;11;00

Antoine Papiernik

No, I think the point is pharma is interested in quality. At the peak, a board, the champion of a deal would have a problem if the premium paid on the stock price was over a certain multiple. And therefore, that’s sort of an egg in the face issue, if anything, happens.

This is the path. Today, its logical, its normal for Pharma to say show me the data. And if the data is good, then for our companies, for the board of which we sit to create the competitive nature, the competitive process that will also ultimately lead to several big pharma biotech wanting to invest.

We are not there. We are not here, clearly. But that will happen. I would say that’s going to come back in the next 12 months because there are great quality companies out there. They’re all in the clinic, they’re all developing their products. And again, I was mentioning ASCO. You see, if you have the means to develop your drugs and then you hit your primary endpoint and it’s transformational for patients and the field, then they will be interested. There has to be interest.

We need a bit of patience and therefore we need to go back to the original comment. We need to prepare our companies to be patient. If you have no cash, you can’t be patient. If you’ve got cash or means to see another day, ideally another year or two, and you hit your milestones, then you will have interest from big pharma and if they can’t access it cheaply by doing a deal, they will have to buy it.

It’s up to us and on our companies to perform. And when that happens, and it will happen I think M&A will become much more prevalent.

00;37;57;21 – 00;38;15;17

Dylan van Haaften

Excellent. And so a final question from my side, maybe drilling in a little bit deeper. What are some of the therapeutic areas or MedTech areas where you can see real movement? What are the things that make you really excited? Maybe some things we haven’t even heard about because they’re still coalescing in the private realm.

00;38;17;18 – 00;38;48;23

Antoine Papiernik

Well, one thing that Covid has transform and it was a lot of hype before Covid, but it has transformed the field of what I would describe as digital medicine, not the broad digital health field, but the more specific tools and products ultimately that will transform the way that pharma, MedTech, everyone is developing drugs, even pharma, even the way that drugs are being provided to patients.

That whole field of digital medicine is one where I see transformational power onto the industry, but also ultimately to the benefit of patients. That’s a whole field that I think is still, after the hype has sort of evaporated, there’s a core that can only be done by those who understand the pharma development rigor. The fact that we are in a regulated industry, it’s difficult to do what we do. But those who can find those digital products that will make those products be bought quicker or be better or more adapted to a particular patient population, or will help in compliance of the patient. All of this will have a major impact ultimately on that system.

That’s one big field. Otherwise, I’m afraid that I’m not going to be a crystal ball here on technologies. And you’ve heard that all before. There is a huge push on gene and cell therapy today. People are pausing a little bit. If you think about the current view is: ‘oh, my God, it costs a lot of money to develop a product in this field.’ Manufacturing is key. A lot of companies got caught with big manufacturing issues. I would say it’s growing pains of gene and cell. I think gene and cell is here to stay, it just needs to be slightly different than the first generation of companies and the focus. People say the process is the product. It’s clearly those modalities are more complicated. And therefore, you need to put a lot of weight on processes in addition to meeting your primary endpoint.

When I look at some of the companies in genetic editing, the first few results are actually very promising in this field. It’s going to take another five to ten years. But those are new varieties that are going to be very important going forward. And then in terms of indications, cancer kills people every day. And ASCO, again, just demonstrates to you the huge potential there is in innovation to treat cancers that are today badly treated.

Even immunotherapy is still not a magic bullet for every indication in every cancer type. There is a lot of progress to be done in our companies that will develop those products tomorrow.

00;41;44;09 – 00;41;57;07

Dylan van Haaften

Excellent. Thank you very much. That is a very bullish comment. And I agree. I think the news coming out of ASCO almost feels detached, especially what’s happened with HER2 was quite stellar. It feels like a watershed moment to a certain degree.

00;41;58;00 – 00;42;14;12

Antoine Papiernik

Yes, but we should focus on that. It’s like sheer innovation. Look what happens, patients are being treated that would have died before. That’s the beauty of that field. And all we need to do is focused on those.

00;42;14;21 – 00;42;29;12

Dylan van Haaften

Excellent. That’s a great place to actually stop the webcast because it’s a very positive note and we started on a positive note. Antoine, it was great talking to you and getting your insights and you’ve been a great inaugural guest.

00;42;30;11 – 00;42;30;25

Antoine Papiernik

Thank you.

00;42;30;25 – 00;42;52;13

Dylan van Haaften

I wish you a lot of success in building new companies because obviously that means for us at Bryan Garnier, there are exciting companies coming through the pipeline and that’s what we want to see and thank you, everybody in the attendees. Thank you very much. And I hope you will join us again in next month’s edition of On the Money.