In Vivo's Barnaby Pickering interviewed Sofinnova Partners' Chairman and Managing Partner Antoine Papiernik, along with Simon Turner, a Partner in the firm’s recently launched Digital Medicine Strategy, as he took a close look at the way the firm makes investment decisions.
Papiernik explained that while most VCs shy away from investing in capital equipment, Sofinnova has found success defying this "commandment" by investing in seemingly risky medtech ventures. The key, Papiernik explained, is Sofinnova's focus on people and science.
"We have a team of scientists-turned-investors that right from the start are able to speak to start-ups in their language and are comfortable with what is needed to take an idea from an academic paper to large private, pre-IPO or even public company,” Papiernik said, adding that the core team has a vast network of experts to help them analyze the more than 2,000 potential deals that come through the door every year.
The focus on people extends to a constant search for those with great potential. "Sofinnova looks for the 30-year-olds who will be leading their fields in their 60s," he explained, "these are the next people who are going to invent something like CRISPR or a new gene editing technology."
Papiernik cited Shockwave Medical, founded in 2009 and now worth more than $10 billion, as an example. Sofinnova was its first institutional investor, and the reason for that is that Papiernik already knew and trusted some of the people involved. As he examined the company's technology, which uses pressure waves to break up calcification in blood vessels near the heart, he asked himself, "What if they are right?" Focusing on that question leads one to calculate how big a contribution the technology will have on healthcare, on patients.
"It's not that Sofinnova likes risk," Papiernik told Pickering. "We just look for opportunities where if we are right, the impact, and the return, will be massive.”
During the pandemic, a lot of VC funds went into telehealth. The rush to invest caused a bubble that eventually burst, scalding quite a number of fingers.
Turner, the Digital Medicine partner, said Sofinnova's measured and watchful approach helped it avoid getting caught up in that. He and others at Sofinnova noticed that digital technology was being used to transform how care was delivered, but not what care was delivered.
He explained that the Digital Medicine strategy was focusing on three areas: enabling technologies that will allow Artificial Intelligence to be developed in the healthcare context; precision medicine, or finding the "right treatment for the right patient at the right moment in time"; and technology that will contribute to changing patient behavior and incentivizing patients to follow the correct treatment path.
The post-COVID landscape "illuminated so much that was problematic with how care is delivered," Turner said, pointing out that the consequences in terms of rising spending, supply-demand mismatch, and physician burnout, were grave.
Poor go-to-market strategy has meant that many digital solutions over promised and under delivered, he said, adding that Sofinnova Digital Medicine was focusing on finding "the right technologies, the right channels, and putting them together."
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