Joël Jean-Mairet, managing partner of Ysios Capital, explained how he sees this crisis from the perspective of a venture capital fund and warns that continued investment in healthcare innovation is more necessary than ever.
Joël Jean-Mairet is the managing partner of Ysios Capital, a Barcelona-based fund that specializes in the life sciences. A biochemist with a degree in cell biology and immunotherapy, he co-founded GLYCART Biotechnology AG (Switzerland) in 2001 and was CEO of the company until it was acquired by F. Hoffmann-La Roche Ltd in 2005. At Ysios, he was on the board at Biovex (now AMGEN), chairman of the board for Cellerix (later TiGenix) and a member of the board at TiGenix (now Takeda), AM-Pharma, MedLumics and Dermalumics. He is currently chairman of the board at Inbiomotion and also sits on the boards of Aura Biosciences (Boston) and Sanifit (Palma/San Diego).
We get 10-15 new opportunities each week from all over the world to assess, and that hasn’t changed for now. We have, however, noticed that we’re getting more projects for antivirals or vaccines in the past few months, and that is clearly related to Covid-19. But most opportunities are still in oncology and the central nervous system.
Since the crack in March, we’ve stopped fundraising because all the investors have other concerns right now, beyond new venture capital commitments. But that doesn’t affect the size of our new fund, planned for €200 million, because a significant part of this is already committed and we expect to get back to our usual fundraising in June.
The Covid-19 crisis has to remind us of the need to innovate in the life sciences. We also have to remember that biotechnology is an asset that isn’t correlated with the market: it doesn’t depend on demand because the companies don’t sell anything. They aren’t leveraged because they are venture companies that don’t have to be leveraged, so they are businesses that live solely off equity or capital injections to advance their clinical program. In fact, if we look at previous crises, the biotechnology sector has always fared pretty well, and investors see that. That’s why, when they can analyze it calmly, they’ll see that biotechnology is a very interesting asset to have in their portfolio.
No, in fact we plan to close some before the summer. And we aren’t having a problem finding partners to co-invest, national or international. If they can invest, venture capital funds will keep on investing in biotech companies to cover unmet medical needs, which is their investment target.
We can distinguish two groups of companies: those already in our portfolio and potential investments.
In terms of new investments, I can say that there will be bigger operations, because in the face of uncertainty there is a tendency towards larger rounds to fund companies until they have very robust data that can attract pharmaceutical corporations.
Regarding companies in our portfolio, one of the short-term effects of Covid-19 will be to review the budgets for this year and next very carefully to keep as much cash as possible to face delays. In this situation, there are companies that won’t be able to carry on with their research as usual (for example those in the clinical phases) and they’ll see delays of 3-6 months that they have to be able to cover.
Yes, there may be specific interest, but developing vaccines is a long, very complicated process. That’s why this sector will never be as popular among venture capitalists, because they are very specific therapeutic areas that are difficult for small companies to handle, so it is usually done by large pharmaceutical corporations. In terms of antivirals, we’ve seen a rebound these past weeks: some of our companies are studying the option of launching new lines of research focusing on Covid-19 and we’ve seen a variety of new opportunities.
As I was saying, this situation has to remind us of the need to innovate in science and biotechnology, because there are many unmet medical needs and there will be even more. Plus, there are outbreaks like the current Covid-19 one. Moreover, as a sector, it isn’t tied to financial crises, it is based on fundamentals, and that is attractive to investors.