Christine Brennan visited campus last week to speak about acquisitions at a biotech venture capital panel at the Analyn Center as part of the Yale Innovation Series.
After a career in academia, consulting, and management, Brennan now serves as Principal at the Novartis Venture Fund, an evergreen corporate venture fund. The Novartis Venture Fund is the venture wing of Novartis, a Swiss pharmaceutical firm, and one of the largest corporate venture funds in the world, with over $750 million under management.
The Fund is stage-agnostic and employs an evergreen model, with all gains re-invested into the fund. Unlike other corporate venture funds, the Novartis Fund acts independently of its parent company and invests in ventures across the biotech space without securing options to acquire invested companies, said Brennan.
Like most life science venture capital firms, the Novartis Fund is highly selective, signing only four new deals out of hundreds of candidates in 2015. Through its investment methodology, Novartis has generated exceptional investment performance. Over the past five years, 11 Novartis-backed companies have been acquired and 7 have successfully completed IPOs.
Brennan said that Novartis’ investment strategy breaks down into four essential parts: a foundation of science and technology, a clear path to commercialization including passing regulatory checkpoints and outlining reimbursement financing, an unmet clinical need and benefit patients, and, most crucially, a good team with experience in management, research, and medicine.
Valuation of the Funds’ portfolio is also crucial, said Brennan. In addition to biotech companies that commercialize new, groundbreaking technologies such as CRISPR. Novartis also invests in companies in more traditional sectors of biotech to get better valuations.
While Novartis invests primarily in pharmaceutical companies, the Fund diversifies its portfolio through investment in medical device and diagnostic companies, which take longer to get to market and enjoy lower profit margins.
As a venture capitalist, part of Dr. Brennan’s job is to anticipate future changes in the industry.
Looking ahead, Brennan sees the growth of digital health, continued commercialization of new, groundbreaking technologies, and increased corporate partnerships with medical device companies. “Big data and digital health are on track for great growth,” said Brennan.
The digital health market is one of the fastest growing sectors in biotech and is expected expected to reach $55.3 billion by 2020, according to Research and Markets. In addition to digital health, Brennan sees further growth in immuno-oncology and CRISPR pharmaceutical companies as these technologies mature. In the medical device space, Brennan says should expect to see more corporate partnerships between large biotech firms and smaller medical device companies as pharmaceutical companies diversify their business operations.
Here at Yale, Brennan believes the University will continue to be a leader in biomedical research: “Yale is an up and coming spot for biotech and critical part of the Northeastern biotech corridor,” she said. Just this year at Yale, Dr. David Spiegel, Professor of Chemistry and Pharmacology launched Kleo Pharmaceuticals, a new immunotherapy startup and the $10 million Blavatnik Fund was founded to advance entrepreneurship in the life sciences at Yale.
With great growth prospects for biotech there is an increasing demand for jobs in venture capital yet, Brennan cautions that it might be challenging to enter the sector. With a limited number of positions available, experience and education are key to entering biotech venture capital, she said.
Senior venture capital positions are often given to experienced executives at biotech companies while entry-level associate positions are given to recent Ph.D-grads or biotech consultants. Brennan advises undergraduates and graduate students interested in the sector to attend events hosted by local biotech organizations to learn more about working in biotech venture capital.