PharmaTelevision - Index Ventures, GSK and Johnson & Johnson launch exciting new Venture Fund

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Video title: Index Ventures, GSK and Johnson & Johnson launch exciting new Venture Fund

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In this interview, filmed in Amsterdam at BioEurope Spring 2012, Fintan Walton talks to Francesco de Rubertis of Index Ventures, Paul Stoffels, Worldwide Chairman of Johnson & Johnson Pharmaceuticals and Moncef Slaoui, Chairman of Research and Development at GSK about the launch of Index Ventures' new fund, IL

Index Ventures's new fund with participation of GSK and J&J

Fintan Walton:

Hello and welcome, today Index Ventures announced a new fund a 150 million Euro fund which has the participation of two major pharmaceutical companies Johnson & Johnson and GSK. So today I talk to Francesco de Rubertis who is partner at Index Ventures as well as Moncef Slaoui, Chairman of Research and Development at GSK and Paul Stoffels who is Worldwide Chairman of Johnson & Johnson Pharmaceuticals.So Francesco could you tell us more about the actual venture fund you've just raised.

Francesco de Rubertis:

So the novelty is really in the fact that for the first time in an Index Ventures fund we have two pharmaceutical large companies as investors and that is really very exciting for us because it's an important commitment both in terms of cash but in terms of also most importantly in terms of people because we will have Moncef Slaoui and Paul on the scientific advisory board of the fund and of course is the what really excites me most because this is the place where we will create the interface between these senior very experienced and important leaders of the industry to the young scientific entrepreneurs that are starting up their own companies and would be super exciting for them and I am absolutely convinced it will be super exciting for them to interface every few months in small sessions in short sessions with these people so that is really what is very exciting and novel in our approach.

GSK's perspective: Idea and importance of the fund

Fintan Walton:

And of course to take on two major pharmaceutical companies to get them to come together to agree on this is quite significant, Moncef you are obviously a visionary in terms of how R & D should be done you've made a lot of changes at GSK, in this particular case why was this important for you?

Moncef Slaoui:

So this is one of many approaches we are using to access diverse of ideas and entrepreneurs to make medicines and we do what was attractive and very special here is the asset centric strategy that is pursued where in fact it's a mean to focus the minds and energy on advancing a medicine rather than building infrastructure so its very lean and very effective and secondly frankly it's the track record and the network of academic centres and entrepreneurs that Index has including the drug hunters that are going to be key entrepreneurs helping those companies that would be invested into and finally the vision that Francesco shared with us and the idea of partnering also with J & J Pharmaceuticals in such an innovative trailblazing approach is frankly also very exciting and we really look forward to it.

J&J's approach and involvement in the fund

Fintan Walton:

And of course Johnson & Johnson Pharmaceuticals has got a long history in having its own venture capital fund through J&J DC and why again for you Paul is this important why do you need to actually work with another major pharmaceutical company to get involved in a fund like this?

Paul Stoffels :

Well its to get several different approaches and we are doing our own venture capital approach into companies this is another window on the world for us collaborating with a strong venture capital partner in Europe gives us access to a view on what's happening here but it combines that with the asset centric approach where we can help a lot first of all I think we have lot of experience in failures we know where not to go and also lot of winners what to select also on what we have as capabilities on the amount of the companies we are prepared to share some of our capabilities and then the learning on doing the (indiscernable) experiments first on what is the minimal investment you do to get to the best answers to learn that you have in assets which can go forward is something which brings all the experience bringing us together brings all the experience of venturing a pharmaceutical together to get a better and faster of new molecules to development and that overall approach we think and I think should give a better return on investment and but also result in more successful companies and we hope that we can help to get more successful ventures established.

Focus and strategy

Fintan Walton:

So Francesco more all the game of risk venture capitalists run the game of risk pharmaceutical companies run the game of risk risks has changed and this because of this change is that the reason why now venture firms have to bring on pharmaceutical companies in order to raise the funds you've raised a 150 million Euro fund, was that really a prerequisite for you to join to get to raise that level of money?

Francesco de Rubertis:

Not at all actually I mean it's really very important to specify that the reason why we have Paul and Moncef around the table is not because we were almost going out of business and we needed some angels to rescue us the things were going well the asset centric model is validated, we have a track record that makes it validated and we decided to bring it the next level in the discussions that naturally started to originate as we knew each other from business dealings and we had this idea why don't we bring this to the next level and of course this is the exciting part which is a partnership out of strength not a partnership out of necessity because that would not really lead anywhere, so this is very important actually it is a important question, I had to do convincing on my partners to really accept for the first time to have a life sciences focused only fund because of course it was noting Paul or Moncef in there it is to have a part of their cash invested in mixed end fund which invests half of it or even more than half of it in social media which is great but is not the purpose, so once we came up with this idea I really had to find good arguments with my partnership that clearly understood it very clearly very quickly and was very excited of the caliber of interest more than the cash the caliber of interest when I could tell them that Paul and Moncef were going to be on the SAB together with their two senior colleagues it was saying okay so here is something serious let's give a real chance to this even though these changes this means that we have to change slightly the structure of organization of our funds that we have had for last 15 years.

GSK's strategic point of view on fund

Fintan Walton:

I suppose we want to emphasize the independence that both J & J Pharmaceuticals and GSK have, they don't have any pre agreed options on any of potential acquisition or any licenses to any of these investee companies, so from you Moncef from your point of view I mean how important is this from a strategic point of view? Obviously it appears that there is no direct strategic influence on the fund but how important is this from general strategic point of view for GSK to get involved in supporting funds like this?

Moncef Slaoui:

Actually very important. I will tell you my perception or our perception of how this fund looks to any entrepreneur, this fund looks to an entrepreneur as an opportunity to access capital with the knowledge and knowhow of inside the experience of two large pharma companies we are talking about may be 30,000 scientists and thousands of years of experience of making a drug from discovery all the way to an approved medicine without actually partnering from the starting point with a large pharma company in other words where you keep your freedom to play the market dynamics and if you are successful you will be successful and then the markets would define exactly what's your reward is. I think it's an incredible opportunity and we were very excited about it because we expect and we will work hard to make that happen that a lot of great entrepreneurs and scientists with great ideas are going to be attracted to this fund and therefore we will get exposed to them, we will help them drive their ideas and then we will compete if those ideas are really of interest to access them we will compete between ourselves we will compete with all our other competitors in the industry and that's the best interest of the fund to the best interest of the company and either because we will enter into a deal to our best interests or because we are in help each in our best interest. So I think it's really a win win win for everybody around the table.

Paul Stoffels 's perspective: Capital management and market expectations

Fintan Walton:

And Paul finally for you, you've been experienced in research and development in pharmaceuticals for many years, the world has changed and we all hear about how pharmaceutical companies rely more on external research and development, the funding cycles has been tough, the capital markets are tough, so from a J & J Pharmaceuticals point of view and from your personal experience point of view how important is this latest development and what else can our industry do to insure that as we all like to see great medicines get to the market?

Paul Stoffels :

Well I think what I learnt from my life is to get as efficient as possible with resources and with capital and bringing the most value with least possible amount of capital and that is what the market expects from us from a large pharma from the venture capital environment and how can we bring that know how experience and management capabilities management experiences together to make this happen in a most efficient way and above I think venture capital will learn from it we will learn from it but it's about our objective I think to get as efficient as possible and again as I said earlier it is on what questions need to be answered, where do we find the experience and the learnings to not to mistake twice and make sure that all is brought to bear to make sure that we bring as efficient as possible molecules forward and that in the end will yield to return on investment to have money flowing back into our business and that's what we need to have in the venture capital environment and large pharma environment.

Fintan Walton:

Well I like to thank you all three for coming along and telling us about this new fund and congratulations we look forward to seeing how it performs, Thank you.

Fintan Walton

Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).

Francesco de Rubertis

Partner

At the time of this PTV interview, Francesco de Rubertis serves as a Partner in the Index Ventures's life sciences practice. He joined Index Ventures in 1998 and has served on the board of numerous companies including Genmab, Bioxell, Addex, Parallele, 7TM and PanGenetics. Prior to joining Index, Francesco was involved in post-doctoral research in genetics at the Whitehead Institute, Massachusetts Institute of Technology (MIT). He is also the author of several publications in international scientific journals. Francesco has a BA in Genetics and Microbiology from the University of Pavia and a PhD in Molecular Biology from the University of Geneva. He is also a CFA charter holder.

Paul Stoffels

Chairman

At the time of recording this PTV interview Paul Stoffels serves as Worldwide Chairman, Pharmaceuticals, at Johnson & Johnson, with responsibility for research and development, business development and global strategy and innovation. In this role, he leads global teams across Janssen to discover and develop new and innovative treatments for unmet medical needs in the therapeutic areas of cardiovascular/metabolic disease, immunology, infectious disease/vaccines, neuroscience and oncology. Dr. Stoffels has more than 20 years of global experience in both pharmaceutical and HIV/AIDS research and development and has held many leadership positions within Janssen. In 2006, he assumed the role of Company Group Chairman, with responsibility for worldwide research and development for the CNS and Internal Medicine Franchises. Dr. Stoffels was made Global Head, Research & Development, in 2009. Paul has worked in affiliation with Janssenfor many years, originally with the Janssen Research Foundation (JRF) as a physician/researcher in Kinshasa, Congo and Kigali, Rwanda, where he focused on HIV/AIDS and infectious diseases. Dr. Stoffels studied medicine at the University of Diepenbeek and the University of Antwerp, Belgium and infectious diseases and tropical medicine at the Institute of Tropical Medicine, also in Antwerp.

Moncef Slaoui Moncef Slaoui

Chairman

At the time of recording this PTV interview Moncef Slaoui serves as Moncef became Chairman, Research & Development in June 2006. He is a member of the Board and the Corporate Executive Team. Moncef was given overall responsibility for GSK's Oncology Business in 2010 and for GSK Biologicals in 2011. In his previous position as Senior Vice President, Worldwide Business Development and External Alliances, he served on the R&D Executive Team and spearheaded recent changes in R&D to enhance drug discovery and accelerate product development. Previously, in GSK Biologicals, he engineered the development of a robust vaccines pipeline, including Rotarix, to prevent infantile gastroenteritis, and Cervarix, to prevent cervical cancer. Moncef earned a PhD in Molecular Biology and Immunology from the Universit" Libre de Bruxelles, Belgium, and completed postdoctoral studies at Harvard Medical School and Tufts University School of Medicine, Boston. He was Professor of Immunology at the University of Mons, Belgium. Moncef has authored more than 100 scientific papers and presentations. He was a member of the Board of the Agency for Science, Technology & Research (A*STAR) until January 2011.

PharmaVentures

PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.

Index Ventures

Index Ventures is a leading global venture capital firm active in technology venture investing since 1996. The firm is dedicated to helping top entrepreneurial teams in the Information Technology, Clean Technology and Life Science sectors build their companies into market defining global leaders. The firm has offices in Geneva, London and Jersey and focuses on investments from seed through growth stage companies. In the life sciences field, Index Ventures invests in companies with disruptive platform technologies capable of growing into global leaders. It has also pioneered the asset-centric investment model, focused on investing in single assets with the potential to be first or best in class. More recently it has expanded its focus into the diagnostic/medical device areas. Current portfolio companies include Aegerion, Cellzome, Cyrenaic, Funxional Therapeutics, Micromet, Molecular Partners, Mind-NRG, NormOxys, Novocureand Sequenta. Exits of note include Addex Pharma (ADXN), Genmab (GEN), PanGenetics (Abbott) and ParAllele Bioscience (Affymetrix).

Johnson & Johnson

Johnson & Johnson incorporated in 1887, is a holding company. The Company, along with its subsidiaries, is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. The Company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. Its Medical Devices and Diagnostics division offers surgical equipment, monitoring devices, orthopedic products, and contact lenses, among other things. J&J's Pharmaceuticals division makes drugs for an array of ailments, such as neurological conditions, blood disorders, autoimmune diseases, and pain. Top sellers are psoriasis drug Remicade and anemia medication Procrit. Its Consumer segment makes over-the-counter drugs and products for baby, skin, and oral care, as well as first aid and women's health.

GSK

GSK GlaxoSmithKline is one of the world'slargest research-based pharmaceutical corporations that discovers,develops,manufactures and markets branded human health products.Headquarters:UK,with additional operational headquarters in the USA Global presence: about 160 countries.GlaxoSmithKline accounts for over six percent of the world's pharmaceutical market. Its product portfolio includes prescription medicines and vaccines. Its prescription medicines range across therapeutic areas, such as anti-infectives, dermatology, gynaecology, diabetes, oncology, cardiovascular disease and respiratory diseases. It also offers a range of vaccines, for the prevention of hepatitis A, hepatitis B, invasive disease caused by H, influenzae, chickenpox, diphtheria, pertussis, tetanus, rotavirus, cervical cancer and others.