Olivier Litzka of Edmond de Rothschild Investment Partners talks about their funds and focus and why he is optimistic for the future

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Video title: Olivier Litzka of Edmond de Rothschild Investment Partners talks about their funds and focus and why he is optimistic for the future
Released on: June 15, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks to Olivier Litzka, Partner of Edmond de Rothschild Investment Partners
Focus and types of funds
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BioTrinity 2011. On this show I have Olivier Litzka, who is the Partner at Edmond de Rothschild Investment Partners based in Paris, welcome to the show.
Olivier Litzka:
My pleasure.
Fintan Walton:
Olivier, could you tell us the origins of Edmond de Rothschild Investment Partners and the types of funds that you currently hold and the types of investments you make?
Olivier Litzka:
Okay, the origin is that in year 2000 Edmond de Rothschild Investment Partners was created as a fully owned subsidiary of the bank LCF Rothschild based in Paris. It is focusing on minority investments, gross capital, small caps and life science venture capital, the common denominator of those is that investments are done in minority holdings and therefore a certain interaction with the other shareholders is important. So coming to the life science activity it was created in 2000 a small first fund BioDiscovery-1 in 2000, 26 million very small vehicle, 2004 another one was created 80 million to invest in biotech and medical devices and in 2008 we raised 155 million that is actually the fund BioDiscovery-3 which we use at the moment to invest in companies all over Europe exceptionally also outside of Europe and we're focusing on medical devices and biotechnology companies at different stages, so we are not an early stage investor, we are not a late stage investor we do both, what we are very careful about is that our portfolio is balanced in what we have in this portfolio.
Portfolio of investments
Fintan Walton:
Okay, so unlike any other funds which may say we only invest in early stage or we only invest in clinical stage, you are quite happy with a mixed portfolio of investments?
Olivier Litzka:
That's exactly it and it sometimes a little bit difficult to explain to entrepreneurs, so our explanation is send your business plan in or contact us get in touch, because it might be that your opportunity is exactly what we would like to put into our portfolio if we don't that doesn't mean it's not good, it does just mean that it doesn't fit at the point in time into our portfolio strategy. And we have not changed the strategy, we have not moved more to medtech, or more to biotech because it happens.
Fintan Walton:
Even with those changes in the industry because over the last 10-years lots of things have changed?
Olivier Litzka:
No, we don't do this, because we try to maneuver the risk of the companies, but maneuvering the risk of what is hype and what works well is impossible for you, what we think very deeply is that medical devices and biotech solutions can address real medical need, I will give you an example, recently we invested in diabetes because we thought the area is of course very important area there is a big medical need. So we invested in a company which is developing a new drug for diabetes and six months later we invested into a pump business here in the UK by the way our first UK investment into Cellnovo which has developed a very innovative pump for insulin, so an example it was of course coincidence in terms of timing, but an example how we address medical need both from biotech and medtech.
Investment strategy
Fintan Walton:
Right, and the other thing is where do find your opportunities, you say people send in your business plans are you a lead investor you prefer to be a lead investor? Are you a true lead investor and how do you play with other funds?
Olivier Litzka:
Are we are true lead investor that's a question you better ask this yields we are backing, so what do we understand of being a lead investor it's not about having always most of the money and playing the biggest role and you know it's not the testosterone question if you want, it's a question of doing the proper work, aligning the interests of founders, management, other investors, building a syndicate making sure that the alignment is there and orchestrating questions when they arise in the board and playing a major role into development of the company that's what we try to do, so by definition we will not follow others just because we know them, we will do our due diligence, we might co lead we do it together with another fund, another person which we trust, no problem with this, but we would like to make sure that the investment we do is really properly followed.
Fintan Walton:
But then in the end you still have you must have your preferred companies you like to work with other investment firms you like to work with?
Olivier Litzka:
Yes, there are couple which you know at the end you work with people and these people are in funds you then have to learn to work with so I am doing this more than 10-years and of course there are couple where it's easy to work with, but there are few you want to avoid to work with, but you know this industry has shrinked a little bit I would say there are less funds, so therefore you know this micro environment has learnt to be pragmatic to reduce the drive by ego but rather being pragmatic, solution oriented syndication, therefore I think yes there is a good balance and equilibrium, there is money available by the way for good companies, there is money available it's very difficult for early early early stage companies I agree to this, but once a company has developed and has proven certain milestones, has proven to be paying attention to it's own business plan then there is money available.
Olivier's perspective: Future of biotech industry
Fintan Walton:
And so you've got a good view through your investments of what's going on in the industry, you've mentioned now things have shrunk for the number of players on doing investments and so forth, so what's your view then of how the biotech industry is going, I mean are you as optimistic about the industries you were five-years ago?
Olivier Litzka:
Yes, I am even more optimistic I have to say what we see and I just today here at the conference I chaired the panel about success stories this is not just by chance it is due to the face that we have a regular pace of very interesting and nice success stories. If you look into the statistics M&A it's a constant thing happening once a month, once every two months you see that a pharma company has acquired a biotechnology company by the way it's the same in medical devices which we're interested to as I said. So there is a constant flow of good news and pharma industry, big medtech industry in need for new products take up the products which are developed in biotech companies and they pay good prices for this. I'm pretty positive that this steady state is about to be achieved and the VC's and others all have responsibilities the venture capitalist deliver on a regular basis and not just over promise and not deliver then institutional investors will invest in our fund and it will be a steady state which is then very healthy, not too much money, enough to develop this industry.
Fintan Walton:
Olivier Litzka, thank you very much indeed for coming on the show.
Olivier Litzka:
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).
Olivier Litzka
Olivier Litzka has been a partner with Paris-based Edmond de Rothschild Investment Partners (EdRIP) since 2006. He invests primarily in European biotechnology and medtech companies as well as some investments in the United States. In addition to Noxxon Pharma, he serves on the boards of Novexel, Probiodrug, Endosense, SuperSonic Imagine and JenaValve Technologies. Before joining EdRIP, Olivier Litzka spent six years with 3i's life science venture capital practice, based first in Munich and then in Paris. In this position, he served on the boards of several portfolio companies and made a range of international investments. Before joining 3i in 2000, he worked as a strategy consultant with Mercer Management Consulting for several years, both in Munich and Paris. Olivier Litzka holds a Ph.D. in molecular microbiology from the Institut f"r Mikrobiologie at the University of Munich and did his scientific research work over several years in Munich and Oxford.
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.
Edmond de Rothschild Investment Partners
Edmond de Rothschild Investment Partners based in Paris is dedicated to minority investments into privately-owned companies. It has currently 800 million Euros under management which is being invested primarily as life sciences venture capital and growth capital. Its Life Sciences Team of six professionals brings together over 30 years of experience in the Life Science industry and more than 50 years of private equity and venture capital experience. The team has approximately 300 million Euros under management after having recently raised 150 million through BioDiscovery 3. Edmond de Rothschild Investment Partners is an independently managed affiliate of La Compagnie Financi"re Edmond de Rothschild Banque.