Coming from entrepreneurial healthcare and venture capital company growth backgrounds respectively, Joey Mason and Ed Snow know the pitfalls and opportunities that come from investing in healthcare.
Their firm Duplex Capital Partners aims to profit from investing in “Digitally-based life science technology companies innovating to underpin the next generation of biotechnology products.” Here, they explain what they do and where they think the industry is going.
What does Duplex Capital Partners do?
Joey Mason: We invest in what's now being called the TechBio sector. This is essentially the technology that underpins advances in medicine. Where in the past, pharmaceuticals was all about mixing chemicals and figuring out what you got, we’re now using enormous amounts of data processing to develop new biological therapies. This use of data allows us to know what's coming and what's possible in technology, and how to marry it to biology. Historically, technology and biology has been a difficult mix for venture capital investors to get their heads around.
How have you been received by investors?
Joey Mason: [pictured right] We've got lots of interest from limited partners (LPs), including institutions and corporates, so we know we're in a nice space. We have advanced through a number of investment processes and expect to have a first close of the fund soon and be investing again then. We will continue to engage with additional LPs for a second close a few quarters later. On the venture investor side, we know a lot of the funds in Europe and the United States, but they’re not dedicated to this sector. We're unique in that this is the area we solely focus on. We let the folks who invest in drugs and medical devices do their thing and we’ll focus on the digitally-led side of things.
Ed Snow: Being upfront, companies in our sector won’t need FDA, 510k clearances but what’s interesting for our LPs is you can get something that's being developed by leading-edge academics, and you know immediately whether it works or not. Because there’s no patient testing needed, the regulatory burden is so much lower leading to faster growth.
Has the Covid-19 pandemic and the subsequent vaccine rollout made things better or worse for your sector?
Ed Snow: [pictured left] A well-known LP said to us that Covid-19 was the iPhone moment for this sector. We agree. It has just totally transformed things. Necessity is the mother of invention, and the pandemic has forced us to wake up and say, ‘Right, we can do this’. I can't say how amazed I am by the regulators and the vaccine manufacturers to get a solution working that quickly.
Joey Mason: I would have bet my house at the beginning of the pandemic, there would not be a vaccine by the end of the first year - and I would have lost my house! All the tools, technologies, software, and processing that went into creating those vaccines came from our target sector. And so, it's quite easy to translate for LPs what has been done with Covid-19 into the potential for personalised medicine and the next generation of cell and gene therapies, oncology treatments etc. Of course, people want to be able to see a return. That's why they invest. There are several TechBio companies that have listed recently who have created massive wealth within a very short space of time. But it’s not over yet, as we've only started harnessing data and its potential applications in life sciences.
Given the potential fast and reportable results, would you say this area would be of interest to impact investors?
Joey Mason: Broadly speaking, everything we're doing in life sciences is essentially Environmental, Social, and Governance (ESG)-driven. When you can drive down the cost of drug discovery and bringing drugs to market and developing personalised therapies, you're by default able to address smaller markets and rarer diseases. These are not likely to be the technologies that are going to lead to, for example, a universal hypertension product. But it will enable products to help with genetic illnesses and rare cancers.
How do you see the landscape looking in ten years’ time?
Joey Mason: We think the sector is going to grow and grow. It's like all of healthcare, there’s an unending desire for spend in the sector. Mass personalisation of therapies brings with it a huge amount of opportunity and potential. You’ll be able to bring more and more therapies to market much quicker and more cheaply. The needs in terms of IT, including quantum computing, for example, are going to have to open those kinds of sectors. I think there will be a load of new companies that will dominate the sector. I think you'll see a very rich and liquid commercial and investment market in ten years, it'll be way bigger than it is today.
Campden Wealth will be hosting the Medtech Investing Forum in Lausanne, Switzerland, in July 2022. For further information on presenting or participating, email email@example.com.