BVE’s Investment Thesis Supported in the
2023 JP Morgan Healthcare Conference
Private Companies Continue to be a Bright Spot in a Volatile Public Market
The 2023 JP Morgan Healthcare Conference never disappoints, and this year was no exception. Sure, attendance was down (8,000 -12,000 attendees by one, “unofficial” estimate compared to the 20,000+ peak level), but the desire of the life sciences industry to convene after a three year COVID hiatus couldn’t be deterred by a little foul weather. Speaking of the foul weather, there was a lot of commentary about the correlation of the local weather and the current state of the public financial markets. Dismal. Chaotic. Volatile. Annoying. You pick your favorite adjective. Just one more reason we are big believers of investing in private companies, especially in the current environment.
The presence of cannabinoid and psychedelic focused companies at this year’s conference was palpable as we had the opportunity to meet with the likes of Atai, Cannaformatics, Filament, Numinus, Sensorium, (a notable BVE portfolio company), Tryp, and many others, including a handful of investors and strategics contemplating a move into the space. By contrast, attending the 15th annual “state of play” of the
Cell and Gene Therapy Alliance – now in its 15th year and its first drug approvals on the horizon, the cannabinoid and psychedelic space felt like the Rebel Alliance, about to take on Vader’s Death Star.
Public Company Problems are Private Company Opportunities
It was obvious that many, small, “too-early-to-the-public-markets” companies are reaching the bottom of their cash barrels and will be financing soon – regardless of valuation. It was also clear that pharma is going to take their sweet time (what else is new) until there are piles of data and FDA/DEA buy-in into these chemistries before they jump into the pond. Big Pharma’s overpriced acquisitions = our fat returns. BVE predicts that in a very short 3-5 years, many people will be kicking themselves for not investing in this sub-sector of the life sciences industry, now. We all know that the best vintage funds emerge from circumstances exactly as we are currently facing: macro-driven, overly-negative distortions that are no match for hard-nosed private company entrepreneurial focus which leads to: data, data, and more data.
At the same time, private conversations we had with the likes of Tim Opler, co-founder and Managing Partner of Torreya (recently merged with Stifel), Andrew Gilbert, Global Co-Chair, Life Sciences, DLA Piper and Rouxi (Rosi) Chen, Managing Director, Warburg Pincus pointed to the fact that there is still plenty of capital around for great teams, with real science and well thought out business plans.
Of course.
Real Data Matters
Some of the best news of the week came out of Reunion Neurosciences with their announcement of positive Phase 1 Clinical Trial data with their Serotoneric Psychedelic: RE104, a unique 4-OH-DiPT prodrug that has the potential as a fast-acting and durable treatment for patients suffering from postpartum depression. This was in stark contrast to Atai’s announcement of mixed data out of their PCN-101 (R-ketamine) Phase 2a
proof-of-concept trial, which missed its primary endpoint and sank their shares by nearly 40%. We still believe, however, that they are the leader of the 1st generation pack, targeting traditional mood disorders. Ross O’Brien of BVE points to the fact that these new molecules are already in Phase 2 trials and regulatory bodies in many states, and countries are increasingly permitting full spectrum research means that we are at the point of critical momentum.
BVE is Positioned to Capitalize on Private Life Science Companies
In summary, we finished the week more energized than ever that our investment thesis couldn’t be better timed, and that companies like
Journey Life Sciences (a BVE incubated company) which is utilizing a novel, IP protected 1st generation formulation of psilocybin targeting the unique patient population of Chronic Pain, are well positioned to create outsized returns for savvy investors who get involved now.