WEBVTT - Looking at Life Sciences Investment Landscape

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovic on Bloomberg Radio yesterday. If you

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<v Speaker 1>were listening, we hope you were. If now, you should

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<v Speaker 1>check out our podcast feed because we talked with Maroon

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<v Speaker 1>Gribbitts Confederancy of Inner Cosmos, which is a neurotech company

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<v Speaker 1>creates a brain computer interface to really rebalance the brain.

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<v Speaker 1>They're really looking at a new way of treating UH

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<v Speaker 1>and alleviating cognitive disorders. Well, it does feel like overall, Tim,

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<v Speaker 1>a lot is brewing when it comes to disruption and

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<v Speaker 1>innovation in the healthcare and life sciences space. And our

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<v Speaker 1>next guest company invest in growth stage life sciences technology companies.

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<v Speaker 1>So let's get to it. Michelle dip is co founder

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<v Speaker 1>and a managing partner of Biospring Partners. As Carol mentioned,

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<v Speaker 1>it's a it's a company that invests in growth stage

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<v Speaker 1>life sciences and tech companies. Michelle joins us via zoom

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<v Speaker 1>from New York City. Michelle, how are you. I'm doing

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<v Speaker 1>really well. Thank you so much, Tim, and thanks to you, Carol.

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<v Speaker 1>I'm so happy to be with you today. It's really

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<v Speaker 1>incredible because we've approached life sciences investments from a few

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<v Speaker 1>different areas. We've talked about it on Bloomberg Bus this

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<v Speaker 1>week a lot when it comes to real estate, because

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<v Speaker 1>it's one area of corporate real estate that's actually booming

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<v Speaker 1>right now. And I'm wondering, from your perspective, what are

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<v Speaker 1>the trends that you're seeing right now when it comes

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<v Speaker 1>to investing in these types of companies. Yeah. Absolutely, I

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<v Speaker 1>mean we're really excited by the way that technology is

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<v Speaker 1>completely changing and of course improving healthcare. Um. Really, the

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<v Speaker 1>three main themes that we're looking at right now is

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<v Speaker 1>ways that technology is improving R and D or research

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<v Speaker 1>and development. The second way is manufacturing, and the third,

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<v Speaker 1>of course is delivery of healthcare. I think a lot

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<v Speaker 1>of us have maybe even use telemedicine in the last

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<v Speaker 1>couple of years during the pandemic. Yeah, I gotta say

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<v Speaker 1>I have. And what a treat because when you think

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<v Speaker 1>about sometimes you just can't get to the office, and

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<v Speaker 1>sometimes it's over something little that maybe you don't need

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<v Speaker 1>some kind of exam or what have you. Um, and

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<v Speaker 1>it's just amazing what can be done. UM. Having said that, UM,

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<v Speaker 1>you talk about technology improving R and D, what specifically,

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<v Speaker 1>what are the kind of companies that you're looking for. Yeah. Absolutely,

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<v Speaker 1>I mean we're looking for companies frankly that are using

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<v Speaker 1>genomics to UM change R and D and oftentimes what

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<v Speaker 1>they're doing is they're improving the efficiency of clinical trials.

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<v Speaker 1>So you probably know the human genome was sequenced over

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<v Speaker 1>twenty years ago and we were all waiting for a

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<v Speaker 1>tools revolution to come because of that, and it didn't

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<v Speaker 1>happen because we really needed the cost of genome sequencing

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<v Speaker 1>to decline. We also needed to be much faster than

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<v Speaker 1>it had been once it was discovered. But now we're

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<v Speaker 1>using genomics to diagnose and treat diseases like cancer. You know,

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<v Speaker 1>ten years ago we used to talk about lung cancer

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<v Speaker 1>in terms of small cell non small cell. Now it's

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<v Speaker 1>characterized by using about thirty genetic mutations. So it's really

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<v Speaker 1>just changed tremendously, and so you know what does that

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<v Speaker 1>mean for patients. It means more accurate diagnosis, earlier treatment,

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<v Speaker 1>better prognosis. So we're specifically focused on companies UM that

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<v Speaker 1>are using uh, you know, software, machine learning and genomics.

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<v Speaker 1>It just like you know, we talked about this UM Michelle,

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<v Speaker 1>but the personalization of medicine, and we you know, we've

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<v Speaker 1>talked about it certainly on air when it comes to autism, right,

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<v Speaker 1>there is we know this a spectrum, but that is

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<v Speaker 1>true too for some major diseases. It's not you know,

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<v Speaker 1>a cookie cutter, uh, you know way of treating people,

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<v Speaker 1>especially when it comes to cancer. It's all kind of very,

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<v Speaker 1>very different and needs to be in many cases kind

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<v Speaker 1>of catered to the individual. You're absolutely right, and that's

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<v Speaker 1>something that we're only just now starting to tease out

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<v Speaker 1>and the human genome has just really elucidated a lot

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<v Speaker 1>of that. And it's important, right because, Um, it means

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<v Speaker 1>that you know, to your point in terms of an

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<v Speaker 1>autism spectrum, for other diseases as well, it may completely

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<v Speaker 1>change the type of treatment that you get, uh number one.

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<v Speaker 1>Number two, of course, you can diagnose much earlier. Hey, Michelle. Um,

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<v Speaker 1>we've talked a lot about telemedicine and technology changing the

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<v Speaker 1>way that people experience healthcare. But I do wonder about

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<v Speaker 1>what this all means for a consumer from a consumer perspective,

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<v Speaker 1>because I think people over the last couple of years,

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<v Speaker 1>they've gotten used to speaking with doctors either smartphones, but

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<v Speaker 1>there are still doctors that you have to visit in person,

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<v Speaker 1>Like I can't imagine ever going to the dentist virtually. Um,

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<v Speaker 1>but I'm wondering what this looks like years from now.

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<v Speaker 1>I mean, could we go to the dentist virtually, Well,

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<v Speaker 1>that's a great question. Um, I'm not sure about the

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<v Speaker 1>dentist specifically, go to the dentist in the metaverse? There

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<v Speaker 1>you go. I mean that you probably need someone much

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<v Speaker 1>higher tech than than me to talk about the metaverse,

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<v Speaker 1>that's for sure. But um, you know, one of the

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<v Speaker 1>things that we've heard you might have seen. The HHS,

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<v Speaker 1>you know, did a study specifically on telemedicine, and they

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<v Speaker 1>said that the use of telemedicine rose by sixty three

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<v Speaker 1>times during the pandemic. So one of the things that

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<v Speaker 1>people are looking out for is does that actually reverse

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<v Speaker 1>or decline now that, um, you know, the COVID pandemic

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<v Speaker 1>seems to be under control. Um, certainly there are all

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<v Speaker 1>kinds of new ways to use technology. I mean you

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<v Speaker 1>probably mean we're using zoom right now. I mean this was, um,

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<v Speaker 1>you know, not something that we would typically use in

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<v Speaker 1>the medical world, but certainly it's being used for dermatology

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<v Speaker 1>trials for example. So a dermatologist can pretty easily diagnose something,

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<v Speaker 1>um you know, via Zoom or um you know, using

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<v Speaker 1>another telemedicine type platform. The other thing that's being used

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<v Speaker 1>more and more is of course wearables. Right, so now

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<v Speaker 1>you can track all kinds of things from heart rate

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<v Speaker 1>right the way through to atrial fibrillation. Other things can

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<v Speaker 1>be diagnosed. And so while it may not be I mean,

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<v Speaker 1>clearly some diseases need surgery and so that's not going

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<v Speaker 1>to be something that's going to be possible through tele telemedicine,

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<v Speaker 1>but certainly diagnosis is going to be a key area

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<v Speaker 1>UM that will certainly you know, has already been advanced

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<v Speaker 1>and certainly will continue to. We want to get back

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<v Speaker 1>to Michelle Dips. She's co founder managing partner of the

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<v Speaker 1>venture capital firm Biospring Partner. She is still with us

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<v Speaker 1>on Zoom from right here in New York City, and

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<v Speaker 1>you had a question do you want to go? Yeah, Michelle,

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<v Speaker 1>We we talked to venture capitalists right and they're thinking

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<v Speaker 1>about okay, cloud technology or cybersecurity, and they're making bets

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<v Speaker 1>on companies that can help protect other companies from hackers. Uh.

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<v Speaker 1>We know that that technology is needed and that technology exists,

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<v Speaker 1>and it's still a challenge for them because they have to,

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<v Speaker 1>you know, bet on the right horse. But I feel

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<v Speaker 1>like when it comes to growth stage life sciences technology companies,

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<v Speaker 1>it's it's kind of a different animal. It seems, you know,

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<v Speaker 1>a little bit harder to to try to make a

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<v Speaker 1>bet on something that might not even have proven technology

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<v Speaker 1>at this point. Can you take us through how you

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<v Speaker 1>how you separate the good companies from the ones that

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<v Speaker 1>you pass on? Sure? Absolutely so. One of the one

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<v Speaker 1>of the things that we do is we try to

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<v Speaker 1>identify themes that we think will be long term and durable,

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<v Speaker 1>and then within those themes, we actually get to know

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<v Speaker 1>our companies for a number of years before investing in them.

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<v Speaker 1>So it's a little bit less riskier, you know, as

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<v Speaker 1>you're you point out, it's very hard to determine whether

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<v Speaker 1>or not a fundamental technology is going to work or not,

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<v Speaker 1>so we actually typically wait a little bit um for

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<v Speaker 1>there to be a little a bit more proofd So

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<v Speaker 1>we're looking for long term, durable themes. We invest in services,

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<v Speaker 1>tools and software. We invest in companies that already have

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<v Speaker 1>a customer base, and we're looking for things like customer

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<v Speaker 1>uptape customer diversification, revenue diversification. We want those companies to

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<v Speaker 1>have ten million of top line revenue or more. They're

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<v Speaker 1>typically growing by top line by or more, and there's

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<v Speaker 1>a path to profitability. Hey, Michelle, what do you think

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<v Speaker 1>is driving innovation in the life sciences UM space and

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<v Speaker 1>life sciences technology? Is it cost? Is it efficiency? Is

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<v Speaker 1>it access? Is it true innovation? Is it better modalities

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<v Speaker 1>of treatment? Like? What is it? Because you know, life sciences, healthcare,

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<v Speaker 1>that whole community, it's pretty entrenched, right, It's quite an

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<v Speaker 1>infrastructure that's there. And I'm not saying that they not

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<v Speaker 1>open to innovation, but I do wonder what will ultimately

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<v Speaker 1>drive the innovation and what will determine kind of where

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<v Speaker 1>these investment dollars go. Yeah, that is just an excellent question.

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<v Speaker 1>And you know, really it's a combination of all of

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<v Speaker 1>those things. But you probably have heard these numbers, especially

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<v Speaker 1>given COVID pharmaceutical companies spend about two hundred billion a

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<v Speaker 1>year on research and development. That two hundred dollars spend

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<v Speaker 1>is growing at about a three to four percent cager,

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<v Speaker 1>and so anything that they can do to improve efficiencies

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<v Speaker 1>is something that they're you know, really focused on. So

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<v Speaker 1>if you can improve, for example, um, the efficiency of

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<v Speaker 1>your clinical trial or the effectiveness of your clinical trial,

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<v Speaker 1>you're going to use that technology to help you do that.

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<v Speaker 1>You know. One of the companies that were invested in

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<v Speaker 1>is called path Ai. They use software, machine learning, and

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<v Speaker 1>AI to scan a biopsy slide. So it's probably obvious

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<v Speaker 1>to you that instead of doing that manually, right, you

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<v Speaker 1>can use software and then it'll be you know, more accurate,

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<v Speaker 1>more effective, and of course it's a lot cheaper and faster.

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<v Speaker 1>All of that translates into a more effective clinical trial.

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<v Speaker 1>They sell that as a service to pharmaceutical companies who

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<v Speaker 1>then better place patients into a clinical trial. Arm But

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<v Speaker 1>all of those things matter. It has to be accurate.

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<v Speaker 1>It also needs to be faster and cheaper, So being

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<v Speaker 1>better isn't enough anymore. It also needs to translate into

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<v Speaker 1>dollars saved. How do we prevent another therapness from happening?

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<v Speaker 1>Good question? You know, that is a good question. UM.

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<v Speaker 1>I actually never met Pharaonis and I don't even know

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<v Speaker 1>another healthcare firm who has UM. I think many of

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<v Speaker 1>us really go through a pretty rigorous diligence process. UM.

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<v Speaker 1>You know, certainly at biospring. I mean, we're focused on

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<v Speaker 1>diligence NG first and foremost the technology, the service or

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<v Speaker 1>the product. UM. Of course you are looking at market competition, UM,

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<v Speaker 1>the team, the business model, the commercial model, the financials,

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<v Speaker 1>and and you're looking for audited financials as well. So

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<v Speaker 1>I think that UM, those firms who are going through

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<v Speaker 1>those you know, typical diligence processes and are looking for

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<v Speaker 1>audited financials prior to investing in companies, UM, you know,

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<v Speaker 1>are usually pretty well protected. Can you give us an

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<v Speaker 1>example of a company that you passed on that you

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<v Speaker 1>regret passing on and why you passed on it? Oh? Boy,

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<v Speaker 1>that's a go I'd love to ask capitalists this question. Unfortunately,

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<v Speaker 1>only about thirty second I was like this, Dimond's actually flown. Yeah, absolutely, so, UM,

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<v Speaker 1>you know, there was a company out there, and one

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<v Speaker 1>of the reasons that we passed on it it was

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<v Speaker 1>just way too early in terms of revenues. And I

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<v Speaker 1>think a lot of us do that where it doesn't

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<v Speaker 1>quite fit our investment criteria and so UM, and they're

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<v Speaker 1>just not there yet. And then of course you wait

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<v Speaker 1>too long and then the company you know, completely takes off,

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<v Speaker 1>and so UM, I mean, you know, I can certainly

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<v Speaker 1>give you ten examples of where you know we waited

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<v Speaker 1>too long for the for the proof to be there

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<v Speaker 1>in mix Cele Well, this was a pleasure. Stay in touch.

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<v Speaker 1>We'd love to hear about future investments. Michelle dipp, co

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<v Speaker 1>founder managing partner of the venture capital firm Biospring Partners,

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<v Speaker 1>joining us on zoom right here in New York City.

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<v Speaker 1>You know these VC websites they always have like the

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<v Speaker 1>companies that they've invested in, but you never hear about

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<v Speaker 1>the ones they pass on. So I love ask him no,

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<v Speaker 1>it's an interesting take right like and understand how they

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<v Speaker 1>do it.