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Biotech Startup Vet Daphne Zohar on PureTech, Follica, and Doing Rather Than Talking

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operating company and are fully funded to support both our operations and seed investments in companies we found. We therefore have the resources and flexibility to spend time on the heavy lifting that’s involved in translating academic innovation into commercial products. Given our structure and focus, our interests are completely aligned with our academic co-founders.

We see ourselves more as an institutional entrepreneur focused on starting companies, rather than a venture fund that typically invests in companies.

X: How many new companies do you expect to launch in 2011?

DZ: We have about six companies in formation right now and typically form between two to four companies a year.

X: How do you find technology with which to form companies?

DZ: We review about 800 academic technologies each year according to therapeutic or theme areas and we primarily look at the strength of the “pure technology” rather than the management team or business model. We form these companies with the leading academic experts in that theme or therapeutic area and then we manage the company’s initial scientific milestones until we are convinced that the technology is viable. At that time we will bring in external funding sources or partners and build out the permanent management team. Once that happens, our role transitions to a board role in the company, similar to a traditional venture fund.

X: What are some of the emerging fields that PureTech is looking into nowadays?

DZ: We have been working very intensively exploring ways to measure and modulate the human microbiome (or the billions of microbes that live in our bodies) that can impact a number of therapeutic areas. We believe that this emerging field may potentially be as important as the human genome was and we are working with the leading people and have multiple new companies in formation in that space. [Editor’s note: See more details on the firm’s work in the microbiome field in our recent Vedanta story.]

Another area we find exciting is the application of device technology to areas that have been traditionally addressed through drugs.

X: Which venture firms in the Boston area are investing in brand new biotech startups?

DZ: I’m not sure what the strategy of other firms is. There are a few that say that this is what they do but I have not been tracking their investments closely enough to say whether that is indeed how they are investing.

X: Do you find it’s tougher for PureTech to find other VC firms to help fund your startups?

DZ: Not at all. We usually have our choice of competing syndicates of venture funds we can work with for any company we form. We are doing a lot more with strategic partners directly, like we are with Enlight Biosciences and other initiatives. I am not sure that venture capital is always the most attractive source of funding for entrepreneurs. (I have talked about this concern before on Xconomy in my “Venture Model Makeover and Diet Plan” post.)

X: What are your feelings about the intense interest in Follica and its technology?

DZ: It’s understandable because it’s an area that has a significant unmet need. Follica has great technology and the leading people in the world involved. Everything is being managed to the highest standards with a focus on doing rather than talking.

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10 responses to “Biotech Startup Vet Daphne Zohar on PureTech, Follica, and Doing Rather Than Talking”

  1. Pushga says:

    Has Daphne ever had a successful exit with any company? I don’t think so.

  2. Robert K says:

    For those outside of the venture world reading the comment above, “exit” is a term from the venture capital world referring to either selling a company or taking it public. From an entrepreneur’s perspective, an exit is thankfully also the time you get rid of all the annoying VCs on your board. Investing a bunch of money in a company that someone else formed several years earlier and that others are managing, then taking credit for an “exit” is typical of arrogant VCs. Despite whatever “exits” they are bragging about, most VCs haven’t made a positive return for their investors in over a decade. Furthermore, many of the biggest money “exits” in the life science VC space that made money for their investors, ended up being dismal failures for those large companies that spent the cash. I am much more impressed by what Puretech is doing and I think their approach is far more likely to have a long-term impact on the world than that made by VCs that are just moving money around. Forming innovative companies and doing deals with large companies as Puretech has is much more impressive than sitting around in a conference room, heckling poor entrepreneurs and then screwing them. VC is dead (dying), long live any other approach.

  3. Bill says:

    PureTech is cool.Amen Robert K I’m with you brother

  4. Pushga says:

    So, Robert and Bill, what other approach would you expect a company to take to raise money that doesn’t require an investment? Keep in mind, drug development is very expensive and SBIRs just don’t cut it. Any investor, VC or otherwise, is going to expect an ROI.

  5. Bill says:

    Pushga, yeah all investors want ROI including entrepreneurs who are investing the currency of their time. The question is where does an entrepreneur get the best ROI? Better to build things more slowly and not line the pockets of parasites.

    Re your question, a combination of a. angels and other investors that are win/win (there are a very few VCs who are in that category), b. grants (you have to be creative-there’s a whole world of grants outside of SBIRs), and c. strategics.

    Anyhow the VC industry is hardly supporting innovation due to a combination of risk averse behaviour and venture fund-raising challenges so entrepreneurs need to start looking in other directions.

  6. b_informatics_vp says:

    As a pharma and biotech insider who is also very familiar with PureTech and Daphne’s great talent for publicity, I would like to know which of the PureTech companies have been successful. Are any profitable? Have any been acquired? Or, is Daphne’s success still packaging stockings in a plastic egg :-)

  7. anonymous says:

    As someone who knows very little about venture capital, I have a simple question:

    If PureTech wasn’t making any money or reaching successful exits, how have they stayed around for the past decade? Wouldn’t they go broke pretty quickly?

  8. S. Jonas says:

    Bioinformtics VP, you should not waste too much time worrying about someone else’s success. Sounds like you are a little bit frustrated for some reason. In an attempt to answer your question success which any true industry insider knows is a long-term game, can be measured by multiple factors including (but not limited to): a)ability to identify important and novel science, b)quality of people affiliated with the company, c)ability to attract funding and strategic partnerships, d)impact on patients.

    Seems like PureTech’s track record is pretty impressive in the first three and potentially the fourth as well. Just reading through Xconomy’s most popular stories today, 3 of them relate to PureTech companies. These companies seem to be of high interest to the industry leaders who affiliate with them and to the industry insiders who read Xconomy. One can always find something to be critical about especially if there’s an axe to grind.

    Get a life :-)

  9. Pushga says:

    B_informatics_vp,
    The answer to your question is Daphne is only good at tooting her own horn. No successful exits and technologies. Maybe she’ll get lucky with those plastic eggs.