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to control the studies themselves, and they have more resources. That is certainly one strategy. Sofinnova does the same thing, and just successfully raised a fund. We do think there are some opportunities out there. But it’s difficult, when you are looking at the Phase 2 or Phase 3 stages, where there is some human data, and you are still subject to the capriciousness of the FDA’s approval process. When you look at the ‘Vital Signs’ survey, 61 percent of VCs said that regulatory challenges are the biggest single impact on venture investing, and over the next three years 40 percent said they were reducing their investment in biotech, pharma, and devices. That is the real message.
X: What about the life sciences firms that are still in your portfolio—Alimera, Ascenta, Oraya, Sonexa. How does this shift reflect on them?
KM: We think there is a lot of upside there. These are big markets with a great stable of CEOs—as strong a group of CEOs as you could find anywhere. We have them in regularly; a few weeks ago they were meeting with our LPs alongside our tech CEOs, and our LPs love them. They are good leaders. One of the reasons Marke and Lou are going to be busy is that we want to guide them to an optimal outcome. We have more than adequate reserves to take them through that. For whatever rounds they need, we are fully reserved, and our LPs understand that and approve that. So there is a lot to do here.
X: You’re the past president of the NVCA, the former chair of MedIC, the chair of the IPO Task Force. What do you think it says to the industry, and to government, when your own firm decides to walk away from life sciences investing?
KM: I have had some Congressmen reach out to me already today, and I’m glad that we can have those conversations, frankly. I am obviously not doing it for effect—it really came down to us sitting back and saying what is the right thing to do. But healthcare investing has moved outside our scope, and unfortunately, that does say a lot, and we are going to use it to further the dialog.