What Do We Do Here?

Happy Monday

Given how often I have the same conversation with various individuals on the team, I thought that it might be useful for me to share internally, on a regular basis, a little bit about what’s going on in the portfolio, what’s been on my mind and on my radar, and occasionally some longer form thoughts on strategy and our approach to building companies.

I’m going to try to write something every week, which means it will sometimes be rough. I very much intend this to spark discussion, so please feel free to reply-all or just to me, if you like.

Since our Annual LP Meeting is coming up next week, I’ve already been in the mode of collecting my thoughts and have a perfect topic for this first Vital Signs newsletter: what, exactly, are we doing here?

What do we do here?

I made a slight change to the program for the LP meeting this year: I relabeled my section from “biotech” to “biopharma.” That was for two reasons. The first is that biopharmaceuticals more accurately describes the industry and market our companies care about. The second is that “biotech” is a loaded term, and to most people, maybe even to some of you, it means a company organized around a classic effort to translate a biological discovery into a new drug, and that’s not what we invest in and build.

Over here, on the bio side of the house, we build technology companies. But why? Well first, it’s incredibly fun: sitting at the frontier of science and engineering, helping to pull the future forward, is the best job in the world. Particularly, in my opinion, when that future is better, longer, healthier lives for all humanity.

But, more importantly for an investment firm: when I say technology companies, I mean companies whose core business is enabled by proprietary technology, proprietary technology that gives them decisive leverage over a critical bottleneck in the biopharma value chain. At the end of that value chain is medicines, the biggest product market that exists, to the tune of $1.5T per year. Decisive technology leverage in such an enormous market represents an opportunity to build massive businesses.

But technology is a broad term. What kind of technologies do our companies build, and do we look to fund? We look for technologies that enable the creation of therapies that could otherwise not exist; our companies build technologies that let them make drugs that no one else can make.

This strategy has two essential benefits, from a market perspective. First, our companies can solve the problems that current technology cannot, and let medicines be brought to market that no one else can offer. It’s great to avoid competition.

Second, our companies can make better drugs, more sophisticated and effective medicines, in diseases where the old inferior technology sufficed to create a marketable product. If you have to compete, it’s great to have a decisively better product than your competitors. And in biopharma, the better product is largely a matter of objective fact.

That is our approach in a nutshell: build and invest in companies whose technology enables the creation of medicines that could not otherwise exist.

Binding Sites

1. If America’s so rich, how’d it get so sad? A thorough analysis and diagnosis of this ongoing decade of malaise. Gets at a plausible explanation of why despite all the measurable things in the economy going so well, people seem to feel so bad about it.
2. Are colors actions? Fascinating philosophical essay about whether colors should more properly be considered as actions, rather than attributes of objects. I found the argument particularly interesting in the context of pharmaceuticals: objects that take actions and are responded to by the systems on which they act. Are ADMET properties attributes of a drug molecule, or are they better understood as actions of the drug?
3. Redefining antibody patent protection using paratope mapping and CDR-scanning The 2023 Amgen v. Sanofi Supreme Court ruling invalidated broad functional antibody patent claims, breaking the historical approach of claiming any antibody that binds a given antigen or epitope. The authors propose a new approach modeled on small-molecule patenting: use comprehensive CDR-scanning mutagenesis to experimentally map an antibody’s paratope and all permissible amino acid substitutions across the CDRs, then claim that structurally defined genus to satisfy the requirements of the USPTO and courts. For anyone developing therapeutic antibodies or other proteins, this means building patent applications around experimentally validated structure-based composition claims rather than functional binding claims, and reviewing whether existing patents relying on functional or percent-identity claims are vulnerable.