E649 | Mariette Roesink, Curie Capital: Backing Life Sciences, Unicorns & Zero Bankruptcies

0:00Welcome back, everyone, to another episode of the EVZ Podcast. As you know, we're all about championing European emerging managers. And we're doing just that today because we're talking to Mariette Roussink from Curie Capital.

0:28This show is not investment advice and the hosts of this episode may be invested in the funds and companies featured. Mariette, welcome to the podcast. Thank you, Andreas. Nice being here. So Mariette, this is the format where I will basically almost hand over the mic fully to you to tell you or ask you to tell us everything about your fund and what you're building. Yeah, thanks. So the fund that we funded seven years ago together with Handel Groot is called Curie Capital, named after Marie Curie, because she has the same aspiration as we do. We find the best new technologies to help cure patients.

1:11And we thought that was a great icon to have for our fund. I do want to summarize, of course, at the beginning, what we have to offer to LPs. I think in these times, it's good to have a fund that is not really being impacted by uncertainties. there's of course not a good IPO market maybe now in the states but we invest in European companies developing their products in EU countries and they will be acquired by multinational companies that already are still in need of new assets for their pipelines and we are a specialist team So we have people that are both experienced in business and have a scientific background and have all been raising finance for companies as well.

2:10So we see the best opportunities in our deal flow. We have been around. I've been in investment for 13 years. We've already realized two unicorn exits. So I think that is a great position to be at as an emerging manager. We are also offering both a high financial return combined with also impact in patients. So it always goes hand in hand when your product shows great efficacy and safety in phase two clinical trials, or maybe a medical device has been working in many patients over 20 countries in multiple hospitals that will trigger M &A from the strategic buyers. So it always goes hand in hand and it's what I think an LP should be looking for.

3:06And this is also what is being said and published by other impact LPs like British Business Bank or other reports producing institutes that usually the funds of, let's say, 100 to 250 million are actually giving the highest returns. And with our new 100 million fund, we would aim to do so as well. And technically, it's our third fund, but the two funds together are only totaling up to 20 million assets and have comprised a lifespan of seven years of investment so far. So you could also say it's a second fund. Technically, the third, which is always a good position to be in for LPs. And of course, integrity.

4:00Yeah, I think we would pass all the due diligences on the ESG requirements we can commit to SDRF 6, 7, or even 9. So that, I think, is a good place to be in. Before we go on to the next slide, Mariette, you shared something before we started the recording, which I think is pretty cool, because the first fund you and your partner committed a lot of capital to, which, of course, is always very interesting when a GP has that type of commitment to their own firm. Could you maybe share a bit there and lift the lid as much as you want to here in the pod? Yeah, I think that would be actually the sixth element to add to this, what we have to offer, because we are in fact also LPs.

4:50We are family offices. So if I go on the next slide, the founders, you can see that I'm investing from my family office, Curiant, so investing our family money, and also Han de Groot is investing from his family office. He has built a company called Matrix Lab, which was merged with another company, Macromail, and then was exited on the Tokyo Exchange and is using the proceeds from that exit to invest in, let's say, Curie Capital, but also other, at the moment, in an AI gigafactory. So he's still entrepreneuring as he is. But we are investing two-thirds of the assets under management right now.

5:44And my family office has money from the business that my father had in packaging machines. I actually wrote a book back in the days on succession family businesses with an owner of a rather large Danish packaging machine operation. Yeah. Yeah. So I hope to reach up to his, let's say, business results with my business now using those proceeds. There's nothing better than a second generation that is ready to take on the mantle. Very cool, Mary. But it does testify that we are fully backing our strategy and that we are very much knowing what we do. and we will commit to the new fund as well. Even in the times that were harsh, like last year, and everybody was complaining and complaining, our portfolio raised 200 million euros.

6:51And we celebrated that with the CEO dinner last year. And then actually the CEO said, well, we can be celebrating for us raising those funds with you, or with the new investors. But actually, it's also as a complement to you picking the right investments that are now so successful in these harsh times to raise that capital. And for instance, a large portion of this capital was raised by Citro, our first investment, who are now 10 years in existence company and are entering phase two clinical studies with their antibody in autoimmune diseases. And they got 85 million funding from Forbion and Novartis Venture Fund and Johnson & Johnson.

7:46So we were backing them from the start, from the seed investment. So you can see, this is one example of the six companies that we now have in portfolio that we really did the right assessment on from the beginning. So that is what is Curie Capital. I'm so happy we on the podcast and EUVC world in general have started to focus more on the life science space. One thing is, of course, the very important work you're doing and the work that entrepreneurs are doing. It's literally saving lives. But it's also an undercover story, the massive financial success that is in life science. We had the exit of the year at the EUVC Awards this year was SVE Health with iBio.

8:36Incredible story. I think three years in, they exited for almost$3 billion. Like, incredible story. And it was in separate inside of SVE Health as well. Incredible story. And also the performance, of course, you're sharing here goes to show exactly why we should be focusing more on life science in Europe. So yeah, I'm a big believer and I'm sorry for not having covered it more before. In most cases, as I said earlier, it goes hand in hand. If you show real good, significant impact for patients, then it will be worth a lot and you will have high multiple. One of the exits that I had in my working for the previous fund at Bomb Capital So it was Acerta Pharma that was having a great impact in CLL patients, showing a high overall survival.

9:30And it was acquired by AstraZeneca for$11 billion. So that is why it was worth so much. And that was an amazing adventure to be part of as an early-stage investor. And we hope to see that again happening in the portfolio. and this will be probably well at the end of the phase two studies so two more years to go I think well this slide we can be very brief about but it just shows LPs that VCs is essential to get breakthrough medicine to patients like well actually the Moderna vaccines have been VC backed up. You can make forms of deafness be cured or eye diseases or cystic fibrosis. It's really important.

10:26VC is really essential here. So that is our mission. And we do that by doing very selected investments in early stage biotech companies. We look at first or best in class products in accessible markets and companies that have experienced and visionary leaders. So it helps to check on all of those boxes. After that, we provide hands-on support, looking at the differences between the biotech VCs and maybe the regular tech VCs is that working with these companies, you are already in early contact with your potential buyer, because we involve the pharma or medtech strategics in our due diligence process on a non-confidential level, of course.

11:22But we want to know for what it's worth at that early stage that they have a buy-in, that they believe in this technology as well. And from then on, we keep talking to them. It's also not only specialist work, but it's also a specialist network. Yeah, and that's one thing I always say about venture is it's quite easy to distill what the parts that are required to be a successful VC is or are. However, building it is a lifelong journey. And exactly because of the networks part, it's not just having a list of names, It's having true trust and being top of mind and so on of some of the most people in the space, not just in Denmark, not just in the Netherlands, but at least European wide, if not globally.

12:11And that goes to show why, you know, it's easy to say that I've got a good network or I want to do this investment strategy and I know everything about AI or whatever. What you really need is you need to show that I've got 20 years behind me doing this and everyone knows. so on slide seven I want to show an example of how we do this how would we create impact for patients so one of our companies is called Target Biotherapeutics and they are developing a new product for stroke everybody knows someone who's had an acute ischemic stroke unfortunately it's It's one of the leading causes of death. And if you survive, you have a large amount of disability, like speech impairment or paralysis.

13:06And it's really devastating. And it hasn't seen a new product on the market for a decade. This is because a lot of the products that are being developed are also, So, well, you need to test in a large group of patients because it is such a prevalent disease. So it is quite costly. But this company really found a targeted, and that is very essential in this regard, therapy that dissolves the blood clots. And there's not only ischemic stroke that is thrombosis disease, but there is many of those diseases. But of course, as a company, you have to choose two indications to test in a clinical trial.

13:55And from that on, you can, well, you have created value and you can also do trials in those other thrombotic diseases. So there is a huge potential for this medicine. And we already backed this company in 2020 when we saw the potential and when it was spinning out from university. And that was based on mouse models in which they showed efficacy. And then right before Russia invaded Ukraine, they were actually successful in raising a good Series A financing to cover the clinical trials for this. From that on, we also continue to invest in that Series A round. they have this first quarter of a year tested the drug in healthy volunteers which is required before you can start phase two studies in patients and that is about to happen in two months from now so we're very excited everything looked really well also the healthy volunteers there were no side effects and then we hope to see that the patients will have a better recovery than currently done with yeah the drugs that are on the market that cannot be used when it's been three hours past the stroke incident and also thrombectomy is successful but not 100 % and you also need to be in the vicinity of a hospital.

15:37Potentially, this drug could be given in the ambulance when they come to pick up the stroke patient. So that would really make such a difference for patients worldwide. And yeah, this is how we do it from the beginning on. My father-in-law had a stroke last year or so, close to home. Yes, my mother too. Yeah. But she is alive, but has aphasia. Yeah. Yeah. Now, can I ask you, can we jump to your founder track record? Because this is something that I do think we should make it to cover. And we try and keep these episodes shorter so as to respect the time of our busy LPs that listen into these. And unfortunately, they are busy and ventures not forever one top of their priority.

16:29So let's get to the most important thing here. It's quite astounding what you and Han has been able to do. So I have worked with BOM Capital where I invested 30 million euro in 15 ventures. And we've had more than 250 million distributions. One was Unicorn. Han is actually still investing next to Curie Capital. So he has been investing, for instance, in Amelix, which was also a unicorn. They are developing a drug for ALS. And here I mentioned AstraZeneca acquisition of Acertapharma, which was in my previous role with Bomb Capital. So those are the two unicorns. But we have realized many more exits.

17:23Han has exited his own company in tech. I've been supporting all these companies from Bomb Capital. They are mostly drug development, but also medical device or manufacturing of drugs, so to speak. And you shared your own stats, but for Han, it was 12 invested companies, $240 million invested in total and$730 million distributed. These are good numbers, Mariette. You don't have as big a smile on your face as I would expect. The zero bankruptcies, that's something I'm really proud of and I want to continue for the next 10 years. Yeah, it's amazing. If I tell that to people, they're, whoa, how do you do that?

18:16I mean, it must happen sometime they say, well, I hope it never happens because I spend a lot of time to get companies back on track or to find that new investor or to whatever is necessary. Do you think that's the magic? The fact that you lean in so hard? Well, it's difficult. It's been difficult all these years, but you have to be committed 200%. yeah tell me mariette about the rest of the team who have you surrounded yourselves with inside curie yeah so we have oliver tuck who is a medical doctor by training and he has also been working with curie capital as an analyst has also done before that worked with medici and with kempen as an analyst.

19:09He is involved, I would say, part-time. He's also working on his own company. Then Tom Vreelink is our senior associate. He's been with us for three years now. He has a background in both science and business and MBA and also experience in raising funding. He is actually responsible for all the portfolio companies of Curie Capital 3. He's a full-time employee. And then we have a fellow, Sven, who will become an analyst upon the closing of the new fund. He has also a background in both science and business and health economics and has worked also with Kempen. Very cool. Now, I would love to ask you if we could go and talk a bit about the Western European life science hub and why we are as strong as we are.

20:05Maybe you could talk a bit to that. Yes. So why do we invest in the life sciences in Western Europe? It's for many reasons. The science quality is very high. there's also a lot of instruments and government grants etc to promote to spin that out into businesses as you can see Netherlands ranks very high even though we are only the number 67 in the world we rank much higher in the top 10 when it concerns the research output you know in journals patents in med tech biotech and pharmaceuticals we're all in top 10 and we have some legendary medicines that are coming from dutch so soil so ketruda has been invented here it's top selling drug for cancer it's also ramecade for autoimmune diseases calquins is the the product of the company I mentioned as the unicorn exit we had and Blibera is the first gene therapy that Unicure developed so and the most also I mentioned reason to invest here and that I think maybe some US LPs are discovering is that there is let's say a step in valuation that is very really attractive.

21:41If we invest here and we do it very capital efficient as the Europeans do, and we have our exits mostly in, well, international pharma and medical technology companies, but they are largely based in US and valuations are much higher. So we take advantage of that valuation uptick, so to speak. Yeah, you have a gap of 6.1x between Europe and the U.S. when it comes to early stage median valuations. That is significant. Could you tell me a bit about, because we have a ton listening to this podcast that are probably more used to investing in normal venture. So if we talk a bit about the investment opportunity in life sciences, why is it that life sciences is such an, aside from the obvious, you're helping save lives.

22:37Why is it that it's an incredible investment opportunity well if you do it right like we try to do and mitigate all the risk that is associated with it you can create value upon every reached milestone in terms of the clinical efficacy and safety and also for medical devices the cost savings or better patient outcome so you can make multiple within each of those milestones achieved and when I look at the differences sometimes people say there's a long holding period for these investments of course because you need to realize these milestones but on the other hand I think the exit is really feasible within five to seven years because the companies are really waiting for these new innovations to come to market, to add to their portfolios.

23:41So there's a lot of traction. And honestly, I think it's also flipping a bit, right? Because you're seeing in normal, so in normal venture, we're seeing the IPO market a bit slow. And for that reason, plus also just that companies are staying private for longer, we're seeing the holding periods just extend for that reason. Then you've got in Europe, deep tech completely on the rise, which, of course, is also known to have longer periods. So I really don't think that you anymore, it's not that strong of a critique of the life science space anymore, I find. Or at least it's not, as you say, it's not a fair critique.

24:21Yeah. So Mariette, I don't think we should dive further in because you have an incredibly exciting deck. I've enjoyed reading it, but there's also a ton of data in it that I think that I would invite people listening in that are interested and think it's exciting to reach out to you to get to know more. Because I do think that it's not necessarily one thing is just a listening experience. I don't think we'll do it justice. But the other hand is also there's a lot of data that you can always discuss how much should you put out there or not. So I would say, is there any one final thing that you would love to share before we close?

25:03I would say that it's often something that LPs are maybe a little bit not fully understanding life sciences. and they think it's binary, but I think we're happy to take the LPs along and educate them and tell them everything about this exciting sector and how we mitigate that it's not binary and that we bring these early stage companies to success, to a successful exit. And I think it's wonderful to see how your investment can have both impacts in society together with financial returns and together with the GPs that are actually also LPs. Yes. And I was about to say, and if you look at you and Jan's track record between you, you have some 25 or so investments with zero bankruptcies.

26:05So if it is binary, well, you're binary on the right side of that. So I guess that's perfectly fine. Yeah, it can't be binary then, you know, then we're doing something to steer it in the right direction. Yeah, exactly. Mariette, thank you so much for joining me today. I hope you enjoyed it as much as I did. And I wish you all the success in the world. Thank you, Andreas.

26:31Tear down this wall. It's more than just an alliance. This is a union of values. Let's start acting.