Sergey Jakimov, LongeVC: Impacting Lives Through Longevity & Health Investing

0:00Welcome back everyone to the European VC podcast. Today I have a good friend Sergey Yakimov from LaunchVC on the podcast again. He has been here before for Deep Dive on Longevity and how they think on a thesis basis, but they have now finished up their first fund, investing out of their first fund, and are ready with the next one. They have just done first close, so congratulations, Sergey.

0:25Tear down this wall. It's more than just an alliance. This is a union of values. Let's start acting. Acting. From first time to seasoned investors, the EUVC Syndicate is not just about capital. Get involved. Co-lead deals, share insights, bring in great people, and help shape the pipeline with us. Visit eu.vc forward slash syndicate to learn more. This show is not investment advice, and the hosts of this episode may be invested in the funds and companies featured. Thank you for having us. thank you for having me back it's it's a pleasure to be to see you again and uh and to hear from you again i'm desperately trying to live longer so i gotta i gotta that's all the content i can about this that that's a noble goal although i hate to to to spoil it but the best way to live longer is just not doing stupid things that science has proven to shorten your life that That's pretty much it, right?

1:29So you don't really need gene therapy straight away. You just need healthy living. That being said, so with that piece of wisdom, I'm happy to get you through the deck on longevity. Look, so I'm Sergei. I'm one of the managing partners, one of the founding partners for Longevity 1 and Longevity 2. Longevity is really the fund that, we say, impacts lives through longevity and health investing. In reality, we're one of those VCs who only invest based on potential patient outcomes. So in biotech investing, interestingly enough, if you invest based on patient outcomes, the multiplier that comes in your capital is almost a byproduct of you doing a good job, right?

2:08So patient outcomes in our industry is the key. Now, we do define longevity in a very pragmatic way as a team. And we started doing so with Fund 1 in 2021. And we're now going into Fund 2. Nothing has changed ideologically. So we really look at it as a multidisciplinary field. It's very much an intersection between biotech AI, less traditional regenerative biotech, more traditional disease-specific biotech, AI engineering, and a bunch of other, really a bunch of other spheres working on combating age-related diseases in a disease-modifying way and prolonging health span, right? So increasing the amount of healthy years that we can, that we can live.

2:50Now, I'll actually start with the metrics straight away because these, I think, seem to be important for the audience that will be listening. So the first fund is Vintage 2021. It currently sits at around 3x, actually more now, of Moik. It was 25 million US dollars, give or take 21 million euros or so, with a 30 % to GP commitment. So we actually contributed 30 % of that fund as managing partners. We've reviewed around 2 ,500 deals for the first fund, and I'll give you a statistic in a second. And we've invested in 20. As of now, we do not have any write-offs. The actual amount of pharma deals across the portfolio and the value of pharma deals across the portfolio of fund one is over$3 billion in signed commitments with big pharma from our portfolio company.

3:42So it's going pretty well. The first fund was really created around two unfair competitive advantages that we had as a team. And the first one was new access. So we really had the opportunity to tap into these major resource organizations that were working on the problems of aging biology, but also on the emerging tech in age-related diseases. So think Stanford's, Harvard's, Yale's, Berkeley's of the world. And because we... Sergei, where does that access come from? Oh, our track record with the field. So I've been a founder since 22 and also built multiple companies in biotech. I helped others build companies and raise funding in biotech and nature-related diseases.

4:22One of my partners, Gary has been deploying his own capital made in tech in longevity since 2016. Long before the fund was created, he was one of the first Czech investors into the company called Encelica Medicine, which has since created the industry for AI for drug discovery. and is now a unicorn, so close to$2 billion in valuation. So we basically knew all the right places that spin out meaningful tech in H-O-A-T diseases. And this is how we defined our focus as a fund, right? So we went after disease-modifying treatments in H-O-A-T diseases, so looking at how these groups are pairing aging biology with kind of traditional biotech approach in terms of clinical trials, in terms of communicating with the regulator, getting FDA approvals, etc.

5:07So we never really invested in fighting aging. You cannot really invest in fighting aging as of now. It's not a disease. So it is not provable clinically as of yet. So we also grew up with the KOLs. So the key opinion leaders in this emerging field. So we were able to put together one of the most recognized, if not the most recognized scientific advisory boards out there, which I will talk about in a second. But if you look at statistics of the fund one, so we looked at roughly, well, 24, 2500 companies, 1 ,200 passed into the initial valuation, evaluation. And then, you know, through the funnel of due diligence, we basically left with 20, which gives us a roughly 0.8 % conversion on the success rate of, of how much we intake and how much we end up investing in.

5:53And the whole fund one was built around the notion of building the most stellar due diligence capacity the field can experience. So we're, we're pretty proud of that one. And I think the zero write-off result also speaks to itself. Now, we also do outperform our vintage 2021 peers pretty significantly. So we're actually in the top quarter, according to PitchBook, on the current portfolio multiplier. And it is an official portfolio multiplier. Unofficially, we do have a couple of unicorns brewing in the portfolio already. Essentially, three years of investing into three and a half years of investing of fund too, which is now fully done.

6:32So we do feel quite good about the performance of fund one. Now we're now moving the whole ideology of ours really into fund two, where fund two is a very logical continuation of fund one. We're still doing early to mid-stage investing. That's our bread and butter. This is where we're best at in terms of evaluating science and sourcing the best allocations in the industry. So we are looking to raise$120 million for our fund two. Essentially, same portfolio construction logic, but we'll be deploying larger tickets because looking at the best winners and the biggest winners in fund one portfolio, we could have deployed four times, five times more money into those companies.

7:12And we're looking to raise a 120 mil for a 10-year fund, classic 220 structure, where five years would be deploying capital and five years would be managing the portfolio. Talk a bit about growing the firm from 25 million to 120 million fund size. Just what have been the changes you've made to the team? How do you think it impacts? So you're deploying basically the same strategy, but with larger tickets, how do you think that will impact the competitiveness of the investments that you do, those types of things? So interestingly enough, Fund 1 was not a very traditional setup. It was very, very much over-engineered from the very beginning.

7:52The internal deal team is now seven people. the advisory board right now sits at 14 people essentially top scientists from key institutions that we do not count the external expert network and we do not count the fellowship program which is a separate program that we run with phd candidates from columbia berkeley and stanford so really the whole team was initially built to run a much larger fund than than we currently we had in fund one, because the goal was to build the best due diligence capacity and sourcing capacity that the longevity fund real stage longevity fund could have. The interesting thing is the first fund actually spent every single dime of management fees it has collected, plus a bit more of our own money actually on building the team.

8:37So throughout three years of investing, the managing partners were not big. So everything was spent on the team resource. And that was basically our statement to the field of this is how it should be done. Right. So this is how the due diligence excellence should be built out. And, and, and there is no penny to be spared really, because otherwise it makes absolutely no sense to invest in biotech to begin with. Right. If you do not have this mindset of, you know, contributing and investing long-term from the very beginning. So, so yeah, that, that, that was, so we're now basically transferring all the over-engineered resource into fund two.

9:13we're actually adding some scientific advisory board members on the senior pharma side so people who have essentially gotten drugs from clinical trials to market approval with major pharma's but otherwise it's it's it's the same it's the same resource which is more than enough and then again i mean if you if you think about longevity bio tech people tend to think about longevity interventions it's not really true the multitude of longevity targets it kind of stems you know all around the spectrum, autoimmune diseases to your kind of traditional endocrine or oncological disorders. So it's a one plus trillion market opportunity right there.

9:51The thing about the age-related diseases is that for us as a longevity investor, the ultimate quest for a longevity drug basically means discovering a disease-modifying mechanism of some sort that will be transferable across several age-related disease areas. right so we're essentially looking at age-related diseases but we're looking at them through the lens of a merge between advancements in aging biology on the one hand and then traditional biotech approach to be able to certify something and get something to the market on the other hand so you know huge market if anyone tells you that the market for longevity interventions is really small they're just not very educated in the topic to begin with now the reason why we're talking about this is because we're in a very interesting moment where pharma is facing an unprecedented revenue erosion actually through loss of explosivity so big pharma companies are now sitting on quite a bit of cash liquidity pools that we see on the mna side but on the other hand they're looking at their key patents expiring so there are a number of big pharma companies that are very active now on the mna front just to replenish their you know 10 to 20 year horizon ip pipelines And we see it in our portfolio companies as well.

11:09The partnership window for big pharma companies with startup has moved significantly. So right now we see acquisitions of over a billion worth acquisitions happening at the preclinical stage, for example, or partnerships happening at the preclinical stage, which was never the case before. And, you know, even if you take oncology as an example, big pharma is only responsible for 14 first in class drugs and oncology developed in house. Right. Everything else that big pharma sells in oncology is actually acquired from smaller biotechs. Pharma is great at selling. Pharma is very bad at developing something internally.

11:44So for patients that are undergoing the oncology treatment, chances are that the drug that is being administered in their specific disease condition was once funded, was found and funded by a venture capitalist in an early stage and only then acquired by big pharma to, to end up in a patient. So talking about the team here briefly, the second fund has a set of four partners where we kind of come from a very diverse background and kind of multitude of experiences. So Gary, I already mentioned, he has been investing in the space as a business angel since 2016. Myself being a founder, Aurora coming kind of exclusively from the wealth management backgrounds originally, and Ilya coming from finance.

12:24We kind of, you know, provide a fairly complete picture of running a fund and conducting efficient investor relations activities. So it has been a pretty well-rounded up team. Now, the scientific advisory board is the one that is most interesting here. It's shared by Alex, who is the head of our advisory board, and he's the CEO and founder of Encilico Medicine. So Alex has pretty much single-handedly within Encilico created the field of AI for drug discovery. And then it's comprised from, you know, from Mike Levitt, Nobel prize winner in chemistry out of Stanford to very specific KOLs in, in, in their specific realms, right?

13:04Like Tom Brando, for example, the number one stem cell guy out there, uh, in the, in the academic space runs the UCLA stem cell research or writing bloodship who is running the largest aging focused lab in Harvard. And the list goes on, right? So all of these individuals are basic. Yeah. Can you talk a bit about how you use these? Because it's always, when you look at an LP, as an LP on a deck, and there's a bunch of advisors, it's always, well, what is that? Are these just faces, or these are actually real people that are working? In our case, these are, we've assembled our advisory boards literally within a week, because we knew all of these people personally.

13:46and the core activity of the advisory board is actually participating in due diligence. So scientific advisory board is plugged in into senior, essentially a senior, more mature stages of due diligence on a specific deal. And we really cannot invest internally. We have this policy that we do not invest until we do have a positive scientific advisory board opinion, two positive scientific advisory board member opinions on the specific deal on the core science of the specific deal. So due diligence is one. The second one is pipeline development, right? So all of these individuals are strategically situated in the most prestigious places out there when it comes to research and spinning out age-related disease tech and fundamental tech such, you know, AI for drug discovery or sequencing or whatever that is.

14:35So they do refer us into deals and they do play a vital role in getting us into allocations as a group. Right. And then, as I mentioned, the investment decisions. So we don't really invest until a scientific advisory board, two scientific advisory board members actually okay the core science. So they do work with our deal team pretty heavily, sometimes on a daily basis, actually, what is the most important. We're also relying on the ecosystem that we've created. So we're not just a fund, really. Uh, we've, uh, worked on perfecting the infrastructure that we have and the infrastructure that the longevity industry can use really through, you know, a bunch of other branches where the two most important ones are the health and longevity medicine society, which we helped to create and we funded, which is now the largest society of longevity physicians globally with their own protocols, et cetera.

15:32So this is the major hub for longevity interventions when they end up in people and patients. And this is how we keep track of what's happening on the longevity medicine side. Now, our other nonprofit arm, which we as partners created, is the Longevity Science Foundation. So that is a U.S.-based foundation that actually provides non-dilutive grants to very early stage fundamental research, research groups working on fundamental research and aging where, and this is our ultimate tool of a supporting the industry, of course, and we're not using fund money to do that. We're using our own money to do that, but to support the early research in the industry, but also see what's brewing, right?

16:14So what is out there in the very early science pipeline that will be investable in the next five years or so, right? And it's very important for us to map the landscape as well. So very briefly, why do we invest? Well, we invest in order to find disease-modifying treatments to age-related diseases, because we believe that the longevity and aging should be tackled as a puzzle, right? So piece by piece, and these pieces are age-related diseases that we need to figure out. Where do we invest and what are we looking for? Well, the second fund is going to invest in two major areas, which is therapeutics.

16:51So interventions in regenerative medicine and in age-related diseases, again, disease modifying mandates and preferably a combination of aging biology, kind of in traditional biotech approach. And our second large pillar will be AI and drug discovery platforms. And that is something that we, where we had a lot of success in fund one. One of our most pharma heavy, pharma deal heavy companies are, are there in the, in the platform space. so we're going to continue that trend as well so as when it comes to the entry and exit strategy for us it's really simple so we invest early to mid-stage which means that in the in the early stage we really deploy you know 30 of the tickets up front and then reserve 70 for a full on for mid-stage we do roughly a 50 50 split and we are looking at these potential x x8 x10 type of exits for us on average, just because it's a kind of a right thing to do for us when evaluating these early stage deals.

17:50Looking at the first fund, we see that some of these deals that we will be exiting next year will be capable of returning the whole fund multiple times. Some of the deals will be more modest with a 4x, 5x return. So we are kind of pulling this experience together. And this is how the whole kind of early to mid-stage strategy for us plays out. We are looking to do 20, roughly 23 companies in the portfolio of the second fund. So it doesn't really deviate from the bread and butter of the first fund and what we do best. So far, we've invested and sourced from pretty much the best names out there, you know, from Weiersdorf, Sequoia, Danaher, you name it, to the top academic institutions such as Harvard, University of Chicago, Yale.

18:36And we've invested in spin-outs from Berkeley. We were invested in spin-outs from the lab that created CRISPR in Berkeley. And we do take pride in mostly participating in the most interesting allocations out there. So we do not invest from the market. We get invited as an investor to participate in the most promising deals, just because we bring a lot of value to the table as well. Now, as a summary, how do we treat our LPs? Well, in a variety of ways, really. We do provide full access to co-investments, to our LPs. We do provide full access to our infrastructure, meaning starting from longevity physicians, ending up with scientific advisory board members, sometimes on the personal level.

19:18We do conduct very frequent LPs meetings where LPs have a chance to connect with founders directly, with scientific advisory board members directly, et cetera. And we really try to keep them on the edge of the most advanced therapies, essentially, and tech out there in the longevity space. So LPs very often treat us as a free university course in longevity, if you wish. So I don't think we have a lot of time, right, to run through the case studies, but I just wanted to mention some that are pretty meaningful for our group. One is in civil commandison, of course. So it's an AI product discovery unicorn.

19:55Initially was invested by our group before we even had a fund in 2017 and has since then yielded, you know, more than 30x, more like 65x return at this point of time as a deal. An interesting deal from the Fund1 portfolio, for example, is Unnaturl Products. It's a company developing drugs in the macrocycle space. Once we have invested, Unnaturl has closed, well, close to 2 billion in pharma deals, which is pretty spectacular. If you ask me, it's a very great, very good example, very healthy example of a drug discovery platform right there. An interesting deal from Fund One is, of course, Rubito.

20:31And it's a therapeutic company in the longevity space and a great example of how agent biology was actually squeezed into the traditional narrative of biotech. So Rubito is the first senescent cell-focused company that is now running clinical trials, phase one clinical trials in humans, and we're allowed by FDA to do that because they managed to package a very complicated kind of fundamental piece of science and senescent cells into a clinical program. Also raising very successfully, had a major deal with Byersdorf pretty fast and developing really well. A very good example of the diagnostic and preventive company from Fund One Portfolio is AOA, of course.

21:09And AOA is a Boston-based group where they basically became the first group out there to use blood to diagnose very early stage ovarian cancer, stage one ovarian cancer, which is the major killer in the female population. They've since then been invested by Danaher and LabCorp. And they're now basically completed the data that would allow them to be certified by FDA and approved by FDA. So it's a major success there as well. Other than that, yeah, I'm happy to address any questions that there are. Longevity is a huge topic. We're not even scratching the surface here. But what you need to know about us, I guess, and it's kind of the last one-liner that I have is that we are one of the, if not the most pragmatic investment groups out there when it comes to longevity investing.

21:56We've invested a lot of our own capital into fund one to prove the point really. And to prove that the scientific excellence and due diligence excellence matters. We're now very much seeing this come to life as a bet and as a thesis. And we're pretty confident in our thesis for fund two. So thank you very much. Thank you, Sergey. A lot to digest, and I'm sure everyone that's listening are both impressed by what you've built and are excited to see being built out of Europe. Maybe also just to touch on it personally, like we personally in my family, I lost my sister-in-law to ovarian cancer. So she's part of the 28 % who did not survive.

22:39Or sorry, the 82 % that did not survive. So very tough, of course, and a very important space. So to not close on that line, but I'm sure that everyone who tunes into this will have a similar story in some aspect connected to this. Let me close on a more happy note and ask you six quick questions that any longevity person will always get asked by everyone when you're seen as such. You ready for it, Sergey? I can attempt for sure. I mean, let's see if you can surprise me with any of these. I gotta be the annoying guy that asks you these questions. So most important, sleep or exercise? What's most important?

23:18Sleep. What is the most important thing to do if you want to live long? Do not do dumb things that science has proven to be harmful to you. And that is be very basic. Be very basic with your self-loving routine, which is, you know, 45, let's say 45 minutes of exercise daily, whatever exercise you're capable of, and just adopt a rule of consuming whole foods. Like if you start there, that will take you a mile. You're amazing. Now, let me hear you. The dumbest thing you can do then? Well, something that hurts you big time and you need to pay for it. Let's pick smoking. Smoking is one of the dumbest things you can do.

24:05The core drug that you would say most people would actually get something out of the core drug that people will get something out of i i'd say try to i'd say try to avoid drugs to be to begin with like try to live a life where you don't need one but uh do you do you want a specific therapeutic from me i i'd say i don't i'd say live like if you said now you got to do hormone replacement therapy or you got to do no no please please please don't just just try to be look i i know it's not a it's not a like a fire fire type of answer but you know it's like raising kids okay so when you have i don't know if you have children but but i i have i i don't but i see i see like i have friends who have small children so and with children you can be kind to children in short term and long term right and in short term, you know, they want sweets and they want iPad.

24:59So, but, but, but in long-term that would be actually harmful. So be kind to yourself in the long-term, right? Even if it inflicts some sort of, I wouldn't say suffering, right? But some sort of effort and some sort of commitment from you. And that would, again, take you, take you a mile. I'm not the one to suggest hormone replacement therapy. Honestly, I'm not the one. Final question, Sergey. How old will a one-year-old today get to be? Oh, I think the person to live to 120 was already born, to be completely honest. Not 130, not 140? I would say if we do consistently do 120, 125, it's going to be a big improvement.

25:45Because the thing is to prevent things that kill you prematurely, right? That's what prevents us from living longer. so we deal with that we live longer so great thank you for making a very serious presentation about launch vc and taking some stupid questions here in the end thank you so much my friend you're very welcome thank you

26:08tear down this wall it's more than just an alliance this is a union of values let's start acting acting acting acting acting acting mask