We’re in Munich 🇩🇪 with Cristoph Broja, Partner at EQT Life Sciences, the top venture capital firm in Europe.

We talk about his lessons up until becoming a partner at the firm. We also talk about how to invest in hot areas such as obesity or ADCs, and the importance of being curious.

⭐️ ABOUT THE SPEAKER

Cristoph Broja has been a Partner at EQT Life Sciences since 2022. Prior to this, he found himself in the life science investment scene, such as being part of the investment team of the Boston-based Gurnet Point Capital, as well as B-Flexion Capital in London.

🔗 LINKS MENTIONED

• Dominik Schumacher, Tubulis 🇩🇪 | Founder-led ADC Biotech ⭐️ | E19: https://flot.bio/episode/dominik-schumacher-tubulis/
• Claudia Ulbrich, Cardior 🇩🇪 | Being the Founder of a Rare €1B Exit | E15: https://flot.bio/episode/claudia-ulbrich-cardior/
• René Kuijten, Head of EQT LIfe Sciences, on BioStock: https://www.linkedin.com/posts/rené-kuijten-b503a1_collaboration-startups-investors-ugcPost-7293582558116663297-9Q-M

Transcript

[00:00:00] Intro

Philip Hemme: How was it to not have a life science degree or background? It, it’s quite uncommon, especially for life science 

Christoph Broja: VCs, right? I have to look very hard to find people who fit the mold, but they do. Even talking about you not having PhDs, you know, like That’s right. Or MD PhDs. There was a, an effort within our group to map the A DC landscape.

Obviously, it’s a very hot space, but especially in these hot, hot areas, you need to ensure that you find something that is truly differentiated and everybody has to learn all the time. If you don’t like that. There is no room for you in fast pace investment environments like biotech because there’s just so much innovation going on

Philip Hemme: the New 20 Zone. I’m your host, Philip, and in this show I’m interviewing the best European and biotech to help to work. The biotech industry wouldn’t exist without venture capital. The best venture capital firm in Europe is equity life sciences XLSP. So I went to Munich to catch up with partner Christophe Boyer.

He has recently become partner of the firm. I’ve known the firm for almost a decade, but it’s actually the first time I meet with Christophe offline. We talked about his lessons until becoming a partner at the firm. We also talked about investing in hot areas such as ABCs or obesity, and the importance of being curious.

So here’s my conversation with Christophe, and please hit the like or follow button if you’re enjoying it.

All right. Welcome to the koa. Thank you, Philip. Thanks for having me. It’s cool. And I heard it’s your first time you do a podcast, so 

Christoph Broja: It is. And you know, you are probably the only one who could convince me to do a podcast, especially because I follow your work. I love it. And I see who you have on. So it’s a great, great pleasure.

That’s there. It’s good. 

[00:01:51] Becoming partner at EQT Life Sciences

Philip Hemme: I wanna start with you becoming recently partner at Equity, which is great news. Thank guys on that. Yeah. I’m just wondering how, how is it going since 

Christoph Broja: it’s been going? Well, I mean, they kind of put you on the test track already a couple of months before. Right. Observe you there quite a lot of vetting from all sides.

And you kind of get into the partner role well before somebody gives you a call and says that you’ve been promoted. But it’s great. No, it feels fantastic. I’m not part of, the group that making, that’s making ultimately the investment decision on the ic. But also I’m getting more and more involved in sort of building our organization, thinking about hiring and so forth, and getting more exposure also to the broader EQT organization.

So I’m really enjoying it. 

Philip Hemme: That’s cool. That’s cool.

[00:02:48] Getting to the top in biotech without a life science degree

Philip Hemme: On the pedaling a bit back or a bit background, I think as, as also you, it’s your first time on the, on the podcast. I, I like to give more context also for the, for the audience. Mm-hmm. I mean, you studied in Germany and then you started working here.

Moved to London. Can you walk me a bit through it and what were some of your lessons there? 

Christoph Broja: Absolutely. Yeah, I, I’m from Germany. I studied business and finance here. Always wanted to go into investment, really trying to tease out what what drives investment performance. And so I started my, my career in an investment firm, called Hail family based investment firm.

And they had some healthcare exposure as well. They were owner of one of the largest healthcare wholesalers in Europe. But really I started getting closer to biotech when moving to London to work for the Bertelli family, which is a family that has over three generations built Serrano before they sold it to Merck.

Hugely successful. Financially it’s a very entrepreneurial or something. Yeah, it’s, there’s something like that with Frank at the time. And and yeah, so, so they were thinking where to deploy capital. And at the time the decision was made to set up a fund in Boston called Garnet Point Capital, around Chris Ocker and a team of, of operator investors.

And I was lucky enough to be really part and parcel of of that effort. Moved to Boston with my family and really that’s when I started investing in life sciences full-time, about 10 years ago. And it stuck with me. 

Philip Hemme: How, how was it, or, I mean, how was it to not have a more. Life science degree background.

It, it’s quite uncommon especially for life science 

Christoph Broja: VCs, right? I have to, I have to look very hard to find people who, who fit the mold. But they do also, even talking about not having PhDs, you know, like That’s right, that’s right. Or MD PhDs. No, it’s exactly right. I think look that in, in, in career planning, at least for me, it was true.

There’s always some serendipity. And then you make conscious decisions along the way. It was certainly serendipity that, I started an investment firm that had a deep passion for biotech, the Serrano founders. And I made the conscious decision at the time to stay there and focus, because where private investing has moved over time is, is really focus and value add to the companies that, that they invest in.

And yeah, so for me it was really learning from scratch when I moved to Boston, what biotech is all about. Drug development, ip CMC, and learning this from people who come from the industry. Both pharma. Chris obviously a great Pharmac. C exactly. Sanofi C No, IC now he’s at Biogen. Exactly. Obviously wealth of experience and how to run big pharma companies, how they think about commercial opportunities, et cetera.

But he also brought in people alongside him who came more from the biotech, arena. And yeah, that’s really where I learned to look behind the curtain of the financial numbers to see what is actually driving. Investment performance and risk. And I really enjoyed that. We had a fantastic team deployed about 2 billion into life sciences companies.

And then yeah, moved back to Europe and, and then the opportunity came up to, to join EQT. I actually think not having a science background to maybe answer your question a little bit more directly I see this as my superpower actually. Because it allows me to take a step back and really think like an investor, meaning how does this make money?

Philip Hemme: Yeah. 

Christoph Broja: And what is the level of risk here? And I feel that versus being attached to the science and exactly getting enamored with the science and, and, and therefore, I, I think it’s, it’s a nice compliment to the team. I mean, we obviously have a fantastic team of, of people with scientific or medical training on the exception.

And you couldn’t build a life science venture fund with people that just look like me. But it’s helpful to every now and then have somebody who ask the question. So what? Right? It’s great that you know, you, you get this receptor binding that you can do this and that with the immuno technology, but so what, what are we actually doing?

Because at the end of the day, biotech is not about, you know. Writing scientific papers, it’s about developing medicines for patients and making a financial return for our investors. Right? So it really helps me to stay cool headed to follow the data, follow the numbers, follow the evidence. And I think that’s, that’s also a helpful contribution to the, to the team.

Yeah. 

Philip Hemme: Okay. And you, you sound like also very curious slash like, meticulous on, on learning. Like 

Christoph Broja: Absolutely have to. I mean, that’s true for everybody, right? Even, even for folks who, who who started their career coming through through it from the ACA academic side and the scientific background, everybody has to learn all the time.

If you don’t like that, there’s no room for you in fast paced investment environments like, like biotech because there’s just so much innovation going on. And absolutely you have to be intellectually curious. All the time to learn new things, and I really, really enjoy that. It never gets boring.

That’s cool. That’s good. 

Philip Hemme: Hmm. It’s, it’s very it’s very inspiring actually. I have to say also, I mean, I have a bioengineering background, but I always like more investment world. I, I started doing a bit of investing as well now more in publicly estate biotechs, but it’s quite, I mean, but at the same time, I’m not like PhD, MD or whatever, like super deep into science.

So it’s so it’s, yeah. It’s hard to see like different 

Christoph Broja: path as well. Absolutely. And it forces you to, to have a very collaborative approach. I rely on my team and the folks with, with deep scientific expertise to really dig into the detail of mechanism of action, how it works and how it compares to others.

So yeah, I think that’s that’s also what I try to encourage within the team that we collaborate closely. But equally, I’m also challenging folks on the commercial opportunity and where we are right now in biotech. I think there’s a strong product focus. What is the positioning of a certain product?

You know, what are the cost of goods of this product compared to to others? I think that’s a question that is like 

Philip Hemme: advanced therapies. 

Christoph Broja: That’s precisely right. Yeah. And is there, is there going to be a, a commercial opportunity here? I’m usually the first who goes to ask these kinds of questions.

Yes. 

Philip Hemme: That’s good. I think we can, we can dig deeper into, into positioning. 

[00:10:40] Moving back to Europe

Philip Hemme: Maybe last question, you said you, you moved back to Europe, back to Germany. What was the decision making there like? 

Christoph Broja: Yeah, I think so my wife and I obviously took the plunge, moved over to the us lived there for five years and, and we really enjoyed our time in Boston.

Amazing city. It’s absolutely amazing city. Absolutely. But, but I think long term we saw ourselves more in Europe. We felt there’s a, as a maybe more a cultural fit with how people live their lives here. So eventually we wanted to come back to Europe. And that was really at the time, we had to decide do we want to go for the green card or not?

Also my daughter was getting into a age where it would’ve become much more difficult to move after the she enters secondary school. And so yeah, we, we went back first to London, actually where we love London. And we lived there for, for about five years before we went to Boston. But then this opportunity came up and I got the call from my partner, jr.

Do he wanna join us? We just you know, there’s a lot of growth opportunities for us. But you have to move back to Germany. And for me coming back to, oh, I’m still 

Philip Hemme: there, I guess, but 

Christoph Broja: yeah, exactly. I, I know in this case it was actually Germany building the team here. And yeah, for us it was getting closer to home.

Munich is a fantastic city. So yeah, especially when it’s sunny like this, it’s, it’s actually Boston weather. It’s usually, you know, quite crisp outside, but blue skies and sunshine and yeah, it’s amazing quality of life. 

Philip Hemme: Yeah, sounds, I mean, I, I finished my studies in Boston for a year and I had similar, I mean not five years, but one year.

I have a similar feeling and a lot of Europeans I meet there, they have similar challenges. And I know it’s amazing that you had the opportunity as well to, to come back, because I know a lot of Europeans. In Boston, especially in, in the US after a few years, you have built your network, everything, and it’s hard.

Exactly. Sometimes harder and harder. Hard come back. Yeah. But you don’t get the same level of opportunities. 

Christoph Broja: Absolutely. Especially once your children go to secondary school. It built their relationships. It gets a lot harder for them to, to move and adapt. But my children were still young and yeah, they adapted really well, quite well.

Philip Hemme: That’s 

Christoph Broja: cool. 

Philip Hemme: That’s cool. 

[00:13:19] Investments in ADCs, Tubulis, Cardior

Philip Hemme: Talk, talking to moving to, to more, to equity. I mean, what what’s pretty cool about, about you as well is that, as you said on the, on the podcast, so it got some guests and I just, when preparing and talking to me, I realized you were invested in, in cardio on the board and you invested in Tubus, which Dominic and, and Cardio were on the show.

We fought, which is pretty coolest. And both are like, I mean, at least so far, at least, at least Claudia did, aio did a amazing, amazing exit. So, how, like, I’m curious on, on your end, like how I’m always, I, I like the, how the investment came about. Like what’s the story behind the investment? We can start with cardio.

Christoph Broja: Absolutely. Yeah. So cardio was actually a company that was already in the LSP portfolio at the time JR. And Karen, who, who actually now moved to work for MSD venture Fund they originated the investment in 2017, I believe. But then when I joined immediately they, they placed me on the board and, and yeah, it was, it was fantastic.

I was really stunned to see that kind of quality of biotech company in. H Nova of all places, right? But then you learn that actually H Nova has a pretty prolific medical university and, and medical center associated with it. And you meet people like Thomas Tomb really scientific entrepreneurs who are crafty and, and entrepreneurial want to build something.

It was a fantastic ride. We had a, a great dynamic at the board, great colleagues, set the company up for success in, in, you know executing a phase two study in post mi heart failure. And then of course the, the offer came from, from Novo, and we had to manage that quite, quite carefully.

Because it came at a time where, you know, typically you, you, you see transactions happening. Post phase two. Right. And this was a at a time where we were in the middle of phase two. So there, there, you know, we had to, ensure that there’s a lot of momentum within the deal. And yeah.

Novo came through and we’re all happy with the 30 RF and that the terms were right. Yeah. Which I’m obviously not gonna talk about there. No, it was a good, it was a good, good deal for, for everybody. And we often, and yeah, we’re, we’re obviously continuing to keep our fingers crossed that there’s a future for this product and Novo is probably the best company to pick up this asset and, and actually bring it to face.

Philip Hemme: I remember, and for people curious, they can check out the, the interview with card was, was a great conversation as well. And I challenged her a bit on the, also on the timing and on the, on the return. And what I remember also on the, on the. Momentum, as you said, or the synergies with Novo. I remember she mentioned they were like launch additional phase twos, a additional indications like almost right away, which is absolutely quite, I mean, it’s not rare in biotech these, but it’s not like that common that it’s like announced on the day of the deal that it starts like Yeah, 

Christoph Broja: that’s exactly right.

And, and of course in cardiovascular studies become very large, very quickly as you move towards phase two and then into phase three. And if you wanna really, you know, raise the value of this modality, I think you need to invest a lot into later stage trials in multiple indications. And that’s exactly what novel is, is hopefully going to do.

And what’s, what’s what’s somewhat how do I say somewhat interesting is that the, the person who signed the term sheet is actually somebody who I used to work with at Garnet Point as well. Dave Moore who’s now president for Novo in the US and, and SVP of business Development. So yeah, we had a chat afterwards and, and it was quite quite the coincidence.

That’s cool. 

Philip Hemme: Biotech is really small world, 

Christoph Broja: small world, small industry, 

Philip Hemme: every small world. You can talk about this, about the, how, how small the world is. Maybe on, on on two, just to, I remember when we, when we had a quick call before, before the, the recording, you told me like, we looked at all basically ADCs globally and Tubulus really stood out, like where Differentiate.

Can you expand a bit on like what makes them like so unique or to, to your eyes, but just the signs I guess also on the. 

Christoph Broja: Yeah, I mean you, you’re right. So there was a, an effort within our group to map the a DC landscape obviously is a very hot space. But especially in these hot, hot areas, you need to ensure that you find something that is truly differentiated.

And, and so there was an effort made to identify the top companies in that space, really also on a molecular level, benchmarking different ADCs and what is the sec, what is the secret sauce o of these firms and how do they compare and do they have ip or did they just license different components?

And Tubulus really stood out because it combines a few aspects that we really like, which is they own their technology platform, the P five. Platform particular, but then also looking at the Degrader antibody conjugates, with the Alka five platform, they own the IP around that, but at the same time, they were pursuing it in targets that were not too crowded.

Kind of a Goldilocks, type of, of target space, if you will, where when you look at the number of programs in the a DC space, I mean a lot going after her two or some of the more validated targets, which may be more de-risked, but then you get back to, okay, but. How I going to compete in this space, which is going to be very crowded.

And then you have the completely unvalidated targets where maybe you only have one company pursuing a completely novel biology which is very exciting if it works, but tends to carry a little bit more risk. Tubulu was going after targets where others had tried but failed. And so we could build an investment thesis on, well, can you actually fix the issues that others have experienced?

So we did a lot of reference calls with KOLs and people who worked on these targets previously to figure out what were the issues, why have others failed in this space? And was it related to. The target and target mediated toxicity, or was it media or was it related to the a DC construct? And the picture really came together and was unanimous that the targets were good targets.

People were very excited about those targets. But the a DT constructs was the problem in particular the stability and homogeneity of the, of the con of the a DC constructs. And that is exactly what Tubus is solving as Tubus has figured out a way to design these linkers in a way that they’re very, very stable in circulation, but once they reach the tumor and get internalized, they cleave off and have a nice bystander effect.

So you, and, and, and so this was the hypothesis. And then in addition to that, that was backed by very robust preclinical data package where they also benchmarked versus the standard of care. It was really extremely compelling. So you had this, this combination of valid, you know, validated targets.

Others have failed. Now you have a technology that could unlock the potential of these targets. And then you layer on top of that a team like Dominic and Jonas and his cruris, which yeah, it’s just super impressive, you know, especially the fact that, you know, Dominic has brought in people who have decades of experience and, and brought them around him who are now driving this organization forward.

Really impressed us. And then we found some extremely, like-minded investors with Next Tech and Frazier and Deep Track to build this syndicate with us. And, and now we’re off to the races in the clinic treating patients and very excited for what’s next for the company. 

Philip Hemme: Yeah, that’s cool.

Yeah. Can check out the interview. It’s yeah, it was also a, 

Christoph Broja: it’s, it’s one to watch. 

Philip Hemme: Yeah. Yeah. It’s one, it’s a good one to watch. Yeah. And I, what you just said struck me on like, even mapping the whole a DC space and talking to all the Ks, I’m always like, impressed, but at the same time, I, I’m never sure like, how in detail does like a VC go on the due diligence slash on the like, but it sounds like from what you say, it’s like a lot, lot, lot of work.

Christoph Broja: It takes to know the whole space and, and, and you will find investors with, with sort of different approaches. Some are maybe a little bit more momentum driven, jumping on themes and, and, and sort of you know, hoping for a quick exit. And then there are others who do deep diligence and there are a lot of those as well.

And we probably more in that camp would take our time, to really ask the probing questions across not just the science, but, but also the ip, the CMC, the commercial viability, not just just speaking to scientific KOLs, but we also interview pharma to see where it would fit into their pipelines and how they are thinking about sort of the, the next wave coming through.

And then, yeah, you, you go to through all the data, have they used the right, the right models? What is the construct of their antibodies? Are there, is there a reason to believe? What is the sort of the biological reason to believe that they’re, they have the better mousetrap? Is it fc silenced, yes or no?

What have others done? What kind of toxins are they using? We have a structural biologist on staff and, and three PhD oncology. So yeah, it’s, it’s a lot of work. And then you pull together a diligence package and you’re actually working with the company at that point to to attract other investors and we exchange work and, and so forth.

Yeah. That’s good. Yeah. 

Philip Hemme: That’s because I, yeah, I feel like in, I also, the, the size of the round mix, I guess. Justifies a bigger due diligence, I guess you, you guys were the first one to kind of lead the round and find the, and attract the co-investor as well. So I 

Christoph Broja: guess, yeah, we were taking more of the risk and I worked hand in hand with Next Tech, who’s also an oncology focused fund to co-lead this round.

And really also exchange notes from, from from our work. The IP work, for example. We, we did that together, right? ’cause that always cost quite a, a lot of money. But yeah, no, we, we, we certainly pooled together the, the, the remainder of the syndicate, the term sheet and then, yeah, got the, got the existing syndicate on board as well.

Philip Hemme: And you were leading all of this in this now, like 

Christoph Broja: That’s right. 

Philip Hemme: Yeah. So it’s your full, like, it’s your first like full. That’s 

Christoph Broja: a zero full investment. Exactly. And I worked obviously hand in hand with a deal team with my colleagues, John, Philip, and Max. That’s usually how we set up sort of a partner, a backup partner, and two or three, more junior members of the team.

And then we present it to the, to the whole partnership. Yeah. 

Philip Hemme: Okay. Yeah, that’s I’m curious on the, on like, on that approach, and this makes me think about before, before coming here, I, I watched the video of Renee on the bio stock Yes. Talking. One thing that struck me, and that was an HCO that that that takes by in here is like you said, you’re looking at 2000 opportunities per year and you invest in like 10 or around 10, which is.

Crazy selective. And on top of looking at 2000 opportunities, you probably look at all the spaces possible, which I, I’m wondering basically if that’s the best approach for life science vc. I mean, you said some people have a bit different philosophy, but I guess for you guys, as with the resource you have in the front, you have, you have a, you’re in a position where you can basically do it.

Yes. So it, it all aligns 

Christoph Broja: basically. It does. I mean, you have to have pretty rigorous. Filters you can spend an equal amount of time on, on all of these two thousands of course. And, and, and so they’re, you know, quick kills in terms of, yeah, it’s just not where we invest. Either it’s stage related or it’s geography related.

It’s just not a fit. And then you quickly whittle it down to a ma more manageable number of opportunities. And then, yeah we have, a fantastic team of, of associates and, and VPs who, really have, have managed to get. Very good at sorting out this deal flow, identifying the killer questions early on, maybe doing one or 2K OL calls or talking to other investors to, to quickly get to a, a point where we can jointly say whether or not we want to prioritize it and spend any time on it.

Philip Hemme: That’s, that makes sense. 

[00:28:28] LSP 7, biggest venture fund in Europe

Philip Hemme: Talk, talking about the fund actually, you, I saw the, was still, I think the most recent fund was LSB seven. It has a, a venture venture fund, which was a billion. Yeah. Euros and to my knowledge, is still the biggest at this venture fund in 

Christoph Broja: Europe. It’s a bit semantics. Yeah. Why?

Yeah. I mean there, there’s now this, this differentiation between wind and growth. You could also argue it’s all sort of early stage and late stage venture. But we, we don’t strive to be the biggest we want to have the best reputation in the market. So yeah, it’s, it’s sizable. It allows us to put meaningful capital to work into the most promising companies in Europe.

And yeah, we’re, we’re sort of very happy how, how it’s going so far and where we have placed some of our that’s cool. 

Philip Hemme: And for the, for the audience, for context as well, on the, on the venture funds, I mean, I think one that has been very successful recently, and you do co-investment with them is, is Fabian.

That’s right. Which, but I think their venture fund was a bit smaller. I think it was like what, 890 million Euros, at least on, on October, 2024. But then they have a gross fund, which is a bit larger. I guess that’s maybe what you’re refer, referring to as well. Yeah. Which I mean. I can tell at least from, from talking to research in the industry, definitely LSP stands out or LSP equity stands out as definitely in the top, if not the best.

I I remember one like partner. Yeah. 

Christoph Broja: LSP as as a number for us. The number one, like Yeah, I think that’s what I mean. But NSP has been around for over 30 years and they have invested in over 150 companies. And I think over that time you learn a thing or two about how to assess the risk. ’cause ultimately, and that may also be a little bit the difference to the, the private equity world we’re underwriting risks and it’s always a judgment call.

It’s not, it’s never really black or white and a and a matter of pricing. It’s more, am I comfortable with the level of risk I’m taking here and do I see an opportunity to develop this in a way that I. Creates a lot of value for the fund and ultimately for our clients. So 

Philip Hemme: that’s good. Yeah. Yeah. And I, I was there and at, at the end of the day, I mean even, especially in European life science VCs.

The competition is not that, that crazy high, and it’s more like a lot of co-investments. And 

Christoph Broja: it’s a small world, as we said, small world. It’s an ecosystem. Yeah. If, if you look at the nut at the capital required to move all these companies forward that are cropping up in the, in the in, in the European biotech ecosystem, you need to.

Pull your resources also on the investor side. And nobody has a, has a patent on, on good ideas here. So we, we absolutely love to collaborate with peers in the industry both the earlier investors who, who take more risk on the early stage side and, and some of the peers who invest more on the later stage side where you need to pull your capital and resources to build European champions.

Philip Hemme: Du and bringing you, you mentioned Deep track. I mean, bringing Yeah. US investor larger funds, like largest laser station. I could, I, I just wanted to mention also for the audience, I mean the, I think I have two the two other funds with, with Bin that really also stand out in Yuba Sophie, Nova and ING Worse, which also both have been around for almost the same age as, as as SP, and were doing remarkably well as well.

And. They’re both on the, on the Shores though, which is 

Christoph Broja: yeah, I saw that. No, absolutely. No, I, and we know, of course, we know these groups very well. We meet them on a regular basis, exchange notes. It is a collaborative environment. And yeah, that’s also our philosophy. We’re very collaborative.

We’re not big ego type people. We like to work with our European peers and the US because at the end of the day, if you take a step back, and maybe that’s also the, the benefit of working for a group like EQT, life Science Venture Capital is a product that you sell to your clients, which are LPs and LPs limited partners.

They can invest in life science, venture capital, or they can invest in a. Oil and gas or infrastructure or you name it. Like, so as, as an industry or as a product, we need to make sure that we are also attractive to our client base. And that requires collaboration and building great companies that ultimately can be very, very valuable.

And where we can all make good returns. Yeah. Which makes us attractive as an asset class. 

Philip Hemme: Yeah. No, that’s good. And at the end of the day, if you think as an industry it helps have more impact for patients, I mean, which 

Christoph Broja: leads to return, but it’s at the end of the day, and when you talk about European ecosystem, where we’re still, behind the US of course, in terms of, you know, funds being able to write larger checks for later stage clinical development, that’s also a reason why we need to work together with other funds to be able to shoulder together these, these kind of big ticket investments. Yeah, 

Philip Hemme: I, I was about to ask you because I feel from my experience in the little experience in the US that there’s definitely more competition between the funds Absolutely there.

Yeah. In biotech or in tech 

Christoph Broja: in general. Yeah. Yeah, you can, no, that, that, that’s also my sense, although there’s also something you called the Boston Biotech Mafia, and I, I’m sure there’s a lot of collaboration also between funds. But it is also true that while the ecosystem and the number of companies in the US is much larger, there’s also a lot more competition because there are more funds very, very large funds, which you have a little bit less in Europe.

Yeah. 

[00:35:07] Observing the Chinese biotech scene very closely

Philip Hemme: And while we talk about geographies, I’m curious also what’s your, your positioning with, with China? I mean, it’s kind of A-J-P-M-I feel like that was one of the hot topic. I feel like lot of even European VCs have Chinese LPs now or even some do like Chinese investment or licensing assets.

I think, who was it? I think, was it Fabian who did one what big deal with it? Or, or 

Christoph Broja: or quite a few now in license. I say I made a big, big, yeah, exactly. Now there, there are quite a few now. How was your approach there actually. Yeah, I mean, look, we don’t really care where the innovation comes from come from China Europe or us.

We we’re genuinely interested to, to fund the best science no matter where it comes from, and we’re quite en encouraged with what we’re seeing, coming through the, the deal flow pipeline from China. The qualities, very good. I think there was, I don’t know whether it was 2022 or 23 was the first time where more assets got licensed from China into the us Then the reverse.

So clearly there’s a, there has been a breaking point in innovation and, and licensing innovation out of China. Our approach is that we. Are very, very carefully monitoring the space. I think we saw about a hundred over a hundred opportunities from China last year. Actually not just China, but more broadly Asia.

But China for sure has the largest quantity also because of sort of the structural challenges that, that China is facing with respect to funding the, these biotechs 

Philip Hemme: and right now massive amount of money into biotech. Exactly right. I think, what was it in 2023, I think also there was as much or more investment in China than all Europe together.

That’s right. 

Christoph Broja: So you cannot ignore it, and we are not ignoring it. We’re actively involved in, in numerous afterwards as well, let’s say. Yeah. We’re actively involved there in, in numerous discussions. And what’s. Again, a, a massive benefit that, that we have is we, we now have, people on the ground because, EQT also acquired a manager called BPA, now EQT, private Capital Asia, one of the largest investment firms with offices all over Asia.

And we’re an active dialogue also with our colleagues on the ground there. We probably won’t invest directly in China. We’re also looking more at sort of the new core model that, that now everyone is looking at, but we’re extremely selective. So our approach would likely be to, work together again with one or two other funds, find interesting assets and then build a management team around that to develop these assets for the Western western market.

Because typically the out licenser retains China rights, makes sense. 

Philip Hemme: And I, I mean, at the end of the day, you also have more expertise, even when you talk about management teams hiring them in Europe, or That’s right. Europe or us, but even more Europe, I guess here from more, just more connection.

While everything like 

Christoph Broja: ab absolutely. We, we have a, a deep network of operators or former operators that used to work at companies that we were invested in, that we could bring into these new calls. ’cause ultimately somebody’s gonna have to push the assets forward and develop them. Right. It’s all about people.

That’s right. 

Philip Hemme: Yeah. 

Christoph Broja: Yeah. That’s good. 

Philip Hemme: On the, we talked, yeah, we talked about everything. 

[00:39:05] Marriage between LSP and EQT

Philip Hemme: I think I, I was about to ask you somehow, how is it going, the merger between LSP and equity? I mean, you mentioned some of the benefits already. I’m curious if there are, is there any downsides? Because. 

Christoph Broja: Any downsides apart from the annual compliance trainee that we now have is very rigorous.

And be careful what you say in your podcast. That’s right. Yeah. I’m sure you will, you will help me and cut it out if it’s, if I’m leaning too far out the window. But no. Look, I mean, if, for me, this is a, a really, a match made in heaven of two top-notch investment organizations with slightly different focus.

And you know, EKT, now one of the premier private equity companies globally, not just in Europe, certainly the lead leader in Europe, but, but also you know, one of the top players globally with a deep, deep focus on certain sectors, of which healthcare is probably their most important sector.

So a deep commitment to the sector. But of course, it’s a sector that is very complex, is driven by, you know, regulation by commercial trends, but also to a lot of ex extent by innovation. And when you want to know what effects my companies, my mature companies, 4, 5, 6 years down the road you need to look much earlier at what is coming through the innovation pipeline.

And that’s exactly where we come in, right? Because innovation is what we’re dealing with on an, on a daily basis. And so I think the EQT healthcare platform, allows us to exchange knowledge, both ways. What is coming through the innovation pipeline, what could be relevant for them at, at some point.

Equally we exchange network. EQT has an unbelievable network of industrial advisors, and these are typically very senior people and CEOs of large companies which we have access to. And then yeah, leveraging the, the broad infrastructure. We’re sitting here in the Munich office is a very nice, very big office, and we have offices all around the world now.

We, we we’re just at JP Morgan and we took quite a few meetings in our San Francisco office from EQT. We have a, a big office in London. We have a, a very big office in New York. And we, we can use this as a team. We can offer this also to our portfolio companies. We or our peers in the industry if they need to.

Crash somewhere. We offer office space. But beyond office space, of course, there’s also the, the, just the, the synergies you get, by running the fund business, right? People in fundraising, people in it, and so forth, which all of this allows us to really focus on our investments. And, and there I see massive synergies between the two groups.

Yeah, 

Philip Hemme: that’s that’s good. And I think that it was a bit of a trend. I saw that there is a, quite a, a few VCs was right, exited, which I mean, adding worse to Carlisle. There was a, to, I, I forgot which which which private equity. So NVA got, Apollo went in, acquire, but they went in quite with a sizable, sizable chunk.

I was curious to see how it evolved, but so far seems like. It’s pretty positive and it’s actually private equity, very hungry for investing in innovation and innovation in healthcare especially, and they’re bringing quite a lot of capital in it. 

Christoph Broja: So, yeah, I think, I think you’re right. Although I do think there are differences between different groups.

And, you know, coming back to the collaboration theme what, what is really nice between LSP and EQT is a fit of culture. EQT doesn’t just see the combination as adding another product that they can offer to LPs. They really see this as a way to become the leading healthcare investor in the world.

So there’s a lot of, they are almost today, they, they are already clear, but it’s, yeah. I didn’t know they were so big in healthcare specifically, right? That’s right. They have deployed. Over a hundred billion between 2016 and 2023. That’s crazy. And they will continue to be very active investing in healthcare and in the life sciences.

Well, as with 

Philip Hemme: earlier, basically than the current, other than the, some private equity we joined the, the, the, were having to join two, three years. That’s right. Ago. Okay. They were, that’s good. I mean, I guess they, they also built a very good position. I mean, when you’re early and when everyone joins after you, usually it’s really good place to be, I 

Christoph Broja: guess That is right.

Yeah. They, they certainly picked out the, the pearl. 

Philip Hemme: That’s good. Talking about taking, picking prayers. One, one thing we said is also about we talked about trends. I’m curious on like, I mean, you mentioned a bit about ADCs, how you approach it, but, how, how do you approach, like, know, like, like obesity, like.

Which was like super hot. Super quickly. Do you have the, do you have the same approach for all the, like hot markets or how, how do you, like how do you see it? I mean, how do you see obesity specifically and how do you see like these hot trends like? 

Christoph Broja: Yeah. No, I think, if you, if you look at areas that are attracting a lot of investment from pharma or from VCs, I think you, you it behooves you to look into those very closely especially if we’re talking about gigantic new commercial opportunities like the new obesity drugs.

And, and so when you see these trends, you, you start by putting together a, a landscape. So you’re starting to talk to Kals to really understand where the unmet needs still lies. ’cause we have clip once now. Right. And sometimes it’s also quite counterintuitive. I just read a, an article the other day where pharma companies are trying to move a little bit away from a sole focus on.

Weight loss, moving more towards the quality of weight loss and added benefits of drugs, right? So you need to be very mindful where sort of the, the commercial environment is also moving towards. And that’s exactly what we’re doing constantly. Also you know, we obviously get a lot of inbounds of opportunities, and, and we’re talking to I would say a, a close group of maybe two or three KOLs on a regular basis to really try to understand how these treatments would eventually fit into the, the bigger picture of the treatment landscape.

And sometimes it’s a little bit unexpected where, what, what you find, right? We just invested in a company called Ana Therapeutics which is focusing on obstructive sleep apnea, which I. Happens to also be related to patients who are obese. And this is gonna be a somewhat tangential bet on on, on sort of a, a market that is evolving.

And I don’t know if you followed, but Lilly got a label extension also for their obesity drug in ob an obstructive sleep apnea. So this is a market that is now developing and we are, we would be the first, this will be a nasal spray to cater to the same patient population. So it’s, it’s going after a similar market, but it’s not the same because yeah, when you look at the obesity pipeline and you see out of the a hundred or so programs that are coming through the pipeline 80 or so are some version of another Glip one.

You do have to ask your ques the question if you’re gonna have 80 Glip ones on the market. Right? And that is, the answer to that is pretty clear. And which one will it capture? The market share. So, so having a, a very clear understanding of, of, where the unmet needs still lies and, and then going and try to identify the companies that are trying to address those is, is how we, how we navigate.

It’s the same in the a, d, c space, right? We talked about it. And, and then you look at the different components of the ADCs and, see who, who’s using the toxin that we believe is the most promising one at the time and so forth. Well, one thing I, 

Philip Hemme: I, I like also on the especi, I. Not equity and you guys specifically?

[00:48:41] Focus on M&A vs IPO

Philip Hemme: I think probably most, but it quite struck me, it was from a conversation with, with gr actually I think it was in Vienna, and he, he told me like that very focused on m and a, more than IPOs. Very, I guess very connected to how the European market is also structured, but also that you were, you mentioned also earlier that you’re really testing m and a and pharma appetite.

Yes. Like very deeply. Yes. Which I think in funds are, is common, but I’m not sure if it’s that common to go that much in details. Like can you expand a bit on that? On like why you focus so much on m and a versus like pub public listing, for example, and like 

Christoph Broja: Yeah. How you Yeah. Yeah. I think it’s, that has always been a focus for LSP is trying to understand who could ultimately buy this company and, and really advance it into late stage clinical trials and commercial.

’cause that’s, yeah, I, I think the, the unwritten contract the unwritten innovation model of biopharma, right? Where companies typically, if they generate very exciting data in a, in a POC trial pharma will look at it. Or at least there is a belief that pharma could acquire this company at some point, which also oftentimes support a public market valuation of a company.

But yeah, the way we go about it, the exit thesis is a fundamental part of our investment thesis. So. Before you even invest, you already think about how you sell the company again. And yeah, the, the way to validate this is to look at pharma pipelines and, and see if they have gaps. And then talk to a couple of pharma bd people to see how they, how they see the landscape shaping up.

And, and also confirm the, the appetite for something like the product that you’re backing by the time it’s a little bit more de-risked, right? Because they, they don’t like too early stage. They don’t like to too early stage. And, and that has always been the case, right? That’s why the system works, where the VCs will, will take a little bit more risk upfront building a portfolio.

And then pharma is more than happy to. Pay substantially more for a more de-risked asset. So yeah, really supporting that exit thesis, trying to understand where the product can fit into the pharma pipeline. Validating this with, interviews with pharma BD teams and r and d teams is, is crucial too to how we work.

And by the way, also talking to equity analysts and bankers who are an important source of of intel on, on how pharma thinks because they, they dabble in this sort of on a, on a daily basis, 

Philip Hemme: like, yeah. And how do you, and what I’m curious also on this is like, how do you match the timelines because.

Some, I mean, BD pharma, they’re like looking, obviously they look short term and long term, but some of them seems like more short term or okay, we make a deal like now, and they look at the trend and like, okay, we want to all go into the same thing. And I can tell you one thing now, or we are really hot on this, but like, does it align with your time and which is like, you invest and you exit like five, seven years down the road.

I guess some, like how do you fit these timelines? Is it true that there is some? Yeah, 

Christoph Broja: yeah. I, I think, I think it’s a very good point. I think, if you are investing in a platform technology, where you may not even know the indication you’re going after, I think those, pharma interviews may be less relevant, because you don’t have really a product yet to talk about.

Right. But as you’re moving towards later stages, clinical stage assets that conceivably could reach a value inflection points within the next two to three years, then I think it’s, it’s much more useful to have these discussions. Yeah. So yeah, that’s, that’s probably the approach and to also sort of juxtapose m and a versus IPO, both are obviously very, valuable let’s say exit route.

Although IPO I’m sure you’ve heard this before, is not an exit, it’s a financing. But it allows you then over time, which is up to, gets to liquidity. That’s exactly right. And even, even there, I think oftentimes public market valuation is, is supported if people believe that this company could be acquired by pharma.

So yeah, I think it’s just a, a part and parcel. But that having been said we’re, we’re not, we’re not buying companies to sell them. We’re, we’re very much focused on building the best companies we can. And sometimes you have to also go a little bit against the grain and even the pharma doesn’t really know what they will want three to four years down the road.

Right. So you also gotta have to take some scientific risks or, or leap of faith because you believe that there will be a place in the marketplace for a certain product in a certain indication. That’s good. 

Philip Hemme: And maybe on the, on the trend. On the trend as well. What, one thing I, that, that comes to my mind is obviously, I mean now you, I mean you’ve quite a sizable amount of, I mean, these dozens, I just did a, so I, I just did a top, top 25 biotechs in Europe, and I was quite struck actually that there were like.

Basically 20 really biotechs that are over $1 billion evaluation. Most of them listed, double listed nasdaq. But I mean, now you’ve, and, and some like Genmab and Argen X and BioNTech, which are in the like 20, 30 billion archite, which is crazy. So that, I mean the, the, how, how do you, how do you, how do you see, how, how do you look at this?

Like, I mean, it seems to be, there’s quite a, and compared to 10 years ago, quite a like momentum and quite a sizable. 

Christoph Broja: I mean, it’s hugely exciting to have evolve. Yeah, exactly. Here. No, I think it’s it’s hugely exciting. It’s a great role model for up and coming C CEOs. And we also connect our portfolio company CEOs to the leadership of, of these companies, whether it’s Tim from Argen X or or, or folks at Meru to sort of copy a little bit the playbook and, and make, prepare them for what’s to come if they decide to go down the same path and, and do an stack listing.

And we need those, we, we need those role models also for the broader innovation ecosystem in Europe. They’re crucial because they’re driving innovation in a certain area, hugely financially successful. But also from there you know, folks will leave those bigger companies to found their own, companies and, and startups.

So it’s, it’s very encouraging to see that we still have some, and an increasing number of, of champions. But of course, as you already alluded to, either they’re dual listed or they go straight to nasdaq. Because unfortunately, we don’t have good capital markets in Europe, which is unfortunate because, yeah, on, on paper, it, it’s actually not that difficult.

It wouldn’t be that difficult to establish that. But the problem is that we ha are too fragmented in, in Europe. And so it’s, it’s a natural move by boards and and executive teams to want to list at NA Nasdaq. Not because they need to be or want to be in the us but it’s because unfortunately we don’t have the capital markets to support their liquidity needs.

Philip Hemme: Yeah. That’s yeah, I heard about, I mean, I heard, and I mentioned it was, it was Tim, at least from about the European nasda in like Utah, he said like, yeah, he has been hearing this for the last 20 years. Yeah. He’s not sure he will see it corrected in his in his days. Like yeah, it’s unfortunate.

But some, there’s some motivation recently at least, like, I mean, I even hear the heard Mike Holmes say, okay, we need like a European capital market. I mean, it’s pretty like encouraging at least that there’s even at the top level that there’s an understanding for 

Christoph Broja: the motivation to shake actions like yes.

No, I, I think that would change quite a, a bit on how we think about the capital formation strategies for biotechs right now, especially for biotechs, because 

Philip Hemme: one national market is just too small. 

Christoph Broja: It’s too small, but it’s, it’s not just the size. It’s also the capital market rules where keys in Germany for a growth stage company, they can raise a low percentage of their market cap.

And, and, and that just doesn’t work. If you can only raise enough capital to get through the next four or five months of, of cash burn that’s not a very attractive proposition. Whereas in the US these limitations do not exist. And so, yeah, I I’m very hopeful that policy makers will, will listen.

There has also been the drag report and, and others who have pointed out some weaknesses. And I think we need to work on those in Europe and come together to, to solve these structural disadvantages. And there will be even more important today than it maybe has been a couple of months ago even.

Philip Hemme: Yeah, it’s a good good way to finish on, on a note of optimism on, on the, on the train industry. 

[00:59:17] Quickfire

Philip Hemme: I think we could talk way more about the industry, but I want to finish, and I’m seeing the time or so finish with a, was a quick fire, which just quick questions. Your answer was like a one. One sentence one sentence answer, one advice to young life science professionals who want to go into venture, 

Christoph Broja: be intellectually curious and follow the data.

What’s on top of your mind at the moment, preparing the strategy meeting for next week? Sorry, I didn’t have anything more exciting to say. 

Philip Hemme: What’s your favorite biotech book?

Christoph Broja: It’s the biography of, Henry Teir, founder of Genzyme, hugely inspirational book, which I also, sent to some of the portfolio company CEOs. ’cause it’s extremely inspirational. 

Philip Hemme: I read it already twice and I love this work. One, one mistake you made in the past 12 months? 

Christoph Broja: I didn’t say no often enough and now I have a lot of work on my desk that I have to deliver on

Fu 

Philip Hemme: Last one one new habit you adopted recently. 

Christoph Broja: Say that again, sorry. 

Philip Hemme: When, when new habit you recently adopted, 

Christoph Broja: Take time to give feedback. Maybe that’s comes with the partner role. 

Philip Hemme: You need it? Yes. Great. Great. Thanks a lot. Amazing conversation. Yeah, 

Christoph Broja: thank you. No, I really appreciated it. And, hope we can do this again. 

Philip Hemme: I’m impressed by Christophe Path, especially without a degree in life sciences. I’m also impressed by the clarity of his investment thesis and his low ego attitude.

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