Perspectives on investing in the life sciences
A fireside chat with Stephan Huber and Markus Wanko
Markus: Stephan, you joined us as a venture partner in xista’s Life Science team earlier this year, it’s great to have you and also to have this chat with you. To get us started, let us open the aperture for a moment. I always like to remind folks of how young modern biology as a scientific discipline is. In quantum physics, the core principles were elucidated at the beginning of the last century. Similarly groundbreaking discoveries allowing us to understand the secrets of life happened more than half a century later. It’s just 20 years ago that the human genome project sequenced an entire human genome for the first time.
Stephan: Exactly, and this is reflected in the development of the portfolio of pharmaceutical interventions, which for a long time have been restricted to a limited number of druggable target classes. During recent years we all witnessed a fascinating expansion of modalities: cell and gene therapies, mRNA vaccines, synthetic biology, ADCs (antibody drug conjugates), proximity induced degradation, personalized approaches, and the opening up of entire new target classes, such as solute carriers as a result of deeper understanding of the underlying biology and discovery of new med chem approaches.
Markus: Conveniently, you find examples of almost any of these developments in our portfolio, Sarcura is developing a groundbreaking cell therapy delivery platform, Solgate is among a handful of global leaders targeting solute carriers, Cutanos is developing unique mRNA delivery vectors and Valanx a great ADC platform. On the synthetic biology front, Ribbon Labs is arguably the most sophisticated gene synthesis company around. And also in the Vienna ecosystem beyond xista, look at Proxygen and Georg Winter’s work at CeMM on targeted protein degradation for instance.
Stephan: This - and our team - is exactly what triggered my desire to join you guys.
Markus: The pleasure’s all ours. Let’s also not forget the new possibilities opened up by new technology development. Imaging for instance, we just saw the publication of the drosophila connectome - basically a wiring diagram of the fly brain - which is just a starting point for an exciting new era in neuroscience. Hans Danzl at ISTA in cooperation with Google’s connectomics group is a great example of pushing brain imaging techniques to another level.
"We just saw the publication of the drosophila connectome - basically a wiring diagram of the fly brain - which is just a starting point for an exciting new era in neuroscience."
Stephan: Speaking of Google - we all witnessed the Nobel going to Dennis Hassabis and John Jumper this week. AI in drug discovery already has, and will have dramatic impact on scientific discovery - but in my view, not on a standalone basis but still for a long time to come in combination with wet lab discovery, the combination of protein folding prediction and cryo-EM just as an example. Overall, we will be witnessing a dramatically changed understanding of biology at a cellular level at the intersection of AI and ever more detailed and accurate wet lab processes in the next few years.
Markus: Absolutely - on that note, let me welcome Alex Bronstein, a top notch AI researcher from the Technion to ISTA, he just started with us on 1 October. And co-incidentally, his twin brother Michael has been appointed to run Aythyra, the new Boehringer Ingelheim AI discovery institute in Vienna. Exciting prospects…
Stephan: Exactly, and let’s not forget biology and new discovery methods involving AI are only one part of the puzzle. Like in the general startup domain you need the magic triangle of idea, people and capital, it’s just that things are a bit more complex, when it comes to investing in human health.
In order to build a globally successful company, you need - in addition to a key biological discovery - a lucid understanding of the clinical state of the art, and more importantly how it is likely to evolve over the next decade. Therefore, it is great to work together with university clinics such as the MedUni Wien and other leading medical institutions. Weaving a discovery, an expected clinical need, regulatory pathways and your resources together into a comprehensive strategy is an art, that also requires a deep understanding of the early stage discovery industry, particularly when it comes to choices between in-house development, collaborating with academic institutions, outsourcing to CROs and developing and maintaining an IP edge. This comes down to people, and the team required to successfully lead a life science venture is a very special brew of top notch scientists, strategists who can navigate the pharma landscape and leaders who can bridge scientific discovery and delivery of a product or platform to a pharma partner or ultimately to the clinic.
"Weaving a discovery, an expected clinical need, regulatory pathways and your resources together into a comprehensive strategy is an art."
You are doing a great job in helping to form this team, like in our most recent investment in the MedTech company Syntropic Medical, where xista leveraged its network to connect scientific co-founders with the current CEO, CTO and Clinical Development Lead.
Markus: Kudos to Ingrid Kelly, who did that single-handedly!
Stephan: Wasn’t Syntropic also a winner of xbio?
Markus: Indeed. By the way, a great collaboration with the whole range of life science institutions in Vienna, MedUni, Uni Wien, ISTA, TU, CeMM, IMBA, Vetmed, inits, AIT and xista, the whole lot. Exactly the spirit we need to foster to provide more focused entrepreneurship training across the entire system. Next batch to start early 2025. See www.x-bio.at.
But let’s move on, let’s talk about money. Despite a gradual opening of the IPO window and generally improving M&A activity, many early stage companies are still struggling - or at least having to dedicate an unproportional share of CEO time - to fundraise. Why’s that you think?
Stephan: You’re right. While innovation in life sciences is flourishing, attracting follow-up investments remains a significant challenge, with only few companies securing interest from Pharma partners and big venture capital investors. In Austria, and Europe generally, the issue isn’t a lack of innovation or research funding; it’s the gap in later-stage venture capital that can support the high capital demands of advancing life science companies. For many Austrian and European startups research funding and early-stage support by venture capital funds and business angles are relatively accessible. However, European companies, in particular, face difficulties in attracting larger, international investors who can provide the substantial funding necessary for follow-up financing of capital-intensive later stages of development. So the deal, for instance, that you did with Curie.Bio is essential since it allows us to tap into the larger US funds and eventually also the more liquid capital markets across the pond.
Markus: Right - for us this means raising more funds ourselves and continuing to build our network of international Series A/B investors. We initially raised close to €50M and are in the process of bringing in another 50M to provide €100M plus - to give sufficient backing to the most promising life science companies out of Austria.
"We initially raised close to €50M and are in the process of bringing in another 50M to provide €100M plus - to give sufficient backing to the most promising life science companies out of Austria."
Stephan, it’s great working with you and it’s been great talking to you. Let me ask you a personal question towards the end. You’re a trained physician and I know you gained great satisfaction in working directly with patients. What made you turn towards investing?
Stephan: Well, you’re right. Having the ultimate goal in mind - a cure for a patient - has been driving me all along. And it still is - just from another perspective and with the ability to influence at least to some extent our capabilities to treat patients in the future.
Further exciting news from our ecosystem
Perspectives on investing in the life sciences
A fireside chat with Stephan Huber and Markus Wanko
Markus: Stephan, you joined us as a venture partner in xista’s Life Science team earlier this year, it’s great to have you and also to have this chat with you. To get us started, let us open the aperture for a moment. I always like to remind folks of how young modern biology as a scientific discipline is. In quantum physics, the core principles were elucidated at the beginning of the last century. Similarly groundbreaking discoveries allowing us to understand the secrets of life happened more than half a century later. It’s just 20 years ago that the human genome project sequenced an entire human genome for the first time.
Stephan: Exactly, and this is reflected in the development of the portfolio of pharmaceutical interventions, which for a long time have been restricted to a limited number of druggable target classes. During recent years we all witnessed a fascinating expansion of modalities: cell and gene therapies, mRNA vaccines, synthetic biology, ADCs (antibody drug conjugates), proximity induced degradation, personalized approaches, and the opening up of entire new target classes, such as solute carriers as a result of deeper understanding of the underlying biology and discovery of new med chem approaches.
Markus: Conveniently, you find examples of almost any of these developments in our portfolio, Sarcura is developing a groundbreaking cell therapy delivery platform, Solgate is among a handful of global leaders targeting solute carriers, Cutanos is developing unique mRNA delivery vectors and Valanx a great ADC platform. On the synthetic biology front, Ribbon Labs is arguably the most sophisticated gene synthesis company around. And also in the Vienna ecosystem beyond xista, look at Proxygen and Georg Winter’s work at CeMM on targeted protein degradation for instance.
Stephan: This - and our team - is exactly what triggered my desire to join you guys.
Markus: The pleasure’s all ours. Let’s also not forget the new possibilities opened up by new technology development. Imaging for instance, we just saw the publication of the drosophila connectome - basically a wiring diagram of the fly brain - which is just a starting point for an exciting new era in neuroscience. Hans Danzl at ISTA in cooperation with Google’s connectomics group is a great example of pushing brain imaging techniques to another level.
"We just saw the publication of the drosophila connectome - basically a wiring diagram of the fly brain - which is just a starting point for an exciting new era in neuroscience."
Stephan: Speaking of Google - we all witnessed the Nobel going to Dennis Hassabis and John Jumper this week. AI in drug discovery already has, and will have dramatic impact on scientific discovery - but in my view, not on a standalone basis but still for a long time to come in combination with wet lab discovery, the combination of protein folding prediction and cryo-EM just as an example. Overall, we will be witnessing a dramatically changed understanding of biology at a cellular level at the intersection of AI and ever more detailed and accurate wet lab processes in the next few years.
Markus: Absolutely - on that note, let me welcome Alex Bronstein, a top notch AI researcher from the Technion to ISTA, he just started with us on 1 October. And co-incidentally, his twin brother Michael has been appointed to run Aythyra, the new Boehringer Ingelheim AI discovery institute in Vienna. Exciting prospects…
Stephan: Exactly, and let’s not forget biology and new discovery methods involving AI are only one part of the puzzle. Like in the general startup domain you need the magic triangle of idea, people and capital, it’s just that things are a bit more complex, when it comes to investing in human health.
In order to build a globally successful company, you need - in addition to a key biological discovery - a lucid understanding of the clinical state of the art, and more importantly how it is likely to evolve over the next decade. Therefore, it is great to work together with university clinics such as the MedUni Wien and other leading medical institutions. Weaving a discovery, an expected clinical need, regulatory pathways and your resources together into a comprehensive strategy is an art, that also requires a deep understanding of the early stage discovery industry, particularly when it comes to choices between in-house development, collaborating with academic institutions, outsourcing to CROs and developing and maintaining an IP edge. This comes down to people, and the team required to successfully lead a life science venture is a very special brew of top notch scientists, strategists who can navigate the pharma landscape and leaders who can bridge scientific discovery and delivery of a product or platform to a pharma partner or ultimately to the clinic.
"Weaving a discovery, an expected clinical need, regulatory pathways and your resources together into a comprehensive strategy is an art."
You are doing a great job in helping to form this team, like in our most recent investment in the MedTech company Syntropic Medical, where xista leveraged its network to connect scientific co-founders with the current CEO, CTO and Clinical Development Lead.
Markus: Kudos to Ingrid Kelly, who did that single-handedly!
Stephan: Wasn’t Syntropic also a winner of xbio?
Markus: Indeed. By the way, a great collaboration with the whole range of life science institutions in Vienna, MedUni, Uni Wien, ISTA, TU, CeMM, IMBA, Vetmed, inits, AIT and xista, the whole lot. Exactly the spirit we need to foster to provide more focused entrepreneurship training across the entire system. Next batch to start early 2025. See www.x-bio.at.
But let’s move on, let’s talk about money. Despite a gradual opening of the IPO window and generally improving M&A activity, many early stage companies are still struggling - or at least having to dedicate an unproportional share of CEO time - to fundraise. Why’s that you think?
Stephan: You’re right. While innovation in life sciences is flourishing, attracting follow-up investments remains a significant challenge, with only few companies securing interest from Pharma partners and big venture capital investors. In Austria, and Europe generally, the issue isn’t a lack of innovation or research funding; it’s the gap in later-stage venture capital that can support the high capital demands of advancing life science companies. For many Austrian and European startups research funding and early-stage support by venture capital funds and business angles are relatively accessible. However, European companies, in particular, face difficulties in attracting larger, international investors who can provide the substantial funding necessary for follow-up financing of capital-intensive later stages of development. So the deal, for instance, that you did with Curie.Bio is essential since it allows us to tap into the larger US funds and eventually also the more liquid capital markets across the pond.
Markus: Right - for us this means raising more funds ourselves and continuing to build our network of international Series A/B investors. We initially raised close to €50M and are in the process of bringing in another 50M to provide €100M plus - to give sufficient backing to the most promising life science companies out of Austria.
"We initially raised close to €50M and are in the process of bringing in another 50M to provide €100M plus - to give sufficient backing to the most promising life science companies out of Austria."
Stephan, it’s great working with you and it’s been great talking to you. Let me ask you a personal question towards the end. You’re a trained physician and I know you gained great satisfaction in working directly with patients. What made you turn towards investing?
Stephan: Well, you’re right. Having the ultimate goal in mind - a cure for a patient - has been driving me all along. And it still is - just from another perspective and with the ability to influence at least to some extent our capabilities to treat patients in the future.