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Key to creating value is our approach to de-risking trials that are selected, designed and managed through a subsidiary.
Our model encourages our out-licensing partners to offer us promising assets to develop, including their back-up assets strategic to their plans and potentially quite promising. We then design trials that may improve their value, and then de-risk them with diagnostic tools and adaptive trial designs as appropriate, taking early kill decisions as soon as possible.
When interim read-outs in trials show strongly positive results, our subsidiary may choose to increase its investment in the trial, in part through debt, to strengthen its returns.
Our therapeutic emphases will be oncology, musculoskeletal diseases, and fibrosis, markets with exceptional value, high unmet medical need, and strong macro trends in health care that may strengthen the net present value (NPV) of assets developed by the firm. Our team has significant industry experience in these areas, and our supportive diagnostic technologies that help us de-risk trials are suited to the kinds of assets we will be choosing.
While other companies and funds also perform external project finance and development, our subsidiary’s focus on Phase Ib/II and its investment milestone structuring approach represent a new platform whose goal is to assure strong deal flow into the firm while attracting private investors seeking strong risk-adjusted returns compared to other, similar investments.
This combination creates a virtuous cycle that may encourage pharmaceutical partners to license promising drugs (strategic and a priority but for the partner’s limitations on R&D spend). This reduces our failure risk through reduced adverse selection and giving our co-investors — and the firm — an engine for generating high returns at less risk.