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Yearly Archives: 2022

October 17, 2022 no comments

#Unshackled: The evolving definition of asset-centricity

Asset-centric is a term coined by Medicxi founding partner Francesco De Rubertis to describe an investment strategy he pioneered, together with Kevin Johnson and Michele Ollier, in the early years of the 21st Century.  The key was focusing investment on a single asset to avoid the problem with pipelines in early-stage biotech companies.  While it seemed superficially attractive to hedge against failure of the lead asset by having a second or a third program in the wings, the reality usually turned out differently: when the lead failed and the pivot came, far too frequently the follow-on assets didn’t pass scrutiny.  “In short, we ended up developing things we would never have chosen to invest in had they been a lead asset” De Rubertis explains.

Over the next few years, the practice of asset-centric investing was honed through various iterations all designed to counter the inherent progression bias that damages returns in pharmaceutical R&D.  Biology is unavoidably complex and always provides a plausible explanation for any failure, allowing managers with a natural aversion to crystalising losses to keep trying.  Maybe it was the wrong patient population?  The wrong dose? Not long enough treatment?  The wrong end-point?  Of course, Occam’s razor suggests the simplest explanation is likely to be right: the drug just doesn’t work well enough – but many millions are often burnt before the inevitable conclusion is reached.

One of the principal causes of progression bias is the creation of infrastructure – if you have a team of employees, a lease on a building and so forth it can be painful to call a halt even if the enthusiasm is draining away.  As long as there is a plausible route forward, and there nearly always is, then further investment become almost inevitable – a phenomenon often described as “the hand in the mangle” (referencing a long-defunct apparatus comprised of two rollers used to squeeze water from clothes during laundry, which, if it caught your hand, it was almost impossible to escape from without a painful injury).

Asset-centric investment used out-sourced infrastructure to reduce the drag of progression-seeking behaviours, and over a decade delivered the ultimate asset-centric company: the zero-person biotech.  Capital was dripped in slowly, so none was “trapped” inside a company that had begun to deviate from a stellar trajectory.  Over the years, Medicxi switched the progression heuristic from “nothing has yet killed the opportunity” to “we are still excited and want to further back the opportunity”.  It sounds subtle, but the impact is enormous.

Other benefits became apparent, as much by chance as by …

September 29, 2015 no comments

Spotting Baby Unicorns

Valuing biotech assets, whether an early-stage private investment …

May 20, 2015 comments

The perils of ignoring negative data

This week, Eleven Biotherapeutics ($EBIO) announced the failure …

June 2, 2014 no comments

Cometh the saviour? Casting Valeant’s J. Michael Pearson in a new role

There has been much written about the proposed …

January 23, 2014 no comments

Even odds-on favourites can lose: lessons from the Prosensa story

With the details from the DEMAND-III study, the …

August 19, 2013 comments

Dendreon proves the risk of investing in “Silver Medal” companies

Once upon a time, getting a drug approved …

July 29, 2013 comments

An Open and Shut Case: The Madness of the IPO window

As biotech companies queue up like lemmings on …

July 16, 2013 comments

Incremental innovation lives on

In 2010, DrugBaron declared the death of incremental …

June 17, 2013 no comments

Ichorcumab: the blood of the gods?

Index Ventures have announced the completion of an …

June 11, 2013 no comments

Soriot and AstraZeneca face increasing headwinds: can the acquisitions of Omthera and Pearl boost the engine?

The acquisition of Pearl Therapeutics for up to …


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