Investment Thesis
Why Now?
Our View On Today's Life-Science Landscape
As a backdrop to what we believe is a compelling investment thesis, there are some important trends playing out in the world, technologically and more specifically within the life-sciences universe.
First amongst them is the pace of technology innovation. We can already take it for granted that everyone is acutely aware of how rapidly technological innovation is occurring, broadly. This trend has over the past 5-10 years begun to significantly benefit life-science innovation.
The accelerating simultaneous advancement of these various technological elements applied to biological and medical science has led to the emergence of an entirely new paradigm in the realm of life-science innovation. This new paradigm is:
Bioconvergence.
Bioconvergence is the new frontier resultant of the convergence of technologies from the mathematical, biological, physical and computational sciences creating a sum far greater than its parts.
This field is now developing some of the most exciting and innovative inventions and breakthroughs in human history. And in keeping with Moore’s law, the advances in machine learning and AI, and the evolution of quantum computing, this new frontier is poised to rapidly redefine the future as we know it, from a medical health perspective.
Factor Investing
A MeOhr Ventures Key Differentiator
Similar to equity market investment “factors” such as momentum, volatility, quality, etc. – MeOhr will pursue investments in accordance with its own factor-based approach and view on the emerging trends within life-sciences.
We believe these factors will drive outsized impact on a global basis and set the fund up for outsized returns as well, over the long term.
While these “factors” serve as the verticals within which we will seek opportunities to deploy capital, within these verticals we’ll focus on medical device, digital health, therapeutics and pharmaceuticals.
We think that this factor-based approach, diversified across life-cycle stage and sub-sector, produces an attractive portfolio performance profile.
A Pioneering Approach
MeOhr Ventures First Of It's Kind Hybrid
In contemplating the funds approach to investing, MeOhr sought to craft something truly unique.
The team had equally important but somewhat competing goals:
Maximize potential for investor returns
Minimize risk through diversification
Extract operation leverage without “mission creep” or “style drift”.
Over time and through vigorous debate, an idea was formed.
MeOhr would pursue a structure maximizing delivery against all three objectives. MeOhr Ventures own “efficient frontier”. This structure would ensure diversification across sub-sectors but also across life-cycle stage and maturity in the underlying portfolio companies.
Simultaneously, MeOhr would enable capture of the potentially outsized returns inherent in the earliest stage investing opportunities available through long-standing relationships with academia and technology transfer offices.
Finally, MeOhr would extract as much operational leverage and value from the partnerships it formed and the experience of the leadership team as it relates to their own impressive track records for successful exits in companies they had personally founded in the past.
A hybrid, synthesized approach that introduces critical diversification across size, stage and lifecycle, as well as home-grown and incubation opportunities – maximizing potential returns, prudently managing risk, and staying disciplined on competence and investment style.
MeOhr Ventures is forming the fund to maximize value capture in these compelling investment opportunities occurring at the intersection of the three significant trends outlined:
The rapid acceleration of early- stage life science company formation and growth resultant of the increased capability accessible to such companies at a fraction of the costs a decade ago
The growing global market for new and innovative healthcare solutions and services
The world-class ecosystem of life sciences innovation present in Israel, the EU and UAE.
The healthcare sector itself continues its global secular growth trajectory, driven by scientific and medical innovation and demographic trends combined with a growing global middle class.
These trends have led to a significant appreciation in global healthcare spending, led by the U.S.A., which now spends approximately 18% of its GDP on healthcare. The healthcare industry’s impressive growth story combined with its unique natural complexity create myriad investment opportunities. At every stage of the discovery, development and administration of healthcare goods and services there are potentially attractive investment opportunities for MeOhr to invest.
Israel as a target geography for investment is incredibly well positioned to deliver innovative new healthcare products to the global marketplace due to its high level of R&D concentration, well educated workforce, strong intellectual property formation, and entrepreneurial ecosystem – all as evidenced by the fact that during the past 20 years the Israeli life sciences industry has produced over $19 billion of M&A and IPO realizations. Israel has demonstrated success across biopharmaceuticals, medical devices, diagnostics, and digital health. Examples are myriad; Israeli scientists played pivotal roles in the development of numerous blockbuster drugs, such as Teva’s Copaxone, Lilly’s Erbitux, and Serono’s Rebif.
The investment opportunity set in Israel is broad, with over 1,500 life sciences companies today and a vibrant start-up landscape that launches an average of 70 healthcare companies per year.
MeOhr’s team has established a successful track record of identifying and investing in healthcare companies by virtue of its access to significant and proprietary deal flow, and by proactively seeking out investment opportunities. To manage risk and optimize for outsized returns, the Fund will pursue a diversified investment strategy across all stages and sectors of healthcare. This strategy will be uniquely implemented by deploying the investment capital in 3 ways.
First, by leveraging the core-competency of Israel’s leading life science incubation labs in an investment partnership. This investment partnership will introduce significant operational leverage to the MeOhr effort within the earliest stages of portfolio company lifecycle.
Second, MeOhr will commission the formation of new companies based on its own view of market need and opportunity. This part of the strategy will represent up to 10% of the fund’s capital commitments.
Finally, MeOhr will invest the balance of the fund’s capital (~90%) directly into established companies it identifies based on rigid internally develop criteria which align well for successful commercialization of underlying products or services and exit valuation which will meaningfully contribute to fund return objectives.