Biotech is ‘the superhero of the pandemic’: investor

Antoine Papiernik, managing partner at Sofinnova Partners, joins Yahoo Finance to discuss trends in biotech and impacts the pandemic had on scientific discoveries.

Video Transcript

JULIE HYMAN: The coronavirus pandemic, in addition to all of the activity we have seen around vaccine and treatment development has also meant a lot of interest on the part of investors in biotech and health sciences. It has also meant a very busy year last year for Sofinnova Partners, which is a Paris-based life sciences venture capital firm. It's one of the oldest and largest in Europe. And Antoine Papiernik, who is the managing partner, is joining us now. Antoine, thank you for being here. So as you look over the past year, what, to you, has been sort of catalyzed by the pandemic in terms of, for your businesses, the developments that you've seen?

ANTOINE PAPIERNIK: Well, I think the common man and woman in the street knows why because healthcare became so important to everyone around the world with no exception. So I think that did not change the risk of biotech or the fact that this is a process to bring a product from early development to the market. But it changed people's opinion and people's appreciation of the importance of that sector. So, biotech is now and always the superhero of the pandemic. Therefore, investors, small and large, are incredibly interested.

BRIAN SOZZI: Where specifically are you seeing opportunities in the space, Antoine?

ANTOINE PAPIERNIK: Well, beside the pandemic and the vaccine, you know, there is so many diseases that still need medication that, in fact, the world is totally open from oncology to, of course, degenerative, neurodegenerative diseases, Parkinson's, Alzheimer's, orphan disease, or diseases in children that are untreated today. There is-- you know, people die, and they would rather not. This is what I preach every day. This is important, and therefore, there are opportunities across the spectrum of human biology. Europe is a bit special because it is an untapped market in many sense, compared to the US.

And that's what we concentrate on, is finding those technologies in Europe and bring them to the world scale. Just one example, if you think about it, everyone knows Moderna. Everyone knows BioNTech, an American company, a European company. I think that shows you that the opportunity is here on both sides of the Atlantic. And it's for us to uncover, unveil those new companies that will ultimately bring new drugs to patients.

MYLES UDLAND: Antoine, I wanted to ask a little bit more about the core breakthrough there, which is the mRNA platform that these businesses are working off of. And I'm curious if your portfolio companies or folks you're talking to are excited about working further with that technology or if it has, you know, opened more eyes to, hey, we think this is a moonshot that we've been working on. And now, you know, science has shown it may be viable. It may indeed work, and people are maybe redoubling their efforts on other kinds of ideas.

ANTOINE PAPIERNIK: Absolutely. You're absolutely right. RNA is right now the focus because it became so important for the resolution of this pandemic. But RNA is, you know-- has been developed over the last 20 years, 20 to 30 years. And now it's coming to fruition so that you will see a lot more opportunities and companies that are developing RNA-based drugs to treat patients. We have, in our portfolio, companies that are specialists of RNA.

In fact, in general, what we call new modalities, which is new ways to treat patients, so RNA is one. Gene therapy, cell therapy is particularly well developed in Europe. So you have leaders like the BioNTech that we just talked about in Europe that have technology platforms, products that are able to address new diseases using those technologies like RNA. So it's not a fluke. It's not just a one-off. It's really a whole trend. If you compare with, for instance, antibodies, which also took a long time, decades to get to a point where they became a drug that we can safely administer to patients, RNA is just another platform that is now coming to maturity.

JULIE HYMAN: And Antoine, from an investment perspective for normal investors, those who are not steeped in this, because there is this big increase in interest, what do you think investors have to know? And is there-- is it difficult, do you think, to find real expertise on these issues? Is there sort of a gap between interest and expertise?

ANTOINE PAPIERNIK: Yes, and that, of course, this gap that we are trying to arbitrage now for 50 years at Sofinnova, it is difficult. You need to understand the science. You need to understand the development of the science into a product. So this is not for the faint of heart. Now, for drugs that are nearing the public markets, also nearing the market, this is more understandable for the common investor, I would say, the one who does not necessarily have the scientific skill set.

And here, you know, the size of the markets are such that the issue is never the market. If you solve cancer, you're going to have a market. It's really about, can you address your probability of success to get your drug to market? So, drugs are down now where we go in phase three, which is the last phase before approval. Those are drugs that, by definition, have a high probability of success that will, more likely than not, be approved.

So there's a-- for those who want to select investments in biotech, I think outside of close to big pharma or the big biotech, which already are stable, mature companies, which is one safer bet, I would say, the younger companies are the ones that have products that are nearer the registration where they're going to get those products to the market. And there are hundreds of those that will be the next Moderna and the next BioNTech of tomorrow that will be worth tens of billions at some point if they are successful.

JULIE HYMAN: The tricky part is figuring out which of those they are. Antoine, thank you so much for being here. Hope to catch up with you again. Antoine Papiernik is managing partner of Sofinnova Partners. Appreciate it.