Gaule: Give a brief description your parent organisation and your venture.
Martin: Takeda is Japan’s largest ethical pharmaceutical business, founded in 1781. The Takeda venture function was formed in November 2001 as Takeda Research Investment, a purely strategic venture group with a $100m commitment by Takeda to invest in early-stage bioventures offering the potential to enhance and expand Takeda therapeutic discovery capabilities. As the first footprint of Takeda’s research operations outside Japan, it was also viewed as an important conduit for strategic intelligence to help ensure competitive positioning of discovery efforts.
In November last year the venture unit changed its name to Takeda Ventures, reflecting internal organisational realignment from an operating to a corporate function, enabling expansion of the investment remit to include new business horizons, and streamlining investment decision-making. Takeda Ventures invests up to $5m per financing, is flexible with investment structures consistent with its strategic mandate, takes board observer rights but not board seats, and is proactive in developing relationships between operating functions inside Takeda and portfolio companies. To date $47.5m has been invested in 16 companies and a limited partnership with Pappas Ventures.
Gaule: Give us an overview of the team and your partners.
Martin: The team is just three individuals, each with either a pharmaceutical research and development (R&D) or business development background and significant experience in the pharma or biotech industries. We are supported by a highly competent assistant. The venture business is all about relationships, and while we are always building and nurturing our external networks, it is equally important to build strong internal relationships with colleagues who ensure we are continually informed on Takeda’s strategic R&D imperatives. We aim to be proactive more than reactive in sourcing new opportunities for investment, and in this way operate against an investment plan for which there is already a certain amount of internal buy-in. With regard to external relationships, we maintain a tight firewall between ourselves and the rest of the Takeda organisation, conducting all scientific and technical due diligence exclusively within Takeda Ventures using thirdparty experts. Only when we are comfortable there is no risk of mutual intellectual property contamination, and the interest to invest remains high, do we move to the next step which may involve Takeda researchers in confirmatory due diligence.
Gaule: Give us some insight to an interesting recent deal.
Martin: Takeda formed a partnership with Envoy Therapeutics about 18 months ago. Using our research sites in the UK, Singapore and Japan, this collaboration offers the potential for Takeda to develop entirely new classes of therapeutics to treat schizophrenia. This approach to collaboration is a new and developing management approach to pharmaceutical research that leverages internal and external capabilities of the firm.
Gaule: What is your view of the current market conditions for starting a new venture?
Martin: It is much tougher now than it was just three years ago to raise money, meaning business plans and their advocates have to be absolutely realistic in terms of what can be achieved, in what time and at what cost.
We are not seeing any slowdown in the emergence of new, exciting opportunities, but it is clear those that make it are the ones that recognise the constraints of the current investment climate.
Our advice to entrepreneurs is to think first about the most likely end game, identify the criteria that maximise the probability of that end game, and create a strategic and financial plan that most efficiently gets you there. Cutting corners to save money and having a distorted view of asset value are probably the biggest issues we see.