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7 October 2016 — biotechnologies

Private equity: biotech’s partner for success

Olivier Litzka, Partner at Edmond de Rothschild Investment Partners, explains how his team provides support to management so they can successfully navigate through clinical trials.

Olivier Litzka
Olivier Litzka,
Partner at
Edmond de Rothschild Investment Partners

Biotechnology and medical technology companies have a long journey to get from idea to clinical testing. The Life Sciences team of Edmond de Rothschild Investment Partners supports these companies during several critical phases from pre-clinical proof of concept, or prototype (medical devices), to the proof of concept in humans, or commercialisation (medical devices).

Over the years, the team has contributed to the development of 52 companies, of which 16 have gone public via IPO or reverse merger and 14 have been acquired through trade sales.


What is Edmond de Rothschild Investment Partners' mission with the companies in its portfolio?

Olivier Litzka: Research and innovation are at the heart of biotechnology and medical technology. However, it's essential that they always be undertaken with the goal of eventually developing and selling an effective product. The model we build with the managers of our holdings is intended to concentrate all of the company's strengths on this goal as effectively as possible.

How do you provide support?

OL: When a medical industry company is created, everything depends on the idea, innovation and research. A light organisation is sufficient at this early stage. Edmond de Rothschild Investment Partners gets involved in the next step of the company's growth, once work on a drug or medical technology enters the clinical testing phase. At this point everything becomes highly regulated. This phase requires a different type of organisation which is deeper and more structured. Our industry experience is available to the company to enable it to meet these new requirements. This phase also requires more financial resources. The funds contributed by our subscribers help the company move through this key step to then sell its drug or product. This is the goal of all the work we do and of an effective funding chain.

What is your relationship with the company's management?

OL: Investment in a biotechnology or medtech company is the fruit of an extremely intense auditing process. The management, technology, underlying products, development plan, intellectual property, long-term financing plan...all performance indicators are thoroughly researched. Management quality and experience are crucial. Edmond de Rothschild Investment Partners doesn't take the place of the management team or compensate for any skills it may be lacking. On the other hand, we are by its side to help it identify and find the financial, human and industrial resources required to successfully implement its strategy. This corporate organisation is even more crucial for medtechs which need a marketing team and a sales and distribution force to make and sell their products in different markets.

At what times do you become involved in the company's life?

OL: Our support goes well beyond the six annual Board of Director meetings and their preparation. We are present throughout the year. Our work consists primarily in discussions and exchange, sometimes on a daily basis, with all of the stakeholders. This includes management, of course, but also shareholders, independent directors and, at times, the competitive environment. Thanks to their network, shareholders can provide important feedback which will later lead to the purchase of the company by a major laboratory, ensuring continued development of the product. This ongoing listening and exchange work is intended to ensure that the interests of all parties are aligned. This is key. It also helps the company identify and respond to important issues. The goal is to provide management with the best possible conditions for success. The organisation also enables the assessment of risks and their transparent management with all stakeholders.