Generally speaking, there are two types of venture capitalists: those that are thesis-driven; and those that are opportunistic. Thesis-driven investors believe that through identification of market inefficiencies or seeing trends before they happen, they can exploit those inefficiencies and decipher market developments better and faster than their peers. While on the other end of the spectrum, opportunistic investors seek the best deal at any given point in time.
I have always considered myself to be an opportunistic investor. This is partly due to the fact that the Osage University Partners model is predicated on tracking a robust pool of university start-ups and waiting for the optimal time to invest. Every so often we do attempt to execute a particular thesis, but there is always a risk that by focusing too much on the thesis of the moment we will miss out on evaluating other quality opportunities.
A major portion of the active investments in the Osage life science portfolio is oncology-focused start-ups. My colleagues and I certainly did not set out to create a portfolio of oncology assets, but in many senses, we have created the prototypical thesis-driven market index that touches on many of the in vogue oncology areas (immunotherapy, autophagy, tyrosine kinases, orphan disease, microRNA).
But, if we weren’t trying to abide by an oncology thesis, how did my colleagues and I arrive at this point? Oncology, as an area of drug development, has a number of attractive attributes:
As our Fund looks toward the future, oncology will likely continue to play a major role in our investment portfolio. That being said, it is hard to imagine that oncology products will be able to maintain premium pricing in perpetuity, meaning that newer products will have to go further in defining product differentiation and the lengthening of patients’ lives. Therefore, new products, like many of those in our portfolio, will have to push the edge of our understanding of cancer and drive drug development into whitespace – an area that pharmaceutical companies have historically rewarded investors.