LucidQuest Strategic Insights (lqventures.com) >>> Gene&Cell Therapy >> Sofinnova’s Maha Katabi on recent M&A and IPO
success and how deal flow has ‘never been any better’: Maha Katabi has had a great three months. The Sofinnova general partner has been in the boardroom of two recent M&A exits: radiopharmaceuticals maker RayzeBio, sold to Bristol Myers Squibb, and asthma startup Aiolos Bio, to GSK.
Katabi, who joined Sofinnova in 2019 after roles at Oxalis Capital and Sectoral Asset Management, is one of the leaders of the third-most active investor in private biotech financings last year, per a January report from investment bank William Blair. Sofinnova also recently led a $170 million Series D for BioAge to run mid-stage obesity trials.
Endpoints News spoke with Katabi about the funding landscape for drug developers, M&A appetite in the current financing environment and more.
The following interview has been edited for length and clarity.
Kyle LaHucik: Start with your general reflections on 2023.
Maha Katabi: A lot of private companies that were in the clinic that would have gone public in prior years were now willing to consider private financings — either to strengthen their syndicates so they’d be in a better position when public markets were ready again or simply a larger availability of clinical-stage assets. [Now,] valuations are a lot more rational. Clinical-stage is valued higher than preclinical, which wasn’t the case in previous years.
LaHucik: You mentioned more companies forming around clinical-stage assets. Do you see this becoming mainstream?
Katabi: There’s a lot more of that for a couple of reasons. [Pharma’s] pipeline prioritization exercises are ongoing in addition to everything that’s available from Chinese companies. We capitalized on that in building up Aiolos, but there are numerous other opportunities, whether it’s in the inflammation space, metabolic, oncology. That, to us, has been a business model that we really like. We don’t shy away from taking single-asset risk.
LaHucik: Talk more about what the RayzeBio experience was like, going from an IPO in the fall to an M&A exit just a few months later.
Katabi: If you look at how RayzeBio was set up, it was to build a pipeline of radiopharmaceutical assets that was focused on actinium as a radioisotope. The management team did a terrific job in not only just building the pipeline and having essentially a differentiated value proposition with a new radioisotope compared to lutetium, but also securing manufacturing and supply of actinium and being able to do that more effectively than their competitors.
This is not a modality that too many pharma companies are experienced in. You can count them on one hand. Having the footprint that RayzeBio had created a lot of potentially interested buyers and, in the filings that were shared, there were… #lucidquest #genetherapy #celltherapy
Associate Director, Programs at ETH Zürich
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