As Operating Partner with BroadOak, Mr. Poltilove leads the firm’s investments in Cell and Gene Therapy as well as the related sectors of Bioproduction and Cell Biology. Mr. Poltilove joined BroadOak after 12 years with Thermo Fisher Scientific where he served as Vice President and General Manager. During this time, Mr. Poltilove built the company’s cell and gene therapy business which he grew organically at 50%+ CAGR and through acquisitions, including Brammer Bio. Prior to Thermo Fisher, Mr. Poltilove served as Director of Revenue Strategy & Operations at the Corporate Executive Board and also held several commercial strategy roles with Johnson & Johnson. He holds a Bachelor’s degree in Chemical Engineering and Economics from the Massachusetts Institute of Technology as well as an MBA from the J.L. Kellogg School of Management at Northwestern University.
Tell us about Broad Oak and your role as Operating Partner.
I am an operating partner at BroadOak, which is an investment group focused on tools and services in life sciences. I joined the group in 2020, and I personally lead our investment strategy in cell biology, bioprocess and CGT space, largely looking at new investments especially focused on the CGT space. I am the resident expert in those domains.
I first got introduced to ISCT when I champed the acquisition of Brammer Bio, building out the company’s strategy for cell and gene therapy all those years ago, and this is where I really got excited and interested in the CGT space.
What is your preferred investment profile?
Broadoak historically has been focused on commercial-stage companies, so revenue-generating companies in the tool services diagnostics space. We are currently helping the firm to launch the first venture fund focused on companies just before commercial or right at commercialization, so a little earlier than we have historically invested, expanding our accessible space. Looking at companies that are up to six, nine or twelve months ahead of commercialization or series A funding.
We are a relatively smaller fund than some groups, so we are very flexible on the structure, which has allowed us to invest a little earlier in the private equity space. We do equity, we do debt, and we do some hybrid. We do much smaller check sizes in comparison to other folks who want to deploy greater sums of capital. We will often write checks for one, three, five, and ten million dollars versus some groups who don’t invest less than fifteen, twenty or fifty million dollars, for very understandable reasons – it’s a numbers game. We can target an underserviced market with smaller check sizes, which works for us.
In your opinion, what is the most important type of due diligence to perform when evaluating a new company?
As I mentioned, we are investing in commercial-stage companies, and part of the reason for that is to reduce/ mitigate some of the technology risk involved. We are not willing to take a ton of technology risk, especially in our traditional funds, so we want to make sure we have mitigated that up front in terms of company selection and due diligence.
For that reason, there are a couple of considerations that we look at. They are not all equally important, but they all do need to be there to some degree. The most important considerations being;
Any advice you would give to someone new to investing in the cell and/or gene therapy?
- We need confidence that there is a sizeable addressable market where there is a compelling customer need.
- We have to believe that the management team is credible and ready for investment.
- We have to believe that this is a space where we can provide value beyond the dollar, to make sure we can actually help the company be successful
Goodluck! In reality, I think that partnering with other groups or SMEs that know the space is critically important. Trying to navigate the space and become an expert on your own is a daunting task at best. It’s hard because not a lot of people have been in the industry for fifteen or twenty years, as it is relatively new. Walking in, eyes wide open, and taking a little more time and effort to talk to people close to the space is vital.
Another important element is to recognize that the commercial profile of companies in CGT looks different from other modalities because the clinicals tend to be a lot smaller. In this space, companies are going to ramp up a lot faster and ramp up bigger, but the early-stage startups are frankly not as attractive. They don’t look as big as what you might expect in other modalities because of those earlier-stage clinical trials. This is important to understand.
I would also look a lot at what percentage of venture dollars that are going into CGT compared to other areas. Last I checked, maybe 30% of venture dollars in pharma are going into the CGT space, so that tells you a little something about the expectation of what’s going to happen.
Another thing to consider is the percentage of value the asset provides to the product. For example, I focus on the tools and services side, and because the tools are so critical for manufacturing, they actually provide more value than what you would expect for traditional biologics and certainly small molecules because of the criticality in the manufacturing.
Is freedom to operate (FTO) something you consider an investment criteria?
Of course. You have to look at intellectual property (IP), any investor is going to look at IP. FTO is a big concern depending on the area. CGT is broad because it’s a modality it’s not one specific area, but in specific areas in the CGT space that’s critical – gene editing is a perfect example of an area where FTO is going to be hugely important.
As an investor, what themes or areas are you interested in right now?
I like anything associated with ISCT, of course!
In terms of foundational technologies, there are going to be different opinions, but personally, iPSC technologies are an area I’m looking at a lot right now, and I am very bullish about it. In a similar vein, gene editing technology. Closed processing and then IT connectivity between these technologies are other focus areas. Finally, I would say non-viral cell engineering is an area that I see as having huge potential, which is very much correlated with the gene-editing space.
What was your experience as an investor attending ISCT 2022 San Francisco?
For me, what makes ISCT meetings great is the people who attend them. I have been to a number of ISCT meetings in the last several years, and it has always been a positive experience. ISCT attracts a strong balance of scientific, industry and academic professionals and truly creates an international community that other organizations in the space simply do not get. In relation to other meetings, I have been to, ISCT is by far the best.