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Josh Makower 00:05
Scott. How about a round of applause for Scott and the amazing LSI team? Thank you. Seriously, thank you for what you are doing for our industry and for the patients that we serve in this industry. It's an amazing service to get this type of energy and this talent altogether. It's really impressive, and I'm really looking forward to the agenda this week. So I also want to just start off. So Antoine and I, we're really honored to kick this off. We have a goal, which is to excite you and inspire you for what these next few days could be for your company or your firm. But I want to start off by acknowledging probably one of the largest exits in med tech, which you were an early investor in, which was Shockwave, and Todd Brinton, I know, is right over here. Congratulations, Antoine, that's all of our goal. So I think we should give you a round of applause for being an early investor and seeing that opportunity. Yeah.
Antoine Papiernik 01:09
Thank you. Thank you. And then I'll tell you that I invested for the wrong reason. No, but all the right ones, which you know, Todd, of course, is intimately part of that. No.
Josh Makower 01:20
I think what people want to hear is because there are many investors here, and there are also a lot of companies looking for investment here. What is the magic? Because I just spent, I was very fortunate to spend the last couple of days with several of the Sofinnova Partners CEOs, and I really enjoyed that experience. I really saw a pattern, and I think it would be cool for you to share. You know, what is the magic? What forms the basis of your investment decisions? Well, I...
Antoine Papiernik 01:55
I think, you know, Scott said it, and I know it sounds cheesy, but companies just go through ups and downs, and technology goes through ups and downs, but the people are really at the heart of it. And there are so many examples of things where we invested, I say jokingly, we invested for the wrong reasons, but truly, if you saw my investment thesis document for Shockwave, there is a lot of truth in that. A lot of things that I got right there, and so many things that I got wrong. Some of the things that I was the most excited about actually never panned out or haven't panned out yet. But the theme really is, you know, the people that we met, and the first guy that I met is actually Todd here, and you know that connection between technology, an opportunity, sort of total addressable market, as in venture terms. But the people who are doing it and how convincing those people are is the key. I believe you share that intimately. In fact...
Josh Makower 02:55
I absolutely do. And I want to say also tomorrow morning, I'll be interviewing Todd, and we'll be walking through his amazing background, from before college all the way through to the current day. I think it's a very inspirational story, so I'll just put a little plug in for that at nine o'clock tomorrow morning. But a special guy, the person that Paul Yock and I chose to carry the fellowship forward, and then led the fellowship for so many years. And so people are everything, you know.
Antoine Papiernik 03:29
You know about people, because to prepare for this panel, the only preparation I've made is to dress like Josh. I don't know if you noticed. I thought he would be in black, but no, not even.
Josh Makower 03:39
He's dressed like this one because I put a different color shirt on. So, you know. So keep him guessing, you know.
Antoine Papiernik 03:45
So that's the only prep I've done, but I tried, actually called a few people and said, "Come on, give me some dirt on the guy. I need something." Todd, you're smiling. I asked you specifically, please send me some information that I don't know that nobody knows. And nada. I don't know how much you paid him, but nothing I got zero out of him. So I don't know. Either you are squeaky clean, or these guys are really, you know, they're true friends. Well, as...
Josh Makower 04:14
He'll tell you tomorrow morning. You know, they used to have a picture of me and throw darts at it when I was the fellowship director, and Todd was, you know, going through his fellowship. So, you know, there's that. So I think the other thing about the Shockwave story that I think is very relevant for this group as well is the evolution and the story along the way, all the way from the very beginning. What was the valuation when you invested?
Antoine Papiernik 04:44
I think 10 million pre, something like that, 11, I think was the number, 11 pre-down. No, I was not that bad.
Josh Makower 04:51
Was I? It was worse? Was it? Well, I...
Antoine Papiernik 04:54
I was the only guy ready to do it. So I thought, okay, might as well. What was...
Josh Makower 04:59
What was it? Sub 10. Just sub 10, and now exiting for $13.1 billion. That's pretty incredible.
Antoine Papiernik 05:12
I got lucky.
Josh Makower 05:15
I don't think, no, I...
Antoine Papiernik 05:15
I think the most beautiful thing for me is really the path, because, and back to the people, I think Todd, you know, started this company and stayed on for a long, long time until, you know, this company was off to the right track. Of course, a huge decision that Todd participated in is also, you know, bringing on Doug Shell and a bunch of incredibly talented people to execute on the plan. So I think, you know, the people, I think you need to also understand when is it that you need to grow the team and be able to bring the appropriate skill set to the company that you know the technology, of course, proved itself. You know, I made an investment. There were seven patients, if I recall, when we saw each other, those seven early patients, you know, that showed that this was possible. But to go from there to, you know, a billion-dollar sales company required huge execution skills, and to find those is really what's difficult. Bringing the right people at the right time, I think, is the key. But...
Josh Makower 06:19
I also think the story, which we in med tech, this story is repeated a lot, which is the way to win is with patience and perseverance. I can remember when Impella went bankrupt twice, right? And then eventually became Abiomed for, I think, one of the biggest exits in the history of med tech. I think Shockwave might be right behind it. But the story there is, if you have a technology you believe in, for the entrepreneurs here who have companies, if you believe in your technology, and you have the data, you just have to stick with it. And that's the message to the investors as well. That's how real value is created in this business. It's not created overnight. Yeah.
Antoine Papiernik 07:13
Yeah, and it is a case in particular because the company went reserved, and you say reborn, or it was reborn several times. It was actually a European company, if you recall, a German-based company for a number of years until it was brought back to life in the US. So indeed, and unfortunately, it takes time when you talk to investors, or our own investors. Yeah. I mean, Shockwave took a dozen years, I think 11 or 12 years. But some of the other companies that ultimately went there took longer than that, and I think we both had examples of that. So persistence, I think, is absolutely key.
Josh Makower 07:51
Exactly. And I think the model, from my perspective, the model that works is not like other industries, where there's a markup, and then there's another markup, and there's another markup. This is really about de-risking capital over time, and as you continue to invest, even though the values don't necessarily click up that much, you're having a greater opportunity. The reason why to get in early is to have that chance to have, potentially, in the long run, the largest position in the company, but they only achieve that by following through. And of course, you've also been excellent, Antoine, attracting great partners with you, right? I mean, you've always had a great consortium of investors that will come along and join, and that's also been part of the success as far as I can...
Antoine Papiernik 08:41
I think. And if you look at this particular meeting, and I looked at the list of investors, just hey, first of all, the sheer number of people here, I think there's 800 people at this meeting today. I mean, 30 years ago, there was not a single meeting like this, or there was no ecosystem, or no community of investors, no community of entrepreneurs. Today, there are dozens and thousands of investors that are all med tech investors at this conference. It's a huge difference. And today, I think companies, it's difficult to raise money. We all know that, but companies actually raise tens of millions and hundreds of millions today thanks to the community that was built over the last 20 years.
Josh Makower 09:24
Yeah, and the thing I love about this community so much is so many of you are really here to help each other. You're here. I don't feel that I've been to, you know, in my broader roles over the years, and, you know, sort of venture and biotech and so on, and even digital health. There's something special about med tech where we recognize as a challenge, where we really stand together and we really are helping each other. Even when there are direct competitors, it's more about respect for the opportunity to create value for the patients and a recognition that there can be more than one that services a tremendously large need. I really do appreciate I see Andrew Cleland there, you know, just stepping forward, helping the next generation, being a part of that early community of backing early projects and then working together. It's not VCs competing against each other. It's about VCs collaborating together to ultimately amass the funding necessary to get these deals to tremendous value.
Antoine Papiernik 10:36
Maybe, Josh, because people know you through different parts of your life. There's the experiment, there's the Pfizer days. First of all, if I recall, that's how you started. In fact, you got this aha moment for the bio design process. But then, no experiment. You're an entrepreneur, you know, just inventing stuff. And, you know, we know you have 300 patents, and just that's one part of your life. Then, you know, there's the venture investor, and, of course, 20 years with NEA, one of the largest funds in our ecosystem. And there's also the contribution to, you know, to the ecosystem, the Stanford BioDesign, and many other things that you've done. Maybe, I mean, one of the questions is, if you look at those three lives of yours that were mingled, what are the things that you think are, you know, the things that you like the most? You know, what is it that makes you, what's the driver behind these three lives of yours? Yeah.
Josh Makower 11:39
I mean, for me, it's a funny story because I think I would participate in creating BioDesign as a way to give back to the next generation and try to help us all be more successful, try to use a methodology that made sense to me. I saw lots of money being wasted without the proper process, and that's a real shame because there isn't a lot of money to go around, and you want to focus on things that actually solve needs and are really important. That was sort of the motivation for it. But it was a side thing for me, and I always focused on, you know, creating my companies and the projects, but it wasn't until I returned to BioDesign in 2021 and had some experiences actually, you know, internationally, when I saw how it was impacting those communities and the communities that were being built around BioDesign in Israel and Japan and Ireland that I just realized, like, okay, I've actually come home. This is the right place for me to be, and this is a great contribution that I can make for patients and advancing care. It's also been an opportunity for me to expand the platform into policy and work on things that we're all struggling with and try to make it better for everybody. So it's been a real pleasure and an honor.
Antoine Papiernik 13:10
You think as an investor, because I've been an investor for 30 years, that's all I know. Okay, I'm no entrepreneur. I mean, I'm an entrepreneur in my own firm, but I'm no entrepreneur in the med tech space. I look at things in a certain way. You've got those different facets. You look at things as an entrepreneur, and I think you saw many of our Sofinnova portfolio companies last week. What is it that you think makes you look at things differently? Maybe, do you sort of put yourself in their shoes in ways that investors like me and many others in the room maybe don't do that? What do you think is maybe an edge that others would not have?
Josh Makower 13:48
I mean, I don't know if it's that special, but I know that some of us that have done these various roles, you know, I know Todd, Andrew, and others. The real opportunity that you can offer others is to be able to see around some corners, you know, and help guide CEOs or other people navigating it so that they can avoid the obvious pitfalls and also to sort of really speak the truth about, you know, what the challenges are going to be. In very much a way, when we were training folks at BioDesign, it's about appreciating the journey you're on and being ready for it. You know, it's sort of like if there's a Mount Kilimanjaro or, you know, Everest in front of you. You don't want to just be looking at base camp, you know. You sort of want to be able to look up to the top and appreciate, okay, here's where we're going to stop, and you bring the right partners, you bring the right Sherpas along with you. You bring the right amount of food, you bring the right protective clothing, and then you can scale it. If I can play some of that role, that's what gets me excited.
Antoine Papiernik 14:56
What do you think that, in fact, people, I remember, were thinking base camp was actually the top of Everest. I thought, yeah, this is what we need to go and, you know, from a European or even just a med tech investment perspective, it was all about, okay, you get the CE mark, you know, maybe have a path to the US. That's the ultimate, that's, you know, the Everest top. And then you get there, and you think, blimey, absolutely not. There's something else, and then using that sort of second level. But in fact, the goal post keeps being pushed forward or backwards over the last 30 years. Today, you know, if you think that's the top of Everest, you're going to be disappointed. Well...
Josh Makower 15:39
I remember, maybe some of you are old enough to remember this too, but Bill George, who really drove Medtronic to the growth story that it was for many, many years and thereafter. Bill George, I remember saying on stage to an audience just like this, you know, we are benefiting from all the investment that you guys are making, and you're selling your companies way too early because he was taking those great businesses and then creating multi-billion dollar franchises out of them. Obviously, we know the multiple on that, and so I think he's right. But it is an ecosystem, right? So recognizing that the venture model has, you know, sort of an arc to it, it's about handing off to the next arc, you know. So that might be the summit for a venture investor. But then it becomes an opportunity for the strategics. I know we have a lot of strategics here, and that's, I mean, people, it's funny in meetings like this, people want to say, like, hey, what's the future of med tech? Honestly, the future of med tech is right here. You guys, this team, men and women, here are the future of med tech. It's right in this room. These are the businesses that are going to be the multi-billion dollar franchises that many of the investors will benefit from, and that the strategics that buy these businesses will rely upon for their growth.
Antoine Papiernik 17:15
Yeah. I mean, you know, you say too early. I've had a number of experiences where in hindsight, you think, yeah, we sold too early. I mean, Medtronic is, you know, he's probably happy that we sold CoreValve to them when we sold it. You could project the film, what if we had stayed? What if we had found the money? But it's difficult, as I said. You know, hindsight is 20/20, of course. With Shockwave, I had the fantastic experience to see the film being played to, maybe not the end, but a certain point where, you know, since the IPO, the company had 13 million in sales, 13 million in sales. When I left the board, we had a billion in sales, roughly 900 and something. I think seeing that film, just what you're saying about Bill George is absolutely true. I know it sounds daunting for most of you CEOs of companies that, yeah, yeah, yeah, sure. You know they're just saying this, but it's impossible. In fact, it is possible when you live through it. Okay, I've lived it once in my career, but it means it's possible. We've had so many exits, which was great to return money to our investors, but this one is a monumental exit and also a sort of a bellwether for what this could be. You know, if you have the combination of the technology, the market, the people, and yes, you can actually do this, and you can find the money to get it done, the amount of money that was raised post-IPO, if you think this through, compared to what was done pre-IPO, is like talking an order of five to ten. I haven't made the calculation, but probably ten. The value creation from that point, when we had 13 billion, is 20 times what was created beforehand. But as you said, we had the chance of being there as a large investor, even at the IPO time. So, I mean, that has actually transformed the way we look at companies. And I guess we want more. You want more.
Josh Makower 19:17
Exactly, and I know we're going to get close to time here. So maybe we'll wrap up with some advice or thoughts about the future. You want me to start while you think about each other? So I'll just say, it's always all about the people. Find those people that you can build something amazing with. If you're an investor, if you are an entrepreneur, find the investor that you can partner with and see your way through. That's the opportunity that we all have here today. Build something that lasts, build something together, and a journey that is transformative, not only for your team and your company but for the patients. That's always going to be where the real goal is. That's why we're all here, is we're trying to do something good for patients, and I think at the end of the day, if we can do it together, enjoy that ride, you know, overcome the challenges that are necessarily here, then we're really going to create something that's lasting. That's why, you know, being here today and seeing the 800 people that have come to this conference is just so thrilling. When I think about the patient impact, it's just overwhelming. So I wish everybody luck with that.
Antoine Papiernik 20:48
Well, yeah, I think, you know, the people and the encounters, you know? I mean, look, we've known each other for 20 years or so, but you know, we recently have managed to work with each other. I think this is when you realize, ha, ha. There's a reason for things to happen. When you are like-minded people, when you think the same way, then you can do great things together. Just to your point, I think being able to connect with, you know, people that are actually going to make your journey interesting, fun, ideally, and ultimately rewarding, not just for yourself, your investors, the community of patients. I think, you know, I'm a paranoid optimist, so I always complain about how tough the environment is. But when I look back and I see the technologies that were funded, you know, when I look at, you know, Todd, and many of you here, entrepreneurs or past entrepreneurs of our fund, you know, I can only be just chuffed that we've been involved in this. I mean, this community did not exist today. All of you, we are connected, all of us by, you know, the same thought. So I think back to Scott and the fact that, you know, we are here today in Sintra. For those who don't know Sintra, you absolutely have to go and see this town. By the way, it's just a magnificent town. You know, things stick, the important, the beauty, the things that we have here in Europe, I think we have so much to go for. Building things from Europe or the US, or just being able to do the best of both worlds in the world of med tech, I think is a goal that we can reach. Hopefully, you know, we hope that at this conference, you will find money or find the great entrepreneurs to back that you will provide, you know, these companies the opportunity to develop their products to market.
Josh Makower 22:44
And hopefully all the strategics here find lots of things to buy, yeah, and...
Antoine Papiernik 22:49
Companies are for sale, by the way, in case you're interested.
Josh Makower 22:52
With that, we wish you a fantastic conference. Thanks for listening to us, and enjoy the evening. Thanks, everybody.
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