The Secrets to 50 Years of Success in Life Sciences Investment

March 14, 2022 - 7 minutes

The European life sciences venture capital firm Sofinnova Partners is celebrating its 50th birthday this year. Sofinnova’s Chairman and Managing Partner, Antoine Papiernik, outlines key lessons the company has learned in its long history in the biotech industry. 

Meet a couple who have been married for 50 years and most of us, I imagine, would wonder: “What’s their secret?” Such constancy over so many years of ups and downs grants the pair an aura of wisdom that draws younger couples’ attention. 

The relationship between early-stage investors and life science entrepreneurs is a deep and complex dance in its own right. When there’s a healthy balance of loyalty, honesty, excitement, and respect, the union not only benefits the pair but can lead to breakthrough discoveries that make the world a better place. 

This year, Sofinnova Partners will reach a milestone of its own: a half-century in this industry, highlighting our status as the longest-operating life science VC firm in Europe. Reflecting on this 50-year adventure, we can observe some key ingredients that have contributed to our longevity. 

Marry the person, not the idea

By design, our partnerships with entrepreneurs have an end date, but it’s a happy milestone. It’s like a marriage with a pre-programmed divorce — and sometimes, we end up getting married a second time, and a third time to the same person. 

Maybe that sounds like the plot of a bad reality show, but it describes part of the business model in the VC world that tends to work well for all parties involved. For Sofinnova Partners, this arrangement has led to many years of happiness. The key to doing it right is to go into a relationship with a person or team feeling comfortable that you are committed for the long haul. This way, your continued love does not depend on the amount of the ‘divorce settlement’ and you’re willing to get married to them again even after situations where it hasn’t worked out.

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That was the case with one of our investments in a startup that had a promising device, though circumstances did not align for us to have a profitable venture. The core competencies and values of the entrepreneur were so attractive that we ended up collaborating again later with prosperous results.   

Values are worth more than diamonds

In my 25 years at Sofinnova Partners, I can report that not much has changed. Let me clarify. What really matters — our values — have remained constant and strong. Decades of intrinsic pressure and especially the recent tectonic shifts in the life sciences field have only strengthened our shared principles. 

Let’s face it — the world of life science is evolving at a staggering pace. Biology and technology are colliding, and with each step forward, we need to adapt to the new environment while holding on to the tenets that unite us. This is what will enable us to keep our footing in this ever-changing world. 

The world of financing innovation is also changing rapidly. European venture capital is in its prime and we have an opportunity to do more to enable our startups to have access to capital. The pace of change over the next few years is going to accelerate significantly and we will need to harness this transformation to benefit the entire ecosystem and our collective future. 

For a firm to successfully navigate the seas of time, a sense of stability is needed, but this cannot come at the expense of evolution. Diversity and inclusion are among the core values that can prevent stability from turning into stagnation. 

Learn from the next generation

Generationally, we must support changing for the better, like grandparents and parents nurturing the core values they have transmitted, while learning from the younger set at the same time.   

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Our youngest team members are as much a part of determining the future of the company as we are. Their fresh ideas need to be heard and looked at as another facet of Sofinnova’s collectively created DNA. 

Treat others the way you’d want to be treated

Another principle that must be kept top-of-mind is that we are not simply dealing with money. We are dealing with people. It sounds trite, but treating people the way you want to be treated can be the difference between a successful venture and one that ends in tears. And it goes both ways.

People often forget that we are also pitching to our own investors, limited partners who invest in VC funds like ours. I recall one instance when I was trying to convince an investor to make a large commitment to one of our funds. The investor did not seem to care about some of the things that we value most – the importance of respect and a strong code of ethics in how we deal with others. “It’s just business,” he said. I shut my laptop and walked out. 

No amount of money can make it worth compromising our values and integrity. They say that freedom stops when you’re encroaching on someone else’s fundamental rights. It is important for me to partner with individuals, entrepreneurs, and investors alike, who are able to protect those boundaries and understand that what we do goes beyond just the bottom line. 

Supporting the development of treatments that can save lives or technology that can ensure a sustainable future is what has kept the fire under my feet fanned, and I look for the same motivation in all our partners.

The importance of being passion-driven

Want to know the secret to an entrepreneurial relationship that thrives instead of merely surviving? It’s more than blindly following the data. The numbers tell one story — a critical one. But the true test involves qualities one may not intrinsically associate with our line of work: empathy and passion. And a little bit of audacity. Discovering the deeper story behind an entrepreneur, truly listening to their vision, and understanding their reasons for attempting to do something innovative with little guarantee of success, knowing that so many hurdles await —  none of this can be found in a spreadsheet. 

As with any long-term relationship, there have been challenging moments in our partnerships with our entrepreneurs. Often, the cause has not been a lack of understanding of the data, but a lack of empathy. Without this critical tool, you cannot be a good venture investor. I feel strongly about that. The people I look up to and admire most in this business are very connected to the essence of what we do. Funding life science startups is ultimately an act of faith and belief. 

We are betting on the future, which is an amorphous construct at best. With science at an early stage, there is a lot of uncertainty and risk. My instinct has been to continuously gut check an opportunity by asking: “What if they’re right? Is this something massive that will change society for the better?” 

I’m a generalist, so my knowledge is more of a wide net rather than a laser beam. That is why I look to the people around me, those who are much smarter than me in specific areas, to come up with new and exciting points of view. 

Consensus, collaboration, compassion: these are the ingredients that have led to decades of growth, progress, and reinvention at our firm for the past 50 years.

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