We interviewed Ilya Yasny, who is a luminary in the world of venture capitalism, particularly renowned for his role as a Partner at LanceBio VC, a firm dedicated to pioneering innovative therapeutics. In our interview, Ilya exuded a profound passion for leveraging scientific advancements to tackle diseases that have long confounded medical communities.
Ilya, thanks a lot for participating in our interview! To start off, can you share a bit about your personal background and what motivated you to delve into the fields of Life Science and Biotech investment?
I am biochemist by training with the background in enzymology and protein engineering. At the beginning of my career I was a researcher at Algodign, a drug design company founded by future Nobel prize winner Michael Levitt. After that, I organized a laboratory to produce recombinant proteins and to verify the predictions made by Algodign-developed software. In 2010 I transitioned to the biopharma company where I managed the tech transfer and development of drug projects. In 2013 our expert team became the scientific team of the corporate venture fund, and I’ve been heading the scientific research since then, managing scouting, assessment and due diligence of the target companies both private and public, as well as helping portfolio companies to create their development plans and select strategic priorities.
Reflecting on your career, can you share some defining moments or experiences that shaped your journey as a seasoned investor in the Pharma industry?
The first major shift was the transition from early stage, mostly academic research to the industry, which required gaining additional knowledge in the fields of drug development, medicine, clinical trials and so on. The second major transition was when we as a team began to invest not only in private, but also in public companies. Although the approach is similar to conventional venture due diligence, it requires constant monitoring of a public biotech sector and some specific skills in assessing companies.
How has your background as a researcher, especially in preclinical studies, helped with your choice of investment targets as a professional investor?
Having hands-on experience in developing drugs is an important prerequisite for a scientific expert, as it enables one to detect the weak spots in the preclinical work made by others, to ask the right questions, and in general to speak with the researchers in their language.
Within the vast field of Biotech, do you have specific areas or technologies that you find particularly fascinating or promising?
For the last several years we’ve been especially concentrated on the field of advanced therapies. This doesn’t mean that other modalities are neglected – we see a lot of opportunities in more conventional approaches, involving small molecules and biologics.
Please, tell us more about LanceBio VC. Could you explain the philosophy behind the firm and how it sets you apart from other venture capital firms?
We focus exclusively on novel therapies in the fields of high unmet medical need. We rely on the depth of our scientific expertise and on our vast experience in analyzing projects to select those with higher probability of success. We usually prefer to invest in platform companies rather than in single-asset ones. Due to our broad network of top-tier VC partners, we have access to the best opportunities in the field with the potential of exit on a horizon of 2-4 years.
How do you assess the potential of a biotech startup? Are there specific criteria or qualities you look for in companies before investing?
Three main pillars of our assessment are the technology, the team, and the unmet need. Those are the most critical ones, but we analyze all the aspects of the development, such as regulatory, patents, manufacturing, commercial, etc.
What trends or advancements in the biotech industry are you most excited about currently?
The ability to manipulate single cells and single genes with unprecedented precision opened up the opportunity to treat previously untreatable diseases. For instance, application of CAR-T to autoimmune diseases, if successful, could change the entire field and lead to curing many of them.
Could you share a success story from your portfolio that highlights LanceBio’s investment strategy and impact?
Paradoxically, our most successful historic investment from the corporate VC fund is not a drug, but a device by Transmedics company. It is a device for transportation of organs for transplant, which increases the utilization of organs and makes previously inaccessible organs accessible to patients. On a public side, Dicerna therapeutics was acquired by Novo Nordisk, and its drug nedosiran was recently approved by the FDA, aimed at treatment of rare genetic disease primary hyperoxaluria.
What challenges do you foresee in the biotech sector in the coming years, and how is LanceBio preparing to navigate these challenges?
The major challenge is the negative perception of pharmaceutical industry in the society, which leads to decision aimed at reduce the price of innovative drugs. This impedes the investments in the biopharmaceutical sector and damages the innovation. Global economical and political threats are also a headwind for the industry.
Collaboration seems crucial in the biotech industry. How does LanceBio foster partnerships and collaborations among its portfolio companies?
We are actively involved in the activity of our portfolio companies, and with our networking capacities, good reputation, and relatively long track record in the industry we are always happy to facilitate collaborations and invent new ways for the companies to move along the way.
As a partner, what role do you play in guiding the growth and development of the companies LanceBio invests in?
The most valuable aspect of my expertise might be the broad view of the sector in general, ability to quickly analyze the competitive environment not only currently, but in the future, when the company’s drug hits the market. We also leverage our broad network of clinical KOLs in those areas where the additional expertise is needed. This helps to efficiently create target product profiles for new products, build development programs, and thus to help make strategic decisions.
How do you foresee the influence of ChatGPT and other AI startups, as well as the penetration of Big Tech companies on the Pharma market in the upcoming decade?
AI is a valuable tool helping already in many aspects of drug development, but so far it has yet to demonstrate its ability to accelerate drug development or to make it less risky. In it current state it may increase a probability of success, but not by 50% as many hope, rather by 5-10%. Big Tech companies may bring additional capabilities in our industry, but again, this would not transform it entirely.
As a conclusion, what advice would you give to emerging biotech startups seeking investment, and conversely, what guidance would you offer to new investors entering the biotech space for the first time?
Any biotech startup should begin with the goal in mind, and that goal should be to significantly improve or extend the lives of patients. Everything else should be subordinated to this goal. New investors should follow the best practices in the field and should learn a lot to pay attention to multiple aspects of the due diligence. Both startups and investors must put scientific honesty and business integrity in the first place. The reputation is everything and one must be very cautious not to ruin it.