RMI’s Gopka Seeks Revolutionary Science, Industry Relationships

17 January 2014

By Jennifer Boggs, Managing Editor

Making the move from investment banking to the world of venture capital at first sounded as though it would yield more free time and a more relaxing occupation; instead, as a managing partner at RMI Partners, Anton Gopka has found himself busier than ever, perhaps never more so than during this year’s J. P. Morgan Healthcare Conference.

Gopka—who has led a number of deals since coming on board venture fund RusnanoMedInvest (RMI), managed by RMI Partners and backed by Russian government-supported Rusnano, sits on the boards of half a dozen companies and is on the lookout for new investment opportunities—arrived in Union Square with an itinerary of back-to-back meetings. And on Tuesday, he allowed BioWorld to tag along.

7 a.m. I met Gopka in the lobby of the Omni Hotel on California Street. Over a quick breakfast, he gave me an overview of his schedule for the day, which included meetings and a panel at the Biotech Showcase conference—one of the conferences running concurrently with J. P. Morgan. The day before, most of his meetings had been scheduled at RMI’s hotel suite but today, he warned me, we were in for a trek to meet with companies and colleagues interested in gaining some of Gopka’s expertise—and perhaps RMI’s funding.

Established in March 2012, RMI emerged as a specialized life sciences venture fund from Rusnano, a corporation aimed at promoting the nanotechnology industry in Russia. Rusnano is headed by renowned Russian politician Anatoly Chubais, who gained prominence in the 1990s for his efforts to privatize the country’s economy.

Chubais also chairs the board at RMI, which manages about a $500 million fund via a creative partnership with U.S venture firm Domain Associates. Together, the two have participated in nine investments in the U.S. in the last year and a half, but the larger view is global, Gopka said, with aims to bring innovative technologies and therapies to emerging growth markets.

There’s a clear Russian focus, too, to bolster the local VC community and establish manufacturing facilities in Russia for production of next-generation therapies.

Gopka explained that the firm looked particularly for companies working in the cardiovascular, central nervous system, pain, antiviral, anti-infection, women’s health and pediatric markets. “We’re currently expanding in those areas,” he said.

RMI also has the “luxury” of looking for “revolutionary science, since we are mandated to bring the latest technology into our part of the world,” he added. “So we’re more aggressive” with the majority of the fund, though a small portion is reserved for lower-risk opportunities such as medical devices for balancing.

Still, Gopka is willing to meet with companies, even if they don’t immediately seem to fit RMI’s mold. “Always give them a chance,” he said. “You have to be very much open all the time.”

8 a.m. We arrive for a breakfast meeting with a company—Gopka called it an introductory meeting, though he has previously worked with this executive before. They chatted a bit about their history before the exec launched into his pitch: A nephrology-focused firm with a late-stage product is looking to lock down funds for the Phase III program. The company is considering conducting an initial public offering (IPO), but is seeking other funding sources in case an IPO doesn’t raise sufficient funds or the now-red-hot IPO market cools before the firm is able to price.

“It’s easier to talk to people when you have cash in the bank,” he noted.

The exec’s pitch was concise—he outlined the unmet medical need, the patient population, midstage data and told Gopka how much money would be needed to fund the Phase III trials. Gopka listened, asked a few clarifying questions, and the two agreed to meet again briefly the following day with a broader group.

“Very strong,” Gopka said of the pitch as we were leaving the restaurant.

9 a.m. Our next stop was a strategy meeting with RMI’s partners at Domain at a hotel several streets away. We were running a bit late, so we hopped a cab to take us the last several blocks and arrived only a couple of minutes after nine.

The partners offered a few introductory remarks, with a brief recap of 2013 and a look ahead to 2014. Gopka noted the palpable optimism as industry professionals converged in San Francisco this week.

After those initial observations, I left the room so the managing partners could discuss their portfolio firms in detail. The first week in January is one of the few times all the partners can get together at the same table. “That really only happens at J. P. Morgan,” he said.

Gopka and I agreed to meet up again at the Biotech Showcase, where he was slated to speak on the plenary lunch panel.

12 p.m. I arrived at the Biotech Showcase at the Parc 55 Wyndham Hotel and grabbed a seat for the lunch session, during which Gopka and other panelists discussed the changing ecosystem of drug development, particularly the need for firms—even those that are small and in the early stages of development—to research payer and reimbursement issues.

Management teams might claim that those are far in the future and, besides, the company likely will be acquired well before commercialization, Gopka noted. But “that’s not what we want to hear.” Instead, he said, potential investors are looking to management to explain how the new science can match market opportunities and how the company plans to create fundamental value as the business evolves.

1:45 p.m. After the plenary, Gopka had a meeting with another VC. I was asked sit that one out, too.

3:30 p.m. I met up with Gopka at a Market Street hotel where he connected with a Canadian biotech with a cancer gene profiling platform and a cancer drug in the pipeline. And that team had just as many questions for Gopka. For starters, the CEO asked, “Why should we do business in Russia?”

Gopka ticked off several reasons: the available financing, the clinical trials environment and the fact that the market, while admittedly small, is experiencing double-digit growth. “The co-development opportunities are very strong.”

According to Fast Market Research, for example, all health care expenditures are predicted to reach $150 billion in 2014, with more than $24 billion in the pharmaceutical market. And IMS Health’s analysts are forecasting a 10 percent to 13 percent per-year growth for the Russian pharmaceutical market, possibly ranking it the eighth largest market in the world in 2016.

Gopka conceded, though, that commercialization remained tricky, and in some cases presented pushback in terms of reimbursement. “You cannot succeed without a strong local partner,” he said.

A native Russian, Gopka lives in Moscow, where RMI is headquartered, but demands of his work mean he spends little time there. He estimated that about half his travels are to the U.S.—mostly the biotech hubs on the East and West coasts—and about 20 percent of his trips are to Europe. And the job keeps him busy; he lamented on the cab ride over to the next meeting that he had never really had time to sight-see on his trips to San Francisco.

But even if his transition from an investment banker—past positions include vice president of Barclays Capital for Russia/CIS—hasn’t added to his free time, working in health care offers rewards besides profits and returns. There’s the chance to invest in products and therapies that can save lives.

4:30 p.m. We arrived at RMI’s suite for the next meeting. But it was double-booked, so Gopka and an RMI colleague ended up meeting with the next group in the hotel restaurant. The CEO of the privately held firm, which boasts some impressive names among its board, ran through the lead program targeting an acute neurological condition.

6:00 p.m. Gopka met with another private firm, this one working on an antiviral technology and looking to raise another round of financing. The conversation appeared to go well: Antivirals are among RMI’s focus areas, and Gopka seemed to find the company’s approach promising. While that meeting was just the first step, the goal is to move quickly to determine if this is an investment RMI can undertake. Timing on these deals is critical. “Missing a good deal is worse than losing money,” Gopka told me after the company execs had departed for their next meeting.

7:30 p.m. We arrived at a dinner meeting for one of RMI’s portfolio firms. A largely virtual company with only a handful of full-time employees, the dinner marked one of few occasions that the entire board was in one place at the same time, he said. And cultivating the relationships among management teams, board members and other VCs is critical for success in health care. “This is a relationships industry,” he said.

And Gopka had plenty of opportunity to build new relationships and nurture existing ties as the J. P. Morgan conference continued.

Before we parted ways for the night, he had checked his schedule for Wednesday and found 14 meetings lined up back to back.

Let’s hope that fervent meeting pace is a signal that 2014 could be another great year for biotech.

Source: BioWorld, 16.01.2014