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Bayer Dealmaker Goes VC

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Gunnar Weikert may not have name recognition in the scientific community, but he has been behind some of the biggest deals the genomics sector has ever seen.

As senior vice president and global head of physiomics at Bayer, he was a key player in the decision to form blockbuster partnerships with Millennium and Lion Bioscience. In addition to giving Bayer access to cutting edge technologies, the equity investments the company made in Lion and Millennium have scored huge returns. At current prices, the holdings are now worth about 20 times the original investments.

After proving his acumen for picking winners, Weikert, a 36-year-old holder of MD, PhD, and MBA degrees, decided to leave Bayer to form Inventage, a venture capital fund in Dusseldorf, Germany.

Having raised money from some of Europe’s leading entrepreneurs, he has already made about six investments in fledgling European and American genomics companies and plans to invest about $15 million in the next 18 months.

GT: Why start a venture capital fund?

Weikert: At the end of my time with Bayer, I was mainly identifying potential companies, potential concepts, potential business ideas, and designing them in a way or combining them in a way that made sense and created value.

When I first picked Millennium, I think the stock was at about $12 or so. I told people at Bayer the stock will go up. No doubt about it. This company is undervalued and it will be an extremely good investment, simply based on the thoughts I had about how genomics will develop in the future and what Millennium had in the shop.

So, that for me was a clear win, and that’s pretty much what I’m doing now in venture capital.

GT: What is your strategy?

Weikert: We have private investors who have an interest beyond a financial interest in investing in the healthcare industry. That gives you a couple of advantages. We are highly flexible with the fund. We only take money from the fund that we can invest in high-quality startup companies. We have a clear focus. We focus on biotech healthcare, but everything there, IT solutions, web-solutions, patient-record systems — whatever is interesting in healthcare.

I believe that if you have knowledge, deep knowledge, and industry expertise, you can identify whether a concept makes sense, and will survive, and will be successful.

GT: What are you looking for when you make an investment in a company?

Weikert: The way they can increase and optimize the process. If a company came to me and said, “Hey we do it better with the following approaches,” even without having a new technology, I would say, “Okay, that’s something we could talk about.”

I believe in technologies, of course, but not only in technologies. If one car company has a new engine, maybe they have an advantage of half a year or so. After that half a year or a year, all the other companies have the same kind of new engine or whatever it is. The same is true with everything else regarding technologies. But what you can protect is processes in the company. That’s not so easy to copy.

GT: Why is it so important that genomics companies focus on process?

Weikert: Focusing on process allows you to make sure you understand where you can create value, how much money you should spend per step.

Normally researchers find something and believe it’s so interesting they want to work and work on that stuff. But drug development is also about making a decision and saying, “Okay, this is over now, we have to jump onto something else,” because it will be too expensive to answer those very interesting questions and it will not create value.

Process is also important for quality and for determining the reliability of the outcome data.

GT: Do you think this will help to drive down the cost of developing drugs over time?

Weikert: No, I don’t think this process will become cheaper. In general you could say now we have more access to targets. But I think it will cost more or less the same, although the quality will improve.

—Jennifer Friedlin

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