Innovation4Alpha Se2 Ep1 – Tobias Carlisle of The Acquirer’s Multiple

In this episode of Innovation4Alpha, Dr. Ross and Tobin Arthur interview Tobias Carlisle. Tobias is the founder of The Acquirer’s Multiple, which is a program that helps investors identify deeply undervalued stocks.

On top of founding the program, Tobias also manages a fund and an ETF under the Acquirer’s Fund brand, and he is the best-selling author of the book The Acquirer’s Multiple.

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Innovation4Alpha Se2 Ep1 – An Interview with Raoul Pal of Real Vision

Raoul Pal is an outspoken investor whose current mission in life is to change the face of financial media. He joins us from his home in the Cayman Islands to discuss his outlook on macro trends in investing, and why healthcare is one of the best areas to put your money.

Raoul’s background is diverse, but focused on finance for the past thirty years. He worked at Goldman Sachs where he ran the hedge fund sales business. He then ran a global macro hedge fund for the largest fund in Europe. For the past fourteen years, he’s written macro-economic strategy. To say that Raoul knows the industry would be a massive understatement, so we’re looking forward to learning what he has to share.

Raoul Pal
RealVision
Million Dollar Traders (BBC)
Cayman Islands
Recession: Officially 2 quarters of negative GDP growth
Negative Yields
TLT – long bond ETF
Euro dollar futures
Quantitative Easing
Stock Flow
@RaoulGMI

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Antonio Brown, the NFL, and the Case for Maximized Success

You’ve seen the stories. Oakland Raiders wide receiver Antonio Brown likes his old helmet. A lot. So much, in fact, that he’s been insistent on its continued use even after the National Football League (NFL) deemed the helmet to be unsafe and banned Brown from wearing it. Brown is now on the hunt for a newer version of the same model, taking to Twitter to ask for help. But if we might be so bold, we’d like to recommend that Brown consider a VICIS ZERO1 helmet.

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Therapeutic Startups — The AngelMD Investing Thesis

Rising drug prices and ever-increasing costs are two of the most debated subjects in healthcare. The Centers for Medicare and Medicaid Services (CMS) predicts (PDF link) that we will see 6.1 percent annual prescription drug cost increases until at least 2027. CMS expects healthcare spending as a whole to grow by 5.7 percent per year for the same timeframe. 

These numbers can be intimidating, but medications continue to be one of the most cost-effective clinical interventions available to physicians.

A new report by the IQVIA Institute for Human Data Science showed that large companies have cut their R&D budget shares from 31 percent down to 20 percent over the past decade. While that might seem like bad news for drug companies, it is actually good for startups. The pharmaceutical industry is relying more on acquisitions to fuel its growth as R&D budgets continue to feel the squeeze.

At AngelMD, we have seen many therapeutics companies come into the network. In fact, our first exit from the past 2.5 years of investments will come soon, and it comes from the therapeutic space.

For each innovation category that we invest in, we develop stringent criteria that a startup must meet. This holds true for therapeutics as well, and is directly responsible for the success that we have found with those investments. These criteria fall into five categories:

  1. Non-dilutive capital
  2. Large market opportunity
  3. A focus on the team
  4. Human trial status
  5. Acquisition negotiations

The preference for non-dilutive capital is obvious — less dilution means better potential outcomes for the company and for its investors. What is less obvious is the fact that the capital is available. Our preference is to not consider investments during the drug discovery phase. One way that we accomplish this is by looking for companies that surface as technology transfers out of academic medical centers, or those spun out from large pharmaceutical organizations. There is a better chance that companies meeting these criteria have been able to leverage non-dilutive capital during the early stages of drug development.

Small, fractional markets do not fit well within our investment thesis. Rather, we are constantly on the lookout for companies that are focused on a large market opportunity with a projected strong efficacy and safety profile. That is not to say that we will not consider drugs that address an existing market. But for that to align with our investment thesis, the therapeutic must have a projected advantage over the status quo.

As is common in the world of startups, the team is an outsized factor for success. Here is what we want to see:

  • Key scientist(s) involved, in a full-time role
  • A CEO that has previously led a team that delivered a therapeutic to market
  • A quality leader, skilled in managing the clinical trial process
  • *Bonus* – We afford preference to teams that have members who have worked together at a large pharmaceutical company

Clinical trial stages are also important to us. We look for companies that are positioned for first in-human testing. That is to say that we want companies that have already passed animal testing and are actively looking for healthy volunteers to test safety and dosing.

Finally, we want the startup to be focused on an exit, and making the right moves to do so. The company needs to be in active negotiations with a pharmaceutical company for acquisition after successfully completing early human testing. The capital requirements for testing beyond Phase 1 are potentially enormous. In fact, we prefer that a company enters into a contract that will offset at least some of the costs associated with 1a and 1b testing. This ties in with our desire to find companies using non-dilutive funding and providing better outcomes for both the startup and its investors.

This is an overview of the investment thesis that we follow for AngelMD. That said, it might not be the right thesis for you as an investor. But, as a community of investors, we can grow wiser when we share knowledge with one another. Do you agree or disagree with any part of our approach? We’d love to hear your feedback via your AngelMD profile.

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