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Investing in the Future of Healthcare
Episode

Peter Crane, Venture Investor at Outsized Ventures

Investing in the Future of Healthcare

In today’s episode of the Outcomes Rocket Pharma, we are privileged to have Peter Crane, a venture investor at Outsized Ventures, an early-stage VC fund based in London that partners with founders pushing the boundaries of science and technology to solve the world’s greatest challenges. Peter shares his fund’s mission to invest in science and engineering-focused companies and the capital partner role they plan in scaling the businesses and bring them to market. Unlike other VC funds that take a long time to process, Peter emphasized Outsized Ventures release funds in a quick and unfussy way, enabling innovators and companies to achieve full potential at a faster pace. He also shares his thoughts on opportunities he has seen across drug discovery and e-tech healthcare and changes the value chain will go through as the new modalities enter the market. Join us and listen to this fascinating interview with Peter Crane!

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Investing in the Future of Healthcare

About Peter Crane

Peter is a venture investor at Outsized Ventures. Prior to joining venture, he was a strategy lead at a deep technology company working at the intersection of biology and technology. He worked in biopharma and run healthcare accelerators. He has a Ph.D. from Oxford University in Chemical Biology, and an undergraduate Masters in Chemistry from Warwick University. 

Peter Crane, Venture Investor at Outsized Ventures: Audio automatically transcribed by Sonix

Peter Crane, Venture Investor at Outsized Ventures: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Kyle Wildnauer-Haigney:
Hey everyone, welcome back to the Outcomes Rocket Pharma podcast. I’m your host, Kyle Wildnauer-Haigney. Today I have the privilege of interviewing Peter Crane. Doctor Peter Crane is a venture investor at Outsized Ventures, a late seed investor based in the UK. At Outsized Ventures, they partner with ambitious European founders, building science-centric businesses. Within health care, they’ve supported entrepreneurs across therapeutic biotech diagnostics, health tech, agri-food, life sciences tools, and frontier technologies. Before moving across into venture Peter was a strategy lead at a deep technology company working at the intersection of technology and biology. He wrote and spoke on engineering biology, metadata and biology, active machine learning, and advanced therapy bioprocessing. Previously, he was working in biopharma and running health care accelerators. He has a Doctor of Philosophy from Oxford University and Chemical Biology and an undergraduate master’s in chemistry from Warwick University. He lives in Oxford, UK, and is a bona fide animal lover. Well, Peter, thank you so much for joining the show and thank you for being here today.

Dr. Peter Crane:
An absolute pleasure to join. It’s nice to talk to my colleagues across the pond from here in Oxford. So yeah, always a pleasure.

Kyle Wildnauer-Haigney:
Fantastic. Know maybe to start out and kind of give some background for the listeners. I’d love to understand what inspires you to work in health care. What started you down this path?

Dr. Peter Crane:
Yeah, sure. So let me give a little bit of a flavor of how I got to where I am and why my sort of whole career has been around it in healthcare. You know, as you sort of alluded to in your intro, I originally was a scientist. I was a lab chemist doing natural sciences, and I really realized that I didn’t want to go into the sort of the usual sort of career paths for a chemist, you know, a banker, a lawyer, oil and gas, but really wanted to apply those skills, you know, in an industry where I can have a real impact upon the patients. So this has been the whole sort of motivation of my last 10 years in healthcare is, you know, whether it’s natural sciences, whether it’s on the digital side, whether it’s on, you know, on the business side, it’s always been about helping patients and helping people, not just individual patients, but helping generations to resolve sort of health care challenges. You know, I do think now we’ve been on the venture side we do look more broadly at challenges. So we also look at challenges around climate and society. But for me, it’s always been drummed into me from a very early part of my career that if you want to make what we might say in the UK, a quick buck, a quick dollar, you don’t come into health care, you come into healthcare to do well by patients. And if you do well by patients, you do well financially and as an investor, you do well. So for me, it’s really, you know, looking at this, take a step back as well and looking more broadly, I am a scientist originally. I want to work in areas where there’s excitement and there’s progress being made and where unmet needs have to be solved. And I view certain parts of health care as having those huge, huge challenges for us to solve as a society like Alzheimer’s. The COVID pandemic is exposed maybe the best and worst of sort of our preparedness around vaccines. So for me, big problems, unmet needs, helping patients, scientific base, for me, that’s really what inspired me to get into initially, but then also stay in health care. And you know, I’ve had forays where I’ve spent a few months trying and looking at syntaq, doesn’t get me excited, unfortunately. I just can’t get excited by sort of payments, processing, and stuff like that. So for me, it’s patients, it’s science, it’s helping people or enabling others to help people, which is what really, really inspires me To get up in the morning.

Kyle Wildnauer-Haigney:
I absolutely love that, and I think it’s so important to focus on the patient and the financial results will follow. Although I hope it isn’t dissuading any talented entrepreneurs from entering the spacE because health care is really hard, you know?

Dr. Peter Crane:
I know. That’s the thing, right? It’s hard. I think the thing that always surprised me was maybe it’s different in the US, certainly in the UK, the healthcare and biotech sectors, it’s an incredibly supportive ecosystem. It’s an ecosystem that you get into because you want to change the world in 10 years’ time. I mean, if you’re developing a drug now, you know, we could talk about what the future of medicines looks like. Well, let’s look at the pipelines that pharmaceutical companies now. That’s what it is going to look like in five or six years. It’s a long-term gain. The financial rewards are there for entrepreneurs that want to make a difference. Hundred percent, they’re there. You’re not going to get a 12 month, you know, 18 months. Some of the deals we’ve seen recently in the financial services and fintech markets, you’re not going to see that sort of stuff in health. But the impacts there, the outcomes there, the financial rewards are there, just a slightly different game.

Kyle Wildnauer-Haigney:
It’s very fair. And so I’d love to hear a little bit more about Outsized Ventures and how are you and your fund adding unique value to the health care ecosystem?

Dr. Peter Crane:
Yeah, I mean, this is one of our favorite points of discussion. As a fund, we’re generous. We invest broadly across science and engineering-focused companies. What’s quite nice about that is you do start to see convergences between different technology areas. That could be photonic sensing and sort of glucose monitoring. Then a company recently released a product in that space. It could be, you know, the intersection of tech and bio, which is now becoming quite an important area. So having the generalist thesis, I think, gives us that ability to start broad sort of really go into into the areas of opportunity. But as a VC fund, we also don’t over-egg our own value that we provide out in this ecosystem. You know, our value is to support founders of building companies that are changing tomorrow. We’re not building those companies. We’re not in the trenches every day. I mean, this industry is a tough industry. We’re not in that in those trenches every day, you know, fighting of sales cycles and trying to convince people to adopt a product or, you know, doing R&D in the labs. So when we looked at this as fun and how we could have the most value to those entrepreneurs, we kind of came to the conclusion that we felt certainly in Europe that a lot of differentiation between VC firms in terms of value out of an ecosystem is often kind of nothing more than marketing PR and, you know, all that sort of bits. So for us, what’s the value that we can provide for an entrepreneur? We can write checks as quickly as we possibly can so we don’t spend. And so U.S. listeners, this might be quite surprising. But in Europe, it’s still quite common to have a really long and drawn-out fundraising process, unlike in America, where things happen a lot quicker. So let’s give our European companies more of an American-style fundraising process, a lot quicker and a lot more, a lot more to the point. And once we’re invested in the company, let’s try to be fairly frank, get the hell out way of the entrepreneur, and let them try and build that company. Yeah, sure, we’re going to be there helping raise the next round. We’re at the end of the phone where we can help them with all the bits that they might want to do, but we’re not selling on that service to those founders. The very best founders don’t want to be interfering in their day-to-day, especially in a market where I spent the last couple of years, you know, in drug discovery and life sciences. But I’m very conscious that within a couple of years, you know that knowledge will, you know, the market will have moved on, techniques will have moved on, contacts will give moved on and the value that we provide there would be lower. So we try to add value. We try to outdo you by providing capital as quickly and as cleanly as possible. We’d like to think we have value in other ways. We certainly understand the space. So that’s probably like, you know, in itself, maybe we’re comfortable with stuff like technical risk, stuff like long sales cycles, which in itself is a value add. But really, it’s about getting out the way, not interfering with brilliant founders who are trying to build the companies for tomorrow, and letting them get on and building those companies. It’s hard enough to deal with these companies in healthcare without investors. They’re nagging you every week.

Kyle Wildnauer-Haigney:
No, I love that. It’s a very humble approach to in recognizing that these entrepreneurs who are living closest to the problems, and living and breathing their specific business are probably in the best position to solve those problems. And you guys are playing more of a support role and doing the best you can on the financial side. I think that’s absolutely brilliant.

Dr. Peter Crane:
I was just about to add, I mean, it comes back to what we say when we’re investing in companies as well is, if we like founders who have found like what might appear quite boring problems and health care, really, you know, let’s be frank, especially outside of drug discovery, really is an industry about solving lots of very small, boring problems, putting them together into a larger solution and then creating value through that process. But you don’t find you don’t read about those boring problems until someone is kind of started solving them. You don’t see them in Forbes. You only find those boring problems by being on the ground. You know, talking to doctors, being a doctor, being in the pharmacy yourself, engaging with people that are trying to deliver health care, deliver drugs, create drugs. You know, the academics working on the new advances. You don’t see those problems unless you are close to the challenges. The challenges for the entrepreneurs are often seeing that problem, then be able to communicate that bigger vision for how they can transform health care. And we don’t try and say, you know, we have to invest in, whatever the latest trendy thing is in healthcare because by the time it’s trendy, maybe the opportunity is gone.

Kyle Wildnauer-Haigney:
Yeah. And so maybe for our listeners, are you only investing in European companies, or are you also investing in companies across the world?

Dr. Peter Crane:
We’re already investing in European companies. One of the kind of thesis that we’ve got is, you know, we think there are some fantastic US venture firms back in healthcare, drug discovery companies. We’re also now seeing an increasing number of those firms and other firms appearing in the UK to back deep tech or health care companies series and sometimes even earlier. But we still in the UK have a little bit of doubt and certainly across Europe, we have a little bit of gap between the traditional seed round and the usual series round, and this is quite common for companies to try and do hard science, engineering or sell it to the health care environment. Because things take longer, things are harder, things are slower than expected. So In Europe, we’re paying the least plus strategy and just trying to help companies really accelerate towards really compelling series A’s and really compelling sort of superlative momentum in what we’re doing.

Kyle Wildnauer-Haigney:
I love it, and it’s going to be great for those entrepreneurs and all the innovation that’s coming out of Europe to have a capital partner to help them scale the business and bring it to market. One question I have for you and I’d love for you to discuss is just really what are the big themes and kind of opportunities that you’re seeing across kind of drug discovery or this deep tech health care that you are focused on?

Dr. Peter Crane:
Yeah, sure. I’ll comment on these. However, on prefects, like I say, what I get really excited about is things I don’t know about so founders that come in and say, Look, here’s a problem that no one knows about because everyone’s ignoring it or everyone’s too busy doing other stuff. Look, I mean, I spent the last few years working with and around companies in the advanced therapy space. So for us, that’s an area of real interest. Let me just give a little bit of context to the listeners. So if we look back at the drug discovery or the pharmaceutical industry over the last sort of say, let’s say, 30 or 40 years, we’ve seen industry transition from dominantly chemistry-based, so small molecules, chemistry-based products, molecular weight, a couple of hundred stuff like aspirin by example, published 100 years ago, but that sort of size of molecule into biologically-based products. So this was originally like local antibodies and therapeutic proteins and other sorts of products along those lines. So companies like Genentech, Amgen and then, of course, we saw the wider industry move this way about 10, 15 years ago. And so every pharmaceutical company, the brand is a biopharmaceutical company to sort of say, Hey, guys, you know, we don’t just do some molecules now, we do the whole range of sort of what they call biologic modalities. What’s been really interesting is if you were to sort of like plot a chart of like modalities over time or modalities like this is a chemistry-based product is this a biological product, it’s the thing that’s causing the therapeutic action is you would see that, you know, you went from small molecules to mAbs, and it took about 40 years, probably to make that fully make that transition. And in the last 10, 15 years, we’ve just had an absolute Cambrian explosion of new ways to treat disease. So this ranges from gene therapy. So, you know, putting stuff inside lentiviruses or inside AAV capsids all the way through to sort of cell therapies. So be stem cells. It could be T cells. It could be a whole range of different cells that can be patient-specific. It could be more generalized, autologous allogeneic. And now on top of that, we also see other levels of complexity. So this could be the microbiome. So you in your gut or in your skin and how it interacts with your body or mRNA. And this is the greatest audience for molecules, you know, Peptides. It’s just, you know, digital therapeutics. It’s just a continuously Exploding space Pf options for how we can treat disease. And this is really interesting because it’s a little bit like machine learning. If you’re looking for someone with 50 years of industrial, you know, not 50 years a bad example, but 20 years industrial experience in mRNA, they probably don’t exist. Because as space it’s been around since 2013 if that. So we’re at like year eight or something now with this market. But the ability to open up new areas of biology has really driven this. So, you know, moving from sort of stuff to manage, manage conditions to treating conditions. You know, the speed at which we can develop products around those areas is now incredible. Or all that sort of stuff being brought to bear on biology, I think it is incredible. But as a VC fund, as a slightly small VC fund, sometimes you know it’s hard for us when we’re closing. It’s not a huge fund. It’s hard for us to really participate in what is now a very, very vibrant, aery, very big money, big-ticket therapeutic environment. So where I get really excited is I get excited by kind of the second-order effects of that Cambrian explosion. So we saw this with cell gene therapies, where it’s great that you can rate a patient-specific therapy. You can take T cells out of the patient’s body, you can engineer them and you can put them back in. That doesn’t really work unless you have the infrastructure unless you have the hardware unless you have the software unless you have all the capabilities to industrialize that process from an academic process into a large-scale operation. So that’s where we’re getting really excited. It is across this modality space is all that second-order tooling that’s going to be required to deliver these products at a commercial scale. And we think there are great opportunities to invest there, both in discovery tools. So it could be like machine learning applied to the engineering of certain cell types. It could be hardware, so it could be sort of like bioreactors. It could be downstream Purification equipment purifies the stuff. Once it’s been created, it could be software and digital infrastructure for managing patient-specific therapy delivery or data management. So we’re really excited specifically about that area. We also we do also invest in the occasional sort of therapeutic platform where maybe make the approach or the biology really gives us an alpha on the market hasn’t been commoditized yet. So we did an R&D company out of Boston. There was a perspective on Rna and tumor-stromal machine learning company out of Toronto as well, which again emerging space of biology where machine learning can really be applied. But for us to start tooling, it’s that infrastructure that gives the ability to do new biology. And that’s why we spend a lot of our time looking wealth than the more traditional sort of biopharma maps or cancer drugs sort of cell markets. Yeah.

Kyle Wildnauer-Haigney:
And I imagine with this explosion of modalities that the industry, the pharma value chain, from the drug discovery all the way down to kind of access and delivering the drug to the patient is going to have to adjust Right. and it’s going to have to change. I would love your thoughts on what sort of change do you think the value chain will have to or will go through in the coming years as these new modalities enter the market?

Dr. Peter Crane:
Well, I mean, look, it’s going to have to be torn up basically, so we’re not talking about change here, we’re talking about a revolution. It’s really that move towards precision medicine, getting the right drug to the right patient, the right time. But if tell you autologous cell therapy space, so companies that are creating all these kind of wonder cures for hematological cancers, so cancers of the blood, there’s been a huge amount of investment just in the last couple of years into manufacturing and delivery. And also a lot of interesting pricing around that market because suddenly you’ve got products that you know, rather than an antibody and antibody produced that on tens of thousands of liters scale. It’s a mass-market product. You put it up into vials, you ship that around. This patient has got that. We will try them out on that. And if it works, it doesn’t work, whatever. But with this cell therapy space, we’re taking the patient cells. We have to engineer them, get them back to the patient, put them back into their body, and it’s also curative. Sometimes the pricing of these products is in the hundreds of thousands of the millions, and you’ve got all that manufacturing complexity. You’ve got all that sort of end of one-level delivery. So it’s not a mass-market product, but unfortunately, you still got all the biological complexity that comes with a large-scale product. So somehow you have to be able to break that barrier between delivering a much more complex product in a much lower volume and at a cost that costs us sort of at least approachable to sort of payors and stuff. So it’s a real challenge. And if you think about it like that, we’re not talking about just point solutions here. We’re talking about a small-scale change of how we develop and deliver products so it could be rather than waiting for a patient to present with kind of an anatomical presentation of a disease, maybe we’re testing preemptively to prevent disease or identify patients with a genetic predisposition towards a certain condition where they’re monitoring and intervening in a much more early stage. But then who gets the benefit of that? Is that current insurance? Is it like a mortgage? How does that work? Once you start thinking at end of one, you start thinking more complex biology, starting combinations of biology. So maybe a digital therapeutic plus product plus a companion diagnostic, you’re really getting into a space where it’s that cost complexity issue that’s coming up again. And this is why we think tooling is so important because tooling is the only thing that can really be tooling and regulation would be going only two things that can help bridge that gap. Yu know, as an investor that we don’t have hundreds of millions of dollars. I can’t do therapeutics discovery platforms like some investors. When I see investors pouring hundreds of millions of dollars into selling gene therapies into stem cells and gene therapies into mRNA to the microbiome by looking And thinking, Okay, so these products are only hitting the market in six to seven years probably to get through the clinical trials process. What technology is going to now enable us to deliver those products to patients at scale or to make it viable to deliver those products to patients at scale and ask where I get sort of excited and there’s lots of boring problems in that space, you know, for how you pack vials to how you quality control products. There are loads of loads, really big, boring problems to be solved in that part of the value chain.

Kyle Wildnauer-Haigney:
Yeah, it’s fascinating. Across the guests on this podcast, something that keeps on coming up is how are we going to deliver and contract for these curative drugs that are coming down the pipeline? And part of it is around pricing Right. more kind of looking at value-based contracting. But then there’s also a notion of like, is the overall insurance industry kind of positioned to contract for these therapies? And the second thing is the services Right. and kind of some of those mooring problems that you were highlighting, like how could you build the supply chain in a cost-effective manner and get it to the patient and provide those wraparound services so that you’re not just delivering a $100000 drug to a patient? They take it and then maybe they take it once or they’re not following up and then they have poor adherence and there’s no benefit. And actually, those wraparound services that support the patient.

Dr. Peter Crane:
And it’s finding the resource to cost those services that delay future costs in like five years time. But finding the budget to resource them now is the sort of challenge. Isn’t that it’s always the case that health care is like knows what they should be doing. They can’t cope with the budget. So it’s like they’re watching like the tsunami coming and it’s like, we all know it’s going to come, but it’s like, we can’t do anything about it.

Kyle Wildnauer-Haigney:
So yeah, I’m optimistic, but also very cautious around how the next 10 years will shake out. I mean, something has to give because I think at the end of the day and I’d love your thoughts on this, is this represents a huge opportunity for the patient Right. into what you were saying in the beginning about how this is all focused on patients and improving lives. But what are your thoughts around how this bolus of new therapies that are curative coming down the pipeline will change the industry from a patient perspective? Yeah, yeah.

Dr. Peter Crane:
I mean, I think more broadly, the way we see this at Outsized Ventures is a move from an ecosystem where the patient is. I’m sure there’s a better way of describing this, I’m not fully up to date on a lot of the sort of health care literature around this, but a move where patients are kind of the receivers of health care to move where patients are managing their own health care experience. So we really see an ecosystem of products forming around patients that enable them to choose where they want to indeed intervene in the health care, choose how they want to intervene in their health care and be in control of those decisions. If you want to fave preventative early screening diagnostics being run, brilliant. You can do that. You can choose that where I’m less certain, especially here in the UK, is how we resource again, to my earlier point. It’s one of the big challenges, which is that I see is a lot of startup companies will come and they’ll say we are changing the patient experience and then we can choose what they want. You know, we can deliver better quality of service. We’re saying this amount of value, creating this amount of value for the healthcare system, but that’s not sort of that’s like economic value. It’s not sort of, you know, cashback in my pocket that I can spend on other things immediately. So there’s always ways that little bit again, to my point. So it’s a little bit of conflict between the short term and the long term around this. But look, we view it as patient experience is going to be the new thing. It’s going to be about patients taking control of their own pathway through the health care system. They’ve been able to choose what interventions they want. You have to choose ideally where they want those interventions. So do I want to if I’m doing like a yearly check, Like check for skin cancer, maybe I’ll use a tele dermatology service to allow me to do that at home? And ideally, those services will be both lower cost to health care services, but also a better patient experience as well. And if you can get that sort of lower cost and better patient experience around those services, that’s what will drive that adoption of those products. But specifically around the curative stuff. I mean, there’s some I think before you can get kind of the patient bit around them, these products are still predominantly in sort of rare diseases or in like the most cancers. I think there still needs to be a lot of sort of base-level behind-the-scenes innovation into sort of manufacturing the R&D to stay on these to solid tumors, more indications before we’re going to see that sort of larger mass-market problems caused by these products. I think we’re probably about 10 years away from seeing some of those products coming on and really disrupting the wider oncology market or some of those other areas. But who knows, it might be sooner.

Kyle Wildnauer-Haigney:
Well, Peter, thank you so much for speaking with us today and joining the show. This has been a fantastic conversation and fascinating. Quite honestly, I’d love you to just give us a closing thought and also where the best places that listeners can connect with you.

Dr. Peter Crane:
Yeah, sure. So I mean, I always say to anyone who’s working in health care, keep sight on helping people. It’s a hard industry, but the great thing about it is like the most valuable things are hard. And, you know, health care is one of the hardest industries. I suspect the industry that’s maybe harder is the climate at the moment, but. So get the industry going if you are very mission-driven. I mean, always happy to chat with founders or entrepreneurs, people in the community that is trying to do hard stuff. We love talking to people that people think are crazy. A lot of my job is is trying to determine whether someone’s good crazy or bad crazy. You know, we just try to find people that really want to change the world. The best way to get in touch with me is through LinkedIn or email. So you know my LinkedIn, I’m sure you guys will put it on the recording or something, but my email is peter@outsized.vs. I’m always happy to take cold emails from people that are generally new in this industry.

Kyle Wildnauer-Haigney:
Awesome. Well, thank you, Peter again and have a wonderful day.

Dr. Peter Crane:
Appreciate it.

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Things You’ll Learn

  • The healthcare and biotech sectors are ecosystems you get into because you want to change the world in ten year’s time. 
  • Investment is a long-term game. 
  • In Europe, it is quite common to have a long and drawn-out fundraising process. 
  • In the last 15 years, there has been an explosion of new ways to treat disease. 
  • The most valuable things are hard. 
  • We are trying to find people who are trying to change the world

 

Resources: 

Websites:

 https://www.outsized.vc/  

http://www.peterkcrane.com/

Email: peter@outsizedvc

LinkedIn: https://www.linkedin.com/in/peterkcrane/

Twitter: @peterkcrane