Interview with the Apollo Health Ventures Team
Nils & Ole, why did you found Apollo Health Ventures?
Nils: Innovation has always made the greatest impact on human development. For a long time, Ole and I observed that one of the greatest challenges remains to be how we tackle aging and age-related diseases. For us it all started with a visit to the Buck Institute for Research on Aging in 2016. The Buck Institute is one of the largest research institutes in aging science. When we visited the Buck, we were astounded at the progress that has been made in aging science in the past 20 years. At the same time, we were stunned at how little attention this exciting sector of biological science had received from investors. Simply speaking, we are the first generation of human beings to begin to comprehend aging on a biochemical level, and it has changed everything. We, as serial entrepreneurs, were convinced that we had to do something about it. Our answer was to establish Apollo Health Ventures — the first venture capital (VC) firm specializing in venture creation in the aging sector. Among all the opportunities that I could pursue, I chose Apollo as my next career step. I invested not only a significant amount of my personal wealth, but all of my energy and time behind Apollo; and I am convinced that it will be worth every penny and every sacrifice.
Ole: Since the beginning of aging science in the early 2000’s, exciting new tools and technologies have enabled significant acceleration of discoveries in the space. And these breakthroughs have not only allowed but emboldened the field to move from basic science to applied technologies. Emerging technologies such as single-cell analysis or CRISPR-Cas 9 have been major leaps forward for developments in the aging sector. When we started Apollo in 2017, the timing was perfect to jump on the next wave of medical revolution. We have no doubt that this will be one of the biggest investment opportunities of this decade.
How many assets under management do you have? Who are your investors?
Ole: We started Apollo Health Ventures with our first investment vehicle in 2017 — a smaller setup of $20 million USD. Last year was a good year for Apollo, as we closed our second fund and institutionally-backed VC fund with $180 million USD in commitments. The last fund attracted even more investors than we expected, resulting in Apollo being significantly oversubscribed. We are proud that we brought institutional investors to Apollo such as a major German development bank as well as a pension fund. Large family offices also joined us, including those of Delivery Hero founder Lukasz Gadowski. Additionally, there are general partners (GPs) from other funds and other Ultra-high-net-worth individuals (UHNWI). For instance, we are proud to call Johannes Huth — partner and head of KKR’s operations in Europe, the Middle East and Africa — our investor. Apollo’s investor base extends far beyond those names, but we cannot disclose this.
What kinds of investments are you backing with your fund?
Jens: We are backing companies that are developing innovative technologies targeting aging and age-related diseases. This encompasses therapeutics and healthtech companies. What unites all of our ventures is their goal to develop innovative technologies which can initially assess and subsequently prevent or delay the onset of age-related diseases. That is a huge unmet medical need, because current standards of care mainly focus on treating symptoms. All of us know of disheartening stories of people suffering from severe and chronic afflictions, like Alzheimer’s, cancer or heart disease. Science is finally enabling us to tackle these diseases with novel approaches. There are dozens of exceedingly compelling opportunities out there, where companies need to be formed around scientific concepts.
Can you give us one example of an existing portfolio company?
Nils: One good example of a longevity drug is a natural compound called rapamycin. We have seen a really robust increase in lifespan in various animal models, when the drug is used, with some data points as high as 26%. Despite the amazing data, rapamycin cannot be tolerated by humans in the required dosage that would be needed to replicate the lifespan effects, because of the serious side effects of the drug. To address this, we built a company called Aeovian Pharmaceuticals which is developing a “safe version” of rapamycin. I cannot reveal too much about Aoevian currently, but the potential of their compounds is impressive.
Apollo is targeting age-related diseases. What do you mean by that?
Marianne: Age is the main risk factor for the occurrence of a wide range of different, chronic diseases. The field of age-related diseases is very broad and covers, for instance, cardiovascular diseases, Type 2 diabetes, cancer and neurodegenerative diseases, such as Alzheimer’s or Parkinson’s. From a magnitude perspective, it is important to understand that approximately 90% of deaths in industrialized countries are attributable to age-related causes.
How do you invest in the aging sector?
Nils: We are entrepreneurs by heart. In the past 12 years we have co-founded more than 15 companies; six of which have already been sold or have gone public. What we learned, over the years, is that successful venture creations happen when you are ahead of the curve and put a lot of hard work into the companies. Especially when it comes to team building and fundraising skills, thriving companies often have an edge. Based on this successful track record, we are building promising companies under the Apollo roof.
Marianne: The Apollo team has years of experience in biotech investing and accumulates high domain knowledge in the aging sector. Based on this expertise, we partner with leading scientists from Europe and the United States and jointly establish companies. We are not only co-founders on the capitalization table, but are also often operationally involved and support the teams in fundraising and team building. We are well aware that we are not always the first to have a good idea. We also follow external deal flow closely and ultimately add the most promising companies to our portfolio, irrespective of their source.
What are your primary strategies to mitigate risks?
Jens: We neither start with aging per se as the endpoint of our development programs, nor large indications with a broad spectrum of patients. Instead, we pick a smaller indication, or what we call a “stepping stone indication”. These are diseases which are caused by a molecular mechanism similar to age-related disorders. The clinical development costs and time lines for such diseases (usually genetic orphan and rare diseases) can be significantly lower. But given a tight mechanistic link these are good “proof of concept” indications for us. If the data is good, we can go way beyond those stepping stone indications.
Ole: Our venture creation model allows us to acquire common shares essentially “at cost.” On top of that, we aim to build platform companies. A platform company develops several compounds in parallel which, figuratively speaking, gives the company “various shots on goal”. This way, we stay independent from the success of one individual development program. Another beauty of our industry, is that innovative therapeutics are protected by patents. Even in the unlikely event that the companies development efforts fail, the IP can still be monetized.
In what ways can mankind benefit from your investments?
Nils: It is terrifying to witness how healthcare systems are ignoring the fact that a major “silver tsunami” will be upon us very soon. Consider just a few numbers in this context. The US spends 37% of its healthcare budget on the last two years of a human being’s life. By 2050, the US population older than 65 is expected to grow by over 50%. This change in the age pyramid is likely to lead to an additional spending of $7 trillion in the US alone. Current standards of care cannot deal with this immense societal problem. Investing in technologies preventing age-related diseases is therefore not only one of the biggest investment opportunities, but also the best strategy on how we can cope with this imminent demographic shift.
