Mablink Bioscience and Elaia: A Symbiotic Partnership
Written by Florian Denis with assistance from Anya Brochier, David Sourdive, Louisa Mesnard, and Marc Rougier.
Mablink Bioscience, a French biotech company engaged in the fight against cancer through the development of Antibody Drug Conjugates (ADCs), i.e., anti-cancer drugs that target cancer cells without affecting healthy cells — has been acquired by Eli Lilly, the pharmaceutical company with the world’s largest market capitalization ($554 bn as of December 4, 2023), only 32 months after the Seed investment round we led in April 2021.
Truly exceptional entrepreneurs are rare to find. We are honored to have been a part of the journey with Mablink and have learned so much working closely with Jean-Guillaume Lafay (Mablink’s co-founder and CEO) and with his close teammates (Frédérique Brune (CDO), Pejvack Motlagh (CMO), Stanislas Sordet (CFO) and Gaëlle Vansteene (Head of HR)) whose combined invaluable biotech/pharmaceutical experience and action-minded outlook were key to sustaining Mablink’s momentum.
The fruit of this partnership has also been a proof of our deep tech seed investment thesis: backing scientific companies while delivering strong performance to our investors within a short timeframe. As part of our PSL Innovation fund, Mablink’s exit is an outstanding fund performance contributor, not to mention marking one of the fastest exits in Elaia’s history.
As we have learned much along the way, there are many rich and unique elements to this journey and collaboration we’d like to share…
The biotech landscape
Before we jump into the story behind Mablink, it might be helpful to lay out the landscape where Mablink emerged. Mablink is not just any success story, but a unique (French) venture that overcame the recent and still current challenges of the European biotech investment landscape.
Although making significant progress recently and despite its research excellence, capital financing in Europe’s biotech sector still lags behind its American counterpart that has succeeded in delivering larger world–class companies (e.g., Amgen, Genzyme, and others), thus generating substantial returns for their compatriot funds across the Atlantic.
Part of the root cause for this lies in Europe’s overall struggle to attract capital and financing for early stage companies at scale. As a recent McKinsey study points out, while early-stage funding for European biotechs has grown on average by 13% ($20.6 million) CAGR over the past six years, this is still well below the U.S. whose funding has grown to 17% ($36 million) CAGR, perhaps indicating that the gap in early funding is widening. European CEOs looking for larger funding rounds may have to look abroad for investment support.
It was against this challenging backdrop that Mablink’s expert team (we’ll get back to this later on) continued to build and develop their proprietary ADCs…which is how our story intersects.
The economic context and traction around ADCs
Mablink is one of the very few companies developing third-generation ADCs.
ACDs are essentially molecules made of an antibody, able to preferentially bind and enter a chosen tumor type, linked to a small chemical acting as a poison once delivered to tumor cells. Early generations of ADCs were able to deliver these chemotherapies preferentially into cancer cells, allowing localised delivery of high doses of cytotoxic molecules into tumors. However, these early editions suffered challenges, such as sub-optimal stability leading to occasional leakage and impacting acceptable dosage. Like many disruptive technologies, a phase of early enthusiasm was followed by disappointment with many players closing their ADC programs. ADCs then entered a slower phase of incremental technological improvements, with the reputation of an “emerging” and complicated field.
Mablink’s co-founders including Dr. Warren Viricel (CSO), Pr Benoît Joseph and Pr Charles Dumontet, together with Jean-Guillaume Lafay, did not give up on ADCs and their tremendous potential for cancer patients. They focused on the technological heart of the issue and invented a chemistry that gave ADCs more stability and structural resilience for chemotherapies, unlocking the promise of ADCs to efficiently deliver large cytotoxic payloads directly to a tumor. Mablink was thus founded to continue developing these new approaches and bring them to the clinical stage, specifically targeting patients with high unmet medical needs.
Concurrently, earlier versions of ADCs were gradually being improved by established players, with some successes in the clinic, eventually leading to a streak of approvals with 9 ADCs reaching the market over the past four years, including key deals such as AstraZeneca’s licensing of Daiichi-Sankyo’s Enhertu (in 2019), as described in the graphic below. The ADC field started attracting renewed interest from pharmaceutical and biotechnological companies that are considering restarting or creating new ADC programs (e.g., Boehringer Ingelheim’s 2020 acquisition of NBE Therapeutics and Exelixis in-licensing an anti-TF ADC from ICONIC Therapeutics). In essence, Mablink came just at the right time as renewed appetite for ADC was growing.
The 2023 ($43bn) acquisition of Seattle Genetics by Pfizer significantly “cleansed” the landscape of third-generation ADC developers, leaving a temporary open space with very limited potentially acquirable assets. Mablink thus emerged as one of the rare ADC players and desirable acquisition targets for pharmaceutical companies wanting to set foot or gain a competitive edge in that field…. and as the saying goes: “everything rare is precious” and “it’s all about timing”.
How did Elaia meet Mablink?
Our first meeting with the company’s co-founders, Jean-Guillaume (CEO) and Warren (CSO) dates back to June 2020, during the Covid period where contacts were made via video-conference in shirts (and shorts) in the countryside. Early signals from our first interactions with Mablink’s management showed that the company was worth investigating: the relevance of their technological platform, the complementary and seasoned team of founders, their understanding of the market, their unique positioning vis-à-vis the pharmaceutical industry and above all, their ambition to make Mablink a European leader in ADC development.
It would indeed be presumptuous to say that we had instantly perceived the full potential of the technology and the people in front of us, but the urge to dig deeper was clearly present.
It’s important to point out here that our profession requires a healthy dose of humility when assessing a company, and that expert advice is an integral part of our job. In the wake of these initial meetings, reference calls with several oncology experts confirmed our intuitions: Mablink Biosciences had the potential to become a golden nugget, and the excitement for ADCs was anticipated to come within a few years at most (at the time we all thought it would be around 2024/2025… history proved it came much faster).
Technically speaking, PSARlink™ stands as a groundbreaking hydrophilic linker that employs a polysarcosine arm, a polypeptoid already present in the human body. Its potential for revolutionizing ADCs is immense, as it aims to expand the therapeutic index (a measure of the safety of a drug when used at efficient doses) and unlock the complete therapeutic potential they offer. Coupled with a promising leadership and an ambitious ADC pipeline centered around oncology, Mablink had everything it needed to become a success story.
“Elaia really led the seed round in the noblest sense. The role of a lead investor is to build and convince a syndication to invest in a company and to convince founders to believe in the added value of a syndication: Elaia played the role to perfection!”. — Jean-Guillaume Lafay, CEO of Mablink
The seed round
Two years after its inception (2019), Mablink had been able to produce impressive proof-of-concept data and was looking for equity to bring it closer to the clinic and develop a portfolio of drug candidates. As they approached their seed fundraising round, we worked together to identify the right amount the company needed to raise to create value.
It is the responsibility of the lead VC to form a synergistic syndicate around an entrepreneur. Targeting an initial seed investment of €4 million, we set out to find aligned co-investors, and this first stage of financing was formalized in April 2021. On this specific point, Jean-Guillaume commented: “Elaia really led the seed round in the noblest sense. The role of a lead investor is to build and convince a syndication to invest in a company and to convince founders to believe in the added value of a syndication: Elaia played the role to perfection!”.
Just 12 months after this Seed round, given the enormous traction generated by the company, the brilliance of the Mablink team, and combined with the efforts of all parties, the company achieved a €31 million Series A. At the time, we had no idea that this would be the company’s last round…
Elaia’s relationship with the CEO
In every VC journey, the human relationship that an investor develops with an entrepreneur is unique. At Elaia, we believe that a company’s success should also be that of its founders and management. With Jean-Guillaume, we’ve obviously had our disagreements (it wouldn’t be fun if we didn’t), and we’ve learned to know our limits and to get the best out of each other. Our early focus was on structuring a close and supportive governance around the CEO, and proactively anticipating each step as the company developed.
Jean-Guillaume added: “As CEO, one of the challenges is trying to align the interests and opinions of the team, the board and the bankers/investors. Elaia is a pillar of our on the board: always there to help align both the board and the investors by remaining a constructive, rational and pragmatic player, even when tensions could (and did) run high”
Jean-Guillaume belongs to the breed of lords that many CEOs should learn from, always keeping his employees top of mind in all considerations. Jean-Guillaume’s consistent values, approach and high standards guided Mablink’s employees and ensured consistency between vision, mission, strategic objectives and individual goals throughout this adventure. A key talent Jean-Guillaume deployed lies in his judgment and exceptional ability to listen and trust. He successfully transformed Mablink and his team as much as this journey transformed him…
The exit: our role as VCs
As in life, in VC there are always surprises. One of the role’s biggest challenges can be deciding when the best time to exit is, especially when an offer arrives earlier than expected. From a VC’s perspective, an earlier or later exit date might be preferable, but we always tend to stand by the entrepreneur’s final decision whether or not to accept an M&A offer when it comes. As we should, of course, we challenge, weigh the pros and cons, voice a rationale, diligently test hypotheses, and always maintain proximity with those negotiating: in the end, the governance supports the founders and management in fulfilling their fiduciary duty towards the company’s stakeholders.
Mablink had previously received M&A offers and it was always key that the board was aligned and confident about a potential acquisition. The Lilly offer fulfilled both of these requirements: Mablink was at a pre-clinical development stage, and there were many hurdles that could have impacted the final outcome. Throughout this two-year collaboration, we worked closely with Mablink’s executive team to monitor accelerating market trends to let Mablink “surf the wave” while the company was still building its pipeline. Like any financial player, you always hope for more, but reason must prevail.
As with any deep tech investment, given how cutting-edge the tech can be, an acquisition decision must be weighed in light of the viability of the technology, the financial condition of the company and the market appetite. Mablink had over the long-term, strategically prepared for a possible acquisition. This offer came (much) earlier than we expected!
What conclusions can we draw from this experience?
The sale of Mablink to a major pharmaceutical player is first and foremost an immense source of pride. As mentioned in Mablink’s press release, and beyond any financial considerations, with Eli Lilly’s global footprint, the advancement of Mablink’s groundbreaking technology will be accelerated in reaching countless individuals worldwide who are grappling with the burden of cancer (the leading cause of death in men and the second leading cause of death in women).
As for return on investment (I’m sure you’ve been waiting for this part), our early introduction to Mablink’s technology enabled us to delineate the opportunity for investing in seed and series A rounds under attractive terms. A key part of Elaia’s deep tech thesis is partnering early on with visionary founders, developing promising technologies, such as Mablink’s.
Without going too deep into details, Mablink is one of our best performing deep tech exits and certainly one of the fastest ones (32 months in total)! Strategically, this exit only lends credibility to the deep tech strategy Elaia developed back in 2018 with our initial PSL Innovation Fund. Focused on early-stage companies and concentrated on three pillars (Digital, Life Sciences and Industry), our investment strategy aims to prove that it is possible to deliver performance with values.
“Thanks to this story, Elaia is becoming the leading outsider in biotech financing in France. Its approach, value proposition and respect for entrepreneurs are dusting off an age-old sector.” — Jean-Guillaume Lafay, CEO of Mablink
What’s next for Elaia?
According to Jean-Guillaume: “Thanks to this story, Elaia is becoming the leading outsider in biotech financing in France. Its approach, value proposition and respect for entrepreneurs are dusting off an age-old sector.”
Within Elaia, we will continue to support French and European academic research (the sector is well-positioned for funding given the high number of patents filed) with our next deep tech fund, DTS3, that we are currently raising. We’re committed to investing in talented deep tech entrepreneurs whose ideas and vision have the potential to disrupt established methods and operations, while also offering a genuine opportunity for investors. We will continue looking at the biotech sector and continue to perfect our expertise, and ideally, with more impressive exits such as Mablink. We are convinced that it’s just the beginning…
A special thank you to Jean-Guillaume for lending his voice to this article!
