Clive Cookson and Kasim Kutay’s Fireside Chat: Optimum’s 15th Annual Healthcare Investor Conference

Thanks in part to the massive success of Novo Nordisk’s obesity drug Wegovy and its counterpart for diabetes, Ozempic, Novo Holdings’ coffers have been swelling. It now manages a huge $30bn investment fund.

In a fascinating fireside chat at this year’s Optimum conference, Novo Holdings’ CEO Kasim Kutay provided a unique insight into this growing responsibility and the strategic direction in which he is taking the organisation.

Speaking to Clive Cookson, Senior Science Writer at the Financial Times, Kutay explained that while the fund’s main aim is to build wealth, Novo Holdings placed a huge amount of importance on its other stated objectives of improving the health of people – and of the planet.

Around half of its capital is allocated to life sciences with the remaining half being invested elsewhere – some in more traditional assets like real estate, but also in more leading-edge areas such as bioindustrials.

Novo Holdings’ commitment to improving global health was demonstrated, said Kutay, by its near half a billion dollar ($462 million) investment earlier this year in Paratek Pharmaceuticals, which specialises in new antibiotics to replace existing ones increasingly being made redundant by the rise of antimicrobial resistance (AMR).

Cookson honed in on Novo Holdings’ focus on bioindustrials: it has been a major investor in this burgeoning sector, with a controlling shareholding in Novozymes, the world’s leading supplier of enzymes, and Chr. Hansen, a world leader in microbial industrial solutions.

While Kutay said bioindustrials had been hampered by negative optics – such as the misconception that they are synonymous with genetically modified products – in practice they held huge advantages. He cited ‘bio’ detergents, in which enzymes are added to enable effective cleaning at lower temperatures, as a prime example.

One of the key challenges facing the bioindustrials sector in the EU, he said, was the long time it took to get new products approved – up to eight years, compared to around two years in the US. To remain competitive, the EU must streamline its approval processes while maintaining product quality.

Turning to markets, Kutay acknowledged shifting dynamics, saying European financial centres had lost some ground as life science companies increasingly moved to NASDAQ. Europe had to maintain “vibrant” capital markets to retain growing life sciences companies, he stressed.

He also argued London was guilty of a missed opportunity in failing to establish itself as a global biotech hub – especially considering the advantages offered by the Golden Triangle (Oxford, Cambridge and London), which is home to much first-class science and medical research. While much of the science behind the blockbuster Humira – quite possibly the world’s biggest-selling drug of all time – had originated in British labs, he noted how it went on to be developed by US firm Abbott Labs (later split into AbbVie), which reaped most of the profits. The loss of the European Medical Agency’s headquarters from the UK – it relocated to Amsterdam after Brexit – had also affected the UK market, he said. Such issues had increased the drift of companies wanting to list on NASDAQ – although he said the primary attraction for that move was because the US is where the money is!

The two discussed the need for the UK to become more competitive, in particular to help companies access more capital here, if they were to be tempted to stay.

The conversation also delved into the role of governments in promoting advancements in life sciences. Central government support was vital to support new drugs in the fight against AMR, he said, as he lauded the UK government’s “subscription model” for new antibiotics as a way of stimulating private investment.

He emphasised how Novo Holdings itself was making waves in this area, having established the REPAIR fund (short for Replenishing and Enabling the Pipeline for Anti-Infective Resistance). With AMR quickly becoming a silent epidemic around the world, Kutay said there was no time to lose.

In addition to bioindustrials and AMR, Kutay said Novo Holdings could not ignore the rise in chronic disease, but noted the world was still in “treatment mode” and not yet switched to “preventative mode” when it came to thinking about how to deal with them.

Novo Holdings was investing significantly in diagnostics companies, he said, explaining that over the last decade there had been a lot of innovation in the area, and that in the long term, investing in diagnostics would save lives and save healthcare systems’ money.

Despite the tough state of public markets, he said there was still a huge amount of capital and wealth available, such as from venture capital firms like Sofinnova and Medixici; the latter recently raised $400 million for its Medicxi IV fund. The partnership between Apollo, a private equity firm, and Sofinnova, also indicated private equity saw growth potential in the life science industry.

While there was still capital to deploy, Kutay said companies might now need to work harder to access it. While Novo Holdings acknowledged such challenges, he said it remained committed to advancing the companies it was supporting in fields such as life sciences and bioindustrials.

With a strong emphasis on ethics and sustainability, Kutay and his team are poised to play a pivotal role in shaping the future on a global scale.