Xconomy National — Arch Venture Partners co-founder and managing director Bob Nelsen is widely regarded as one of the most astute and successful life science investors and company builders in the game. The list of his portfolio company wins (if you think of raising money, going public, or being acquired as a win, which he doesn’t necessarily, read on) is impressive. In December, Denali Therapeutics raised about $250 million in 2017’s biggest biotech IPO. This January, Juno Therapeutics was acquired by Celgene at a valuation of some $10.97 billion—Juno had gone public in 2014 and Celgene paid $9 billion beyond the large stake it had already purchased. One of the most talked about new companies of 2017 was Vir Biotechnology, headed by former Biogen CEO George Scangos, which has already raised more than $500 million and done a wave of acquisitions. Nelsen is listed as a co-founder of Denali and Vir.
And that’s just a very short, recent list. Nelsen’s successes, using the conventional definition, were enough to vault him to number 5 on the 2018 Forbes Midas List of top investors; he ranked 16th in both the previous two years.
An array of subjects around biotech
Based most of his career in Seattle, Nelsen moved in September 2016 to San Francisco. I caught up with him recently at a restaurant in his new home city, where we covered an array of subjects. Among them: his overall investment philosophy of thinking long term and not viewing IPOs as exits; how killing bad drug candidates should be celebrated; the convergence of gene therapy and gene editing; the rise of A.I. and machine learning in biotech; and his view that Big Pharma “should be very afraid” of what’s ahead, including the possibility that “insurance companies might become the pharmaceutical companies.”
Along the way, Nelsen shared the story of Arch turning down an investment in Theranos. (Here is just one of many recent stories on the spectacular flameout of the blood testing company.) And he declared that given the state of innovation in pharma these days, they should fire the CEO and board of any pharma that buys another pharma. “Fire ‘em all, that day. March them out of the office.”