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SpaceX and beyond: How Olivia Steedman is leading OTPP to new frontiers of tech investing

Olivia Steedman chuckles when she thinks about the first tech investment she made for the Ontario Teachers’ Pension Plan.

Now the senior managing director of the pension’s ambitious…

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Olivia Steedman chuckles when she thinks about the first tech investment she made for the Ontario Teachers’ Pension Plan.

Now the senior managing director of the pension’s ambitious innovation investment platform, in 2017 Steedman was still part of the team that had built Teachers’ into a major force in infrastructure. The field was getting crowded, though, as others had caught on to the value in the asset class, causing return compression and forcing them to adjust their strategy.

“What we decided to do was to take on earlier stage infrastructure risk, kind of like when you’re in equities and you go to venture, you just move a little bit earlier, which for infrastructure meant taking on construction risk and development risk,” Steedman recalled in a recent interview.

In early 2018, they invested in Stem Inc., an artificial intelligence-powered energy storage company based in Silicon Valley and backed by investors including the venture capital arms of General Electric and French energy giant Total SA.

“To be honest, looking back on it, I was initially so focused on the infrastructure element — the project finance piece — the interesting venture-growth element only sank in later,” Steedman said.

Still, it whet her appetite for a repeat of the early days of pushing the established pension plan into new areas like they had done with infrastructure. So, when a decision was made to create a new specialized department within the pension giant devoted to investing in later-stage companies using technology to disrupt incumbents and create new sectors, she threw her hat in the ring.

“Quite similar to our initial conversations around infrastructure, we realized the opportunity around direct investing in venture tech companies is a whole new world, a whole new way to get return. And we should be doing more of that,” she recalled.

“I was so excited about this idea, I put my hand up and said I can build this for you. I helped build infrastructure, (and) no I don’t have tons of venture tech experience, but I know the organization and I know how to build a team and together we’ll build something great here.”

These days, it’s impossible to miss the venture-growth aspect of Steedman’s investments. The Teachers’ Innovation Platform, known as TIP, made an immediate splash after launching in April 2019 with Steedman at the helm, choosing Elon Musk’s Space Exploration Technologies Inc. as its first investment. That financing round reportedly raised more than US$300 million for SpaceX (Teachers’ stake was not disclosed) and valued Musk’s company at more than US$33 billion, but it also signalled something important about TIP: Its goal was to be big and bold and put Teachers’ on the map when it came to late stage-venture companies looking for a serious partner.

It’s a bold course to bring a massive pension fund into the next frontier of investing. But it’s not entirely uncharted. A few decades ago, it was unusual to see a pension fund investing in real estate, yet pensions including Teachers’ are now among the largest players in the sector. Infrastructure investing, too, was in a nascent stage when Steedman joined the investment group in 2002. With an $880 million portfolio, it represented just one per cent of Teachers’ total portfolio. By 2019, it had ballooned to nearly $17 billion and represented eight per cent of the pension fund’s assets.

Already, TIP has $3.5 billion in investments and posted a 16.3 per cent return in 2020.

“It’s been such as amazing ride,” said Steedman , a civil engineer and chartered accountant by training who got into investing after working in project finance at a large accounting firm, and landed a job at Teachers’ in 2002 as an assistant portfolio manager.

Steedman sums up the common theme among companies in the TIP portfolio this way: they are taking a shot at “solving a profound problem or delivering an unmet need,” she said. It is that investment philosophy that drew her group to SpaceX.

 This image courtesy of NASA, shows a SpaceX Falcon 9 rocket, carrying the Crew-2 mission astronauts, lifting off from the Kennedy Space Center in Florida on April 23, 2021.

Within six weeks of meeting with SpaceX officials, the investment was a go — before the full TIP team was even in place.

“It’s how we need to operate in this new space,” Steedman said, adding that it was immediately clear to the TIP team that the investment “could be the perfect emblem of what we want to do and where we want to play.”

The headline-worthy investment may be a calling card of sorts for Teachers’, but they were attracted to more than just the plans to ferry ordinary citizens on commercial flights into outer space.

SpaceX’s telecommunications satellite launch business was an equal draw, and the combination illustrates a key plank of the TIP investment strategy, Steedman said.

The pension fund is looking to invest in companies that have a platform or anchor business that can support the development of riskier “disruptive” technology and services.

“What was perhaps interesting to SpaceX was that … they know we’re a long-term investor, we follow on (with subsequent investments) in companies,” Steedman said.

“Where we have conviction around something we’re going to be there to support the company.”

Since that initial investment, Steedman has built a team of close to 20 people who work in three TIP offices: Hong Kong, London and Toronto.

Last October, Kelvin Yu, a private equity and venture veteran of Sequoia Capital, Fosun Group and Partners Group, was hired to lead the team in Asia.

Then in January, Rick Prostko, a veteran Silicon Valley venture capitalist who worked at Comcast Ventures and was an early investor in grocery delivery app Instacart Inc., was hired to build a presence in San Francisco and head up TIP’s direct investing business in North America.

Before joining the Canadian pension firm, Prostko had made an investment in Calgary-based Attabotics Inc., a 3D robotics warehouse and supply chain company that caught the attention of Steedman last year. In August, TIP led a US$50 million series C financing round for the company whose logistics, Steedman said, were inspired by an ant colony.

“(It’s) vertical, with robots travelling up, down and around in three dimensions to pick up the goods and deliver them to humans on the edge,” she said. “All of a sudden you can fit really dense large-scale warehouses into a much smaller footprint and therefore you can put them in places closer to the customers.”

 Jakob Moore of Attabotics Inc. organizes robot canisters in Calgary. Logistics for the 3D robotics warehouse and supply chain company were inspired by an ant colony.

Teachers’ hasn’t disclosed a target for the ultimate size of its disruptive tech platform, which accounted for around two per cent of the pension fund’s $221.2 billion in net assets at the end of 2020. In the short term, according to an advertisement for a managing director in London, TIP aims to deploy up to $2 billion each year in markets around the globe, with about three-quarters of that capital destined for direct investments and the rest invested through funds.

Steedman’s goal is to have Teachers’ be the first call when companies that fit the profile are looking for funding and an ongoing relationship. To do this, she is leaning heavily on the pension fund’s reputation as long-term investor with global expertise and connections.

So far, TIP’s investments have come from a mix of referrals and knocking on doors. Steedman said a “funds book” of earlier stage financings that Teachers’ tucked into TIP is part of the pipeline of referrals — providing access both to companies to invest in and potential investment partners among Silicon Valley’s leading venture capital firms. Company founders are also starting to spread the word.

“It’s a whole cocktail of different sources. The vision, and we’ll get there, is to be a known brand in this ecosystem,” she said.

“What we’re trying to do is build our relationships, not just with the founders, but other players in the ecosystem, and in many cases we are partnering with them as well.”

When it comes to targets, TIP’s team is thinking globally, making investments in Asia, Europe and North America.

“What we’re focused on is later stage venture. There may be one or two exceptions but generally you’re not going to see us investing in brand new companies,” Steedman said. “We like to see revenues, we like to see a certain kind of scaling happening before we come in, so typically we’ll invest at the Series B and beyond stages.”

The platform’s  “target cheque size” for initial investments is between $25 million to $250 million.

Among its early investments, TIP led the series B financing for Kry, a Sweden-based healthcare company that matches doctors to patients. Already growing when the COVID-19 pandemic hit, the company doubled its customer count and expanded to more than 30 countries, with TIP participating in another round of funding.

Last November, TIP led the series C financing for Pony.ai, an autonomous vehicle company whose earlier investors included Toyota and Sequoia Capital. It obtained licences and permits in California and Beijing, and its competitors include Waymo, established under Google’s parent Alphabet, and China’s Alibaba.

“The reality is, we’re two years into this journey and I think we’ve had a lovely debut,” she said. “But we need to continue to build our brand and have us be top of mind for founders. I think that will come, we can see it coming already, (but) until we are the first name that pops into their head, we need to focus on how we can help these companies scale and grow.”

As happened with infrastructure a few years ago, the tech sector has heated up, leading to some lofty valuations, which can make the investment game tougher.

“On the one hand, the valuation and what’s happened with businesses … have been great but you need to be very careful and very disciplined, Steedman said. “If we see something that’s beyond our risk appetite, we’ll walk away.”

She acknowledged that such choices aren’t always easy — or obvious.

The current environment, she said, is a time to be “super selective” and to come to the table with “well-researched views” on different sectors and situations, something that is a common philosophy across the Teachers’ pension plan. While every investment at TIP is made with a view to making money, there is also a recognition that there will be losers.

“That sort of goes with the territory with earlier stage investing. You are taking more risk so you should expect more bumps in the road and some losses,” Steedman said.

“We do every single deal with an expectation that it’s going to be a very successful outcome but we’re prepared for that.”

She is also focused on finding ways for TIP to participate in upside without overspending by playing up commitments other than cash.

“We see this quite bit with some of our founders … it’s not just money and valuation that they’re looking for. They’re watching the markets as well and they’re seeing things pop and maybe get a bit peaky, and you know, generally speaking they want someone in their cap table who’s going to help them scale and navigate highs as well as possible lows,” she said.

“They want people who are going to be there for the long term and help them deliver on their own ambitions. And that’s what we offer when we’re speaking with founders. We’re here for the long term and we’ll follow on as your business grows and things go well, we’ll be here for you.”

• Email: bshecter@postmedia.com | Twitter:

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AstraZeneca antibody cocktail fails to prevent Covid-19 symptoms in large trial

AstraZeneca said a late-stage trial failed to provide evidence that the company’s Covid-19 antibody therapy protected people who had contact with an infected person from the disease, a small setback in its efforts to find alternatives to vaccines.

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Astra antibody cocktail fails to prevent COVID-19 symptoms in large trial

(Reuters; )

June 15 (Reuters) – AstraZeneca (AZN.L) said on Tuesday a late-stage trial failed to provide evidence that its COVID-19 antibody therapy protected people who had contact with an infected person from the disease, a small setback in its efforts to find alternatives to vaccines.

The study assessed whether the therapy, a cocktail of two types of antibodies, could prevent adults who had been exposed to the virus in the past eight days from developing COVID-19 symptoms.

The therapy, AZD7442, was 33% effective in reducing the risk of people developing symptoms compared with a placebo, but that result was not statistically significant — meaning it might have been due to chance and not the therapy.

The Phase III study, which has not been peer reviewed, included 1,121 participants in the United Kingdom and the United States. The vast majority, though not all, were free of the virus at the start of the trial.

Results for a subset of participants who were not infected to begin with was more encouraging but the primary analysis rested on results from all participants.

FILE PHOTO: A computer image created by Nexu Science Communication together with Trinity College in Dublin, shows a model structurally representative of a betacoronavirus which is the type of virus linked to COVID-19, better known as the coronavirus linked to the Wuhan outbreak, shared with Reuters on February 18, 2020. NEXU Science Communication/via REUTERS

“While this trial did not meet the primary endpoint against symptomatic illness, we are encouraged by the protection seen in the PCR negative participants following treatment with AZD7442,” AstraZeneca Executive Vice President Mene Pangalos said in a statement.

The company is banking on further studies to revive the product’s fortunes. Five more trials are ongoing, testing the antibody cocktail as treatment or in prevention.

The next one will likely be from a larger trial testing the product in people with a weakened immune system due to cancer or an organ transplant, who may not benefit from a vaccine.

TARGETED ALTERNATIVES

AZD7442 belongs to a class of drugs called monoclonal antibodies which mimic natural antibodies produced by the body to fight off infections.

Similar therapies developed by rivals Regeneron (REGN.O) and Eli Lilly (LLY.N) have been approved by U.S. regulators for treating unhospitalised COVID patients.

European regulators have also authorised Regeneron’s therapy and are reviewing those developed by partners GlaxoSmithKline (GSK.L) and Vir Biotechnology (VIR.O) as well as by Lilly and Celltrion (068270.KS).

Regeneron is also seeking U.S. authorisation for its therapy as a preventative treatment.

But the AstraZeneca results are a small blow for the drug industry as it tries to find more targeted alternatives to COVID-19 inoculations, particularly for people who may not be able to get vaccinated or those who may have an inadequate response to inoculations.

The Anglo-Swedish drugmaker, which has faced a rollercoaster of challenges with the rollout of its COVID-19 vaccine, is also developing new treatments and repurposing existing drugs to fight the virus.

AstraZeneca also said on Tuesday it was in talks with the U.S. government on “next steps” regarding a $205 million deal to supply up to 500,000 doses of AZD7442. Swiss manufacturer Lonza (LONN.S) was contracted to produce AZD7442.

Shares in the company were largely unchanged on the London Stock Exchange.

The full results will be submitted for publication in a peer-reviewed medical journal, the company said.

Reporting by Vishwadha Chander in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

 

Reuters source:

https://www.reuters.com/business/healthcare-pharmaceuticals/astrazeneca-says-its-antibody-treatment-failed-in-preventing-covid-19-exposed-2021-06-15

 

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Former FDA Head Takes on Exec Role at Flagship’s Preemptive Health Initiative

Stephen Hahn, the Commissioner of the U.S. Food and Drug Administration under former President Donald Trump, took on a new role as chief medical officer of a new health security initiative launched by Flagship Pioneering, a life sciences venture firm…

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Former FDA Head Takes on Exec Role at Flagship’s Preemptive Health Initiative

 

Stephen Hahn, the Commissioner of the U.S. Food and Drug Administration (FDA) under former President Donald Trump, has taken on a new role as chief medical officer of a new health security initiative launched by Flagship Pioneering, a life sciences venture firm that incubates and curates biopharma companies.

First announced Monday, Flagship’s Preemptive Medicine and Health Security initiative aimed at developing products that can help people before they get sick. This division will focus on infectious disease threats and pursue bold treatments for existing diseases, including cancer, obesity, and neurodegeneration. 

In a brief statement, Hahn, who served as commissioner from December 2019 until January 2021, said the importance of investing in innovation and preemptive medications has never been more apparent. 

“In my career I have been a doctor and a researcher foremost and it is an honor to join Flagship Pioneering in its efforts to prioritize innovation, particularly in its Preemptive Medicine and Health Security Initiative. The more we can embrace a “what if …” approach the better we can support and protect the health and well-being of people here in the U.S. and around the world,” Hahn said in a statement. 

During his time at the FDA, Hahn was at the forefront of the government’s effort to battle the COVID-19 pandemic. His office oversaw the regulatory authorization of antivirals, antibody therapeutics and vaccines, as well as diagnostics and other tools to battle the novel coronavirus. 

Kevin Dietsch-Pool/Getty Images

Hahn bore the brunt of verbal barbs aimed at the FDA by the former president for not rushing to authorize a vaccine for COVID-19 ahead of the November 2020 election. The second vaccine authorized by the FDA for COVID-19 was developed by Moderna, a Flagship company. 

Prior to his confirmation as FDA Commissioner, Hahn, a well-respected oncologist, served as chief medical executive of the vaunted The University of Texas MD Anderson Cancer Center. Hahn was named deputy president and chief operating officer in 2017. In that role, he was responsible for the day-to-day operations of the cancer center, which includes managing more than 21,000 employees and a $5.2 billion operating budget. He was promoted to that position two years after joining MD Anderson as division head, department chair and professor of Radiation Oncology. Prior to MD Anderson, Hahn served as head of the radiation oncology department at the University of Pennsylvania’s Perelman School of Medicine.

Flagship Founder and Chief Executive Officer Noubar Afeyan said the COVID-19 pandemic that shut down economies and caused the deaths of more than 3.8 million people across the world was an important reminder that health security is a top global priority. In addition, the ongoing pandemic brings into “stark focus” the importance of preemptive medications. 

Hahn, who helmed the FDA for three years and before that served as chief medical executive at The University of Texas MD Anderson Cancer Center, has extensive experience overseeing clinical and administrative programs. Afeyan said the new division would benefit from Hahn’s experience as FDA Commissioner and help steer the Preemptive Medicine and Health Security initiative as it explores Flagship’s “growing number of explorations and companies in this emerging field.”

It is not unusual for former FDA heads to take prominent roles with companies. For example, former FDA Commissioner Scott Gottlieb, Trump’s first FDA Commissioner, took a position on the Pfizer Board of Directors weeks after departing his government role. He has also taken positions on other boards since then, including Aetion, FasterCures and Illumina.

 

BioSpace source:

https://www.biospace.com/article/former-fda-head-stephen-hahn-takes-cmo-role-at-flagship-pioneering-preemptive-health-initiative-

 

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Facebook CEO Mark Zuckerberg hosts first test of Live Audio Rooms in US

In April, Facebook announced a slew of new audio products, including its Clubhouse clone, called Live Audio Rooms, which will be available across both Facebook and Messenger. Since May, Facebook has been publicly testing the audio rooms feature in Taiwan.

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In April, Facebook announced a slew of new audio products, including its Clubhouse clone, called Live Audio Rooms, which will be available across both Facebook and Messenger. Since May, Facebook has been publicly testing the audio rooms feature in Taiwan with public figures, but today the company hosted its first public test of Live Audio Rooms in the U.S. The event itself was hosted by Facebook CEO Mark Zuckerberg, who chatted with fellow execs and creators.

Joining Zuckerberg were Facebook VP and Head of Facebook Reality Labs Andrew “Boz” Bosworth, Head of Facebook App Fidji Simo and three Facebook Gaming creators, including StoneMountain64, QueenEliminator and TheFierceDivaQueen.

Image Credits: Facebook screenshot

The creators used their time in the Audio Room to talk more about their gaming journeys on Facebook, what kind of games they were streaming and other gaming-related matters. Zuckerberg also briefly teased new gaming features, including a new type of post, coming soon, called “Looking for Players.” This post type will help creators find others in the community to play games with while they’re streaming.

In addition, badges that are earned from livestreams will now carry over to fan groups, Zuckerberg said, adding that it was a highly requested feature by creators and fans alike.

Fan groups will also now become available to all partnered creators on Facebook Gaming, starting today, and will roll out to others in the coming weeks.

Image Credits: Facebook screenshot

The experience of using the Live Audio Room is very much like what you’d expect on another platform, like Clubhouse or Twitter Spaces. The event’s hosts appear in rounded profile icons at the top of the screen, while the listeners appear in the bottom half of the screen, as smaller icons. In between is a section that includes people followed by the speakers.

The active speaker is indicated with a glowing ring in shades of Facebook blue, purple and pink. If verified, a blue check appears next to their name.

Listeners can “Like” or otherwise react to the content as it streams live using the “Thumbs Up” button at the bottom of the screen. And they can choose to share the Audio Room either in a Facebook post, in a Group, with a friend directly or through other apps.

Image Credits: Facebook screenshot

A toggle switch under the room’s three-dot “more” menu lets you turn on or off auto-generated captions, for accessibility. From here, you can also report users or any issues or bugs you encountered.

The Live Audio Room today did not offer any option for raising your hand or joining the speakers on stage — it was more of a “few-to-many” broadcast experience.

Before today, TechCrunch received a couple of tips from users who reported seeing the Audio Rooms option appear for them in the Facebook app. However, the company told us it had only tested Live Audio Rooms in the U.S. with employees.

During the test period, Live Audio Rooms are only available on iOS and Android, we’re told.

Zuckerberg also used today’s event to talk more broadly about Facebook’s plans for the creator economy going forward.

“I think a good vision for the future is one where a lot more people get to do creative work and work that they enjoy, and fewer people have to do work that they just find a chore. And, in order to do that, a lot of what we need to do is basically build out a bunch of these different monetization tools,” explained Zuckerberg. “Not all creators are going to have the same business model. So having the ability to basically use a lot of different tools like Fiji [Simo] was talking about — for some people it might be, Stars or ad revenue share or subscriptions or selling things or different kinds of things like that — that will be important and part of making this all add up.”

He noted also that the tools Facebook is building go beyond gaming, saying that Facebook intends to support journalists, writers and others — likely a reference to the company’s upcoming Substack clone, Bulletin, expected to launch later this month.

Zuckerberg additionally spoke about how the company won’t immediately take a cut of the revenue generated from creators’ content.

“Having this period where we’re not taking a cut and more people can get into these kinds of roles, I think is going to be a good thing to do — especially given how hard hit a lot of parts of the economy have been with COVID and the pandemic,” he said.

More realistically, of course, Facebook’s decision to not take an immediate cut of some creator revenue is a decision it’s making in order to help attract more creators to its service, in the face of so much competition across the industry.

Clubhouse, for example, is currently wooing creators with a payments feature, where creators keep 100% of their revenue. And it’s funding some creators’ shows. Twitter, meanwhile, is tying its audio product Spaces to its broader set of creator tools, which now include newsletters, tips and, soon, a subscription platform dubbed Super Follow.

Zuckerberg didn’t say during today’s event when Live Audio Rooms would be available to the public, but said the experience would roll out to “a lot more people soon.”

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