This ESG and Impact Report (the “Report”) has been prepared and published by SV Health Managers LLP (“SVHM”). SVHM is a Limited Liability Partnership, established under the laws of England and Wales, and is authorised and regulated by the Financial Conduct Authority. SVHM acts as an Alternative Investment Manager for four venture funds, and also provides advice to its affiliate SV Health Investors LLC in respect of a number of further funds.
This Report does not constitute an offer by SVHM to enter into any contract/agreement nor is it a solicitation to buy, sell, hold or subscribe for any investment. Nothing in this document should be deemed to constitute the provision of financial, investment, legal, tax or other professional advice in any way. This Report is not intended to be an advertisement or promotional material of any kind with respect to this audience. This Report is meant to provide existing investors with an update. As such, it may include different information than if it had been prepared to comport with the amended version of Rule
The contents of this Report are based upon sources of information believed to be reliable. However, save to the extent required by applicable law or regulations, no guarantee, warranty or representation (express of implied) is given as to its accuracy or completeness and SVHM, its members, officers and employees do not accept any liability or responsibility in respect of the information, or any views expressed herein. Holdings are subject to change and should not be construed as research or investment advice. Similarly, any reference to a specific company does not constitute a recommendation to buy, sell, hold or subscribe in any company or its securities. Unless otherwise stated, the source of the information included is
All views expressed in this Report are current as of the date of this document and may be subject to change. The market analysis, estimates and similar information, including all statements of opinion and/or belief, contained herein are subject to inherent uncertainties and qualifications and are based on a number of assumptions. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information contained herein, and nothing shall be relied upon as a promise or representation as to the
This Report is provided for information purposes and reference only and is not intended to be, and must not be, taken as the basis for an investment decision. By acceptance hereof, you agree that (i) the information contained herein may not be used, reproduced or distributed to others, in whole or in part, for any other purpose without the prior written consent of SVHM; and (ii) you will only use the information contained in this Report for informational purposes and will not trade in securities on the basis of any such information.
The case studies used herein have been chosen by SVHM for discussion purposes only and to help provide examples for this Report. They do not purport to provide either a representation of performance of all investments made by SVHM, its affiliate SV Health Managers, LLC or of the fund to which they relate. These are chosen to provide examples to the recipient of a demonstration of sustainability as well as a demonstration of companies that have performed well, providing strong returns and should not be relied upon as a proxy
Past performance information in this Report should not be relied upon as an indication of future investment results. There can be no assurance that investments made will achieve comparable results and may instead experience net losses. The performance information shown herein may be reflective of favourable market conditions for all or some of the investments represented and there can be no assurances that similar market conditions will prevail in the future.
All results of investment information contained herein are for informational purposes only and should not be construed as a guarantee of actual or future performance results.
SV HEALTH INVESTORS
SV PORTFOLIO ADDRESSES MAJOR UNMET MEDICAL NEEDS 1 ~130 investments in biotech companies1 30 years since founding 6 novel first-in-class approvals >30 programmes in the clinic 26 novel drug approvals >35 diseases currently being targeted
SV INVESTMENTS RESULT IN PATIENT IMPACT
1Data as at 31st December 2023
CONTENTS
ABOUT SV HEALTH INVESTORS
SV’s IMPACT ON THE EVOLUTION OF TREATMENTS FOR BLINDNESS
MEASURING IMPACT AND ESG: Impact
SV PORTFOLIO IMPACT AND ESG PERFORMANCE 2023: Impact
MEASURING IMPACT AND ESG: ESG Case Study: Dementia Discovery Fund history
SV PORTFOLIO IMPACT AND ESG PERFORMANCE 2023: ESG
Next steps
Appendix
SV’s Impact and ESG evolution timeline
SV seeks innovative breakthroughs with the power to change therapeutic paradigms
At SV, we invest in biotech companies developing innovative therapeutics based on novel science to address critical unmet medical needs. These companies have the potential to change the practice of medicine and deliver a meaningful positive impact to patients whilst generating attractive returns for our investors.
We have been doing this for over 30 years. SV therefore has an extensive track record of building high value, successful biotech companies with the potential to take transformational new medicines from discovery to market.
As a leading life sciences investor with $2.0bn under management, we are aware of our potential impact and therefore seek to ensure our portfolio companies adopt good ESG practices and are good corporate citizens.
SV’s ESG-focussed activities are carried out with the intention of enabling our portfolio companies to meet their full potential and therefore drive the best chance of delivering meaningful therapeutics to patients and returns for investors.
For the past three decades, we have recognised the importance of ESG, particularly good governance and social management in our portfolio companies. This is often via a board seat which provides us with a valuable vantage point to support our companies.
More recently, SV has introduced a specialised framework to track the progress of our portfolio companies against key value driving governance and social metrics as well as environmental metrics. We are thrilled to report on the ongoing progress made by our portfolio against these.
This report provides a snapshot of the potential impact we seek to deliver. We are extremely proud to be supporting the progression of our companies and delighted to share this update with you.
Kate Bingham Managing Partner
Nikola Trbovic Managing Partner
ON BEHALF OF THE SV THERAPEUTICS TEAM
ABOUT SV HEALTH INVESTORS
SV is a proven healthcare fund manager with a >30year track record of investing in tomorrow’s healthcare breakthroughs.
With $2.0bn2 in assets under management and a truly transatlantic presence, SV is a global leader in life sciences investing.
SV INVESTMENTS INHERENTLY DELIVER IMPACT
Investing in companies developing innovative therapeutics
SV’s investment target is to develop life changing therapeutics
Address major unmet medical needs across the full spectrum of disease
Deliver meaningful positive impact to patients, their families and society
The SV Therapeutics team invests in biotech companies developing novel precision medicine drugs to address major unmet medical needs, whilst targeting attractive investor returns.
At SV, the goal is to maximise the potential impact delivered to patients. Dedicated teams of investment professionals and Venture Partners who have deep and wide spanning drug development expertise, provide hands on support to portfolio companies to help maximise success and therefore impact.
Since 1993, SV has created, invested in and built ~130 biotech companies. At the end of December 2023, the SV Therapeutics portfolio consisted of 31 companies developing therapeutics for a wide range of diseases at varying stages of drug development.
2Assets under management as at 31st December 2023
SV currently manages four therapeutics funds; two biotech funds, the SV7 Impact Medicine Fund (IMF) and SV Biotech Crossover Opportunities Fund (BCOF), which invest across the full spectrum of therapeutic indications as well as the SV Dementia Discovery Funds (DDF-1 and DDF-2), which are focused exclusively on companies developing novel therapeutics for dementias and other neurodegenerative diseases.
ACTIVE THERAPEUTICS PORTFOLIO COMPANIES
Biotech Funds
Dementia Discovery Funds
CASE STUDY 1:
SV has played a critical role in revolutionising AMD treatment
Age-related Macular Degeneration (AMD) and Diabetic Macular Oedema (DME) are two of the leading causes of blindness in the West affecting >200m and >18m global patients respectively.
Treatment of these diseases has been revolutionised in the last couple of decades with the introduction of vascular endothelial growth factor (VEGF) neutralising agents which replaced destructive treatments, such as laser photocoagulation and photodynamic treatment.
SV played a pivotal role in the introduction of these therapies having backed David Guyer who led the development of the first anti-VEGF in his role as CEO of EyeTech. SV then backed David a second time as CEO of Ophthotech.
An unmet need remains as only ~40% of AMD and DME patients respond to original anti-VEGF therapies. SV went on to create EyeBio alongside David Guyer and his team to address this need.
• Unmet need: only 23-25% patients respond to photodynamic therapy and a high recurrence rate
• David Guyer as CEO
• Returns of 7x gross multiple and 63% gross IRR
• Unmet need: no treatment options for dry AMD
• David Guyer as CEO
• Returns of 7x gross multiple and 42% gross IRR
• Acquired by Astellas for ~$5.9bn in 2023
• Unmet need: ~40% response rate to existing anti-VEGFs
• Developing Restoret, anti-VEGF with novel mechanism of action
• David Guyer as CEO
• Acquired by Merck for up to $3bn in 2023
• Returns of 13x gross multiple and 264% gross IRR (upfront payment and risk adjusted milestones)*
*EyeBio returns as at 30th September 2024
MEASURING IMPACT AND ESG
Impact
To SV, the size of the unmet medical need a company seeks to address is a key indicator of the impact a biotech company may have and is a key area of focus in its due diligence process.
INDICATORS OF UNMET NEED
SV uses the factors above to assess the size of the unmet medical need, weighted accordingly.
One of SV’s newest portfolio companies, BioAge is developing an oral weight loss drug to be used in combination with GLP1s. The obesity patient population is huge and there is a large disease burden. Whilst there are treatments available to patients currently, these are only in injectable form and incur significant side effects. BioAge is developing a therapeutic that will be in oral form and seeks to address a number of the current side effects, including the loss of lean muscle mass as part of the overall weight loss. This has the potential not only to improve patient access and compliance but also deliver optimal patient outcomes.
As a comparison, Prilenia is developing a therapeutic targeting Huntington’s disease. Whilst the Huntington’s patient population is smaller than that of obesity, there are currently no approved disease-modifying therapeutics and there is a large disease burden
CASE STUDY 2:
Addressing a major unmet with the potential to change the treatment paradigm for Huntington's and ALS patients
• Prilenia is a clinical-stage biotech company focused on the urgent mission of developing novel therapeutics to slow the progression of neurodegenerative diseases.
• SV joined the Company’s Series B financing in 2022 having recognised the major unmet need Prilenia is seeking to address by developing Pridopidine. Pridopidine represented the only Huntington's disease drug in Phase 3 clinical trials. SV has supported its ongoing progress via a seat on the Board.
• Huntington’s is one of the most devastating neurodegenerative disorders, affecting 80k patients in the US / EU alone. It is usually diagnosed between the ages of 30 and 50 and progresses slowly over 15 to 20 years. There are currently no approved treatments able to affect disease progression – the standard of care is poorly tolerated symptomatic drugs.
• Pridopidine is also being developed to treat amyotrophic lateral sclerosis (ALS). ALS is a rare, chronic, progressive neurodegenerative disease affecting 20k patients in the US alone with an average life span from diagnosis of only 2-5 years.
• Pridopidine could change the treatment paradigm for Huntington's and ALS patients and therefore has the potential to have a major patient impact.
• As at mid-2024, Pridopidine is in registration phase in Huntingtons and Prilenia is preparing to commence a global Phase 3 study in ALS.
3.3 combat communicable diseases
3.4 reduce mortality from non-communicable diseases
SV portfolio companies are collectively developing therapeutics:
• Targeting ~ 30 diseases
• Spanning the full spectrum of drug development from early-stage discovery through to late-stage clinical development with ~40 programmes in clinical trials
Therapeutic areas by invested capital
Respiratory
Cardiovascular
Oncology
Neurodegeneration
Ophthalmology
Immunology
Immuno-oncology
3 Unless otherwise stated, data is collated from 31 Therapeutics portfolio companies as at 31st December 2023
SV’S PORTFOLIO IS PROGRESSING LIFE CHANGING THERAPEUTICS
17 clinical-stage companies in the current SV portfolio
>$600m
12 new clinical trials started in 2023
raised by the portfolio in 2023 in financing rounds
>$250m total upfront payments ~30 diseases targeted across the full portfolio
6 pharma partnerships entered into in 2023
26 new therapeutics approved from SV portfolio companies
SV’S HISTORY
6 novel first-in-class approvals
>$16.5bn in peak sales
MEASURING IMPACT AND ESG
ESG
In 2023, SV co-spearheaded the Knowledge Project, an initiative involving the leaders in the European life sciences VC community seeking to create a single coordinated ESG data collection tool which allows for the specialist nature of life sciences / biotech investing, something that standard ESG tools currently available in the market do not.
SV recognises that it is not alone in requesting ESG-related data which the firm believes to be relevant and material to the growth and success of its portfolio companies. The aim of the Project is to minimise the potential burden caused by multiple distinct responses from other VC syndicate partners.
The data collection tool is a single bank of questions which focuses on the ESG metrics most relevant to innovative biotech companies. Participating VC firms are required to limit the metrics they collect ESG data against to those included in the tool only.
SV has included questions which are most relevant for its portfolio in the SV Portfolio Impact Management Questionnaire (SV PIMQ) which SV portfolio companies complete on an annual basis.
As well as looking at the SV Therapeutics portfolio as a whole, SV segments the results based on company maturity. This enables SV to track ESG progress across different development stages of its portfolio.
SV portfolio companies are provided with a scorecard mapping their annual performance against other SV portfolio companies of a similar size. These are designed to highlight areas of outperformance as well as a number of key objectives.
SV is keen to remain a resource to its portfolio companies as they progress their ESG efforts.
CASE STUDY 3: Dementia Discovery Fund history
Having been conceived at the G7 summit by the UK Government, DDF was established in 2015 as the first fund focused on discovering and developing novel disease-modifying therapeutics for dementia.
The Fund was established to address the global health crisis posed by dementia, a disease affecting millions of people worldwide4:
~50m ~80m ~150m
PEOPLE TODAY PEOPLE BY 2030 PEOPLE BY 2050
More specifically, DDF was set up to invest in companies exploring novel biological insights with the aim of translating them into disease modifying drugs and therefore to expand the breadth of targets and mechanisms targeted.
SV was awarded the DDF mandate following a competitive process and successfully raised DDF-1 (£250m), supported by both strategic and financial investors globally. DDF builds on SV’s extensive track record of building and supporting innovative biotech companies developing novel therapeutics.
With >$500m raised in total capital commitments across DDF-1 and -2, the team continues to drive scientific advancements with:
>40
PROGRAMMES TARGETING DEMENTIA
Across the 19 active and exited DDF portfolio companies.
9
NEW DEMENTIA DRUGS IN THE CLINIC
4A World Health Organisation – 2023 Global status report on the public health response to dementia; Source: SV Health Managers LLP, as of June 2024
13
ACTIVE CLINICAL TRIALS FOR DEMENTIA DRUGS
5Unless otherwise stated, data is collated from 31 Therapeutics portfolio companies as at 31st December 2023
CONTRIBUTION TO INNOVATION
SV’s investment enhances scientific research, encourages innovation and substantially increases the number of research and development (R&D) jobs.
Collectively, SV portfolio companies throughout 2023:
• Employed >1400 people with many of these jobs being highly skilled, R&D roles
• SV created companies employed >750 jobs
• Raised >$600m in additional financing
ENVIRONMENTAL MEASURES
12.2 sustainable & efficient natural resource use
12.4 environmentally sound management of chemicals & wastes
12.5 encourage companies to adopt sustainable practices
Given the early stage and relative size of the companies within SV’s portfolio, SV places a lesser emphasis on environmental metrics in comparison to social and governance metrics in recognition of the contribution these metrics are likely to have on the success of its portfolio.
SV does however believe that the process of collecting data helps improve awareness of the environmental initiatives that should be adopted as companies grow.
When comparing early stage companies within SV’s portfolio to the more developed ones, a correlation is seen between the size of the company and the adoption of environmentally focussed initiatives. For example, >90% of companies with >50 full time employees (FTEs) reported on the environmental initiatives in place in 2023 whereas only 25% of companies with <10 FTEs reported this data.
of companies with
provided scope 1 emission
EXAMPLES OF SV PORTFOLIO COMPANY
INITIATIVES
“Have set 10% reduction in emissions from 2022 baseline.”
“Board-level oversight of climate related issues.”
“Achieved Green level certification of MyGreenLab initiative, the highest level of lab sustainability certification.”
“Identified improvements to energy consumption onsite through the use of equipment timers, sleep modes and auto-power down functionality on scientific equipment.”
“Planting trees in protected UK woodland equivalent to a % of our annual GHG emissions.”
“Electrical supply now comes from 100% renewable sources.”
“Reviewing alternative waste disposal options for aqueous cell culture waste to reduce quantities sent to the incinerator.”
“We have a 'Green Team' that meets regularly and looks for ways of reducing waste and increasing recycling volumes. This has led to changes in the laboratory consumables we purchase for 'greener items’.”
“Changed one of our UK energy suppliers, which employs a carbon offsetting/credit mechanism.”
“Replacement of chemicals to those with a lower environmental impact.”
of companies with >50 FTEs reported on their environmental initiatives in 2023
7
Diversity, equity and inclusion (DEI) is an area that SV places great emphasis on. As a female-led firm, SV recognises the value of different voices and perspectives to drive better decision making.
SV is therefore committed to building a diverse team and champions diversity in its portfolio companies, often via a Board seat. SV Therapeutics
team diversity statistics
Female representation across full SV portfolio
SV tracks whether companies have >30% female representation at both the management and the board level. This is based on McKinsey research which found that companies with >30% female representation at the executive level were more likely to outperform those with <30%9
Female representation across the portfolio increased in 2023 compared to 2022. The percentage of companies with >30% female representation in their management teams and boards increased by 50% and 34% respectively.
8Unless otherwise stated, data is collated from 31 Therapeutics portfolio companies as at 31st December 2023
9McKinsey & Co Diversity Wins: How inclusion matters 2020
Gender pay gap
The average gender pay gap across the SV portfolio as well as the number of companies reporting this data improved in 2023 from 2022.
15% is down from 19% in 2022 and broadly in line with the UK national average of 14%10 There is however still room for improvement. SV is conscious of this value being easily skewed in smaller companies without equal female representation in management positions given it includes all employees.
SV PORTFOLIO IMPACT AND ESG PERFORMANCE 202311
GOVERNANCE MEASURES
SV deems governance-related factors to be amongst the most meaningful ESG factors driving the success of its portfolio companies.
SV are hands-on investors, often taking a board seat and always fostering a close working relationship with management teams. This provides valuable vantage points to assess closely the governance of portfolio companies.
Companies are asked to report against a number of governance-related metrics including the policies they have in place.
YEAR ON YEAR CHANGE SEEN IN % COMPANIES POLICY ADOPTION
11Unless otherwise stated, data is collated from 31 Therapeutics portfolio companies as at 31st December 2023
37% average increase of key policy adoption across the SV portfolio from 2022 to 2023
CASE STUDY 4: A highly innovative company seeded by SV
Bicycle is a highly innovative company developing novel classes of drugs initially targeting oncology indications.
By using bicyclic peptides, the therapeutics Bicycle is developing combine the advantages of biologics and small molecules. Their unique structure can deliver high precision to specific targets, while their size and surface area means they can potentially engage targets that have historically been undruggable.
Key properties of a bicyclic peptide:
Short Peptides consisting of 9-20 amino acids
Chemically synthesised
Fully synthetic New Chemical Entities
Ability to multimerize together or conjugate to a range of payloads
Low molecular weight delivering rapid tissue penetration and tuneable PK
Large molecular footprint allowing protein-protein interactions to be targeted
Scalable and controllable manufacturing using established methodologies
SV seeded Bicycle backing Nobel Prize winner Sir Greg Winter who founded the Company. Kate Bingham joined the Company’s board and provided ongoing support through multiple value creating milestones and ultimately through a successful IPO on NASDAQ.
Today, Bicycle is a transatlantic company providing employment for >250 people. The Company’s CEO, Kevin Lee also serves on the board of SV-created Alchemab Therapeutics.
NEXT STEPS
SV is delighted to have presented 2023's Impact and ESG report. SV endeavours to remain current with developments in these fields in terms of both regulation and trends. SV will therefore continue to evaluate its approach to supporting its portfolio companies effectively, collecting relevant data and reporting on it as first steps in making progress towards advancing impact and ESG . SV looks forward to reporting on developments in next year’s report.
UN Sustainable Development Goals
The UN SDGs are a collection of 17 interlinked objectives designed to serve as a “shared blueprint for peace and prosperity for people and the planet, now and into the future”. Underlying each of the objectives are key targets which contribute to the achievement of the goals and provide greater clarity.
A common theme across funds which measure their impact is their alignment to a subset of the SDGs and there are multiple impact measurement standards in existence which include metrics designed to measure any given investment’s contribution to these goals.
SV’s Impact and ESG evolution timeline
1993
Kate Bingham, SV Managing Partner joins as a founding member of the SV team
Schroder Ventures launches first dedicated life sciences venture fund focusing on high-impact investments in innovative healthcare companies
1996
1st Therapeutics exit
Shire developed Reminyl to treat Alzheimer’s disease, a disease predicted to affect 12.7m patients by 2050
1994
1994
SV Fund I $99.4m biotech + device + healthcare services investments
SV Fund I $99.4m: biotech + device + healthcare services investments
1st SV Therapeutics investment
GelTex developed Renvela (licensed 2009), treating patients with chronic kidney disease
7x gross multiple & 109% gross IRR
2001
1st SV drug approval
Reminyl developed by Shire, for the symptomatic treatment of cognitive decline in mild to moderate Alzheimer’s disease
Mike Ross joins SV from Genentech (their 10th employee), promoted to Managing Partner in 2002
1998
10th Therapeutics investment
Allos Therapeutics developed Folotyn (licensed 2009), first drug approved as treatment for relapsed / refractory peripheral T-cell lymphoma
2004
1st new drug category approval
Macugen developed by EyeTech, first VEGF inhibitor to treat back of the eye diseases
7x gross multiple & 63% gross IRR
2007
50th Therapeutics investment
EUSA developed Erwinase for the treatment of acute lymphoblastic leukaemia (ALL), a rare cancer disproportionately affecting young people
2009
10th SV drug approval
Renvela developed by Geltex, for the treatment of chronic kidney disease
7x gross multiple & 109% gross IRR
2011
25th successful Therapeutics exit
Rempex Therapeutics developing antibiotics for treatment resistant infections
4x gross multiple & 66% gross IRR
2015
5th new drug category approval
Blincyto developed by Micromet, first bispecific T-cell engager (BiTE) antibody for the treatment of specific subset of ALL patients
2015
2018
100th Therapeutics investment
TRex Bio, focused on modulating T-regulatory cells to address immune-mediated diseases
DDF-1 final close £250m
World’s first fund focused on discovering and developing novel disease-modifying therapeutics for dementia
2020
20th drug approval
Qinlock developed by Deciphera, for the treatment of gastrointestinal tumours and other solid tumours driven by a specific kinase mechanism
SV7 IMF final close $265m
2022
SV BCOF final close $268m
BVCA’s excellence in ESG awards
SV receives Special Recognition
2024
Launch of Knowledge
ESG Life Sciences Project, Co-spearheaded by SV, aiming for a harmonised ESG reporting framework
1st DDF-1 investment
Alector, developing antibody-based diseasemodifying drugs for neurodegenerative diseases
4x gross multiple & 33% gross IRR*
2019
10th DDF-1 investment
Therini Bio, targeting fibrin to treat chronic inflammatory disorders
2021
120th Therapeutics investment
EyeBio, backing serial entrepreneur David Guyer, developing therapeutics treating back of the eye diseases
SV becomes a signatory to the Investing in Women Code
2023
SV 30th anniversary
Therapeutics platform reaches >$1.5bn in capital commitments across the active therapeutics funds
1st DDF-2 investment
Violet Therapeutics, a company identifying cell-cell interaction mechanisms with initial drug discovery programmes focused on CNS
