As the medical cannabis industry gains traction in Europe, we interviewed the founders of Oskare Fund.
LONDON, UK, July 29, 2022 /EINPresswire.com/ — Q1. As a professional VC, how did you envision entering this industry?
Alex: There’s a personal story behind it all. A few years ago, I was looking for information on treating my son’s epilepsy with CBD, as I noticed that many parents were using it successfully for their children in North America. Being a Canadian myself, I was well aware of what was going on in the cannabis industry there. It was then that I contacted John who is an American neurologist in Paris whom I knew very well, he is now co-founder and our chief medical officer.
John: When Alex asked me about CBD for epilepsy, it was uncharted territory for me scientifically speaking. Then I did my research and discovered the potential of the endocannabinoid system. This system is found in humans and all vertebrate species, it is used as the body’s way of creating homeostasis and adapting to stress and environmental changes. Modulation of this widely distributed regulatory system appears to have therapeutic (medical) value depending on the entity and severity of the disease.
Endocannabinoid receptors are located in areas of the brain, particularly those concerned with cognition, movement, coordination, pain, sensory perception, emotion, memory, the autonomic and endocrine system, but are also found in the gastrointestinal tract. I also discovered that there was a recent increase in publications and IP filings in the sector which showed signs that it was evolving into a more IP-rich field with a strong emphasis on innovative therapies targeting the endocannabinoid system.
Alex: As a venture capitalist, I realized that beyond “medical cannabis”, the real opportunity lies in harnessing the endocannabinoid system: targeting unmet needs, new indications, rare diseases and alternatives to current therapies in markets that exist today but are ripe for disruption. This is how we identified that there was an opportunity for a dedicated venture capital fund. Today, the Oskare fund is the only AIFMD regulated fund in Europe that meets the financing needs of start-ups operating in this field.
Q2. What types of portfolio companies are you targeting?
Alex: The ÓSKARE fund has a unique positioning that will focus on investments aimed at creating outcomes and solutions to unmet needs and unrealized opportunities in the healthcare and medical cannabis sector. We will seek to invest in companies developing novel molecules and a combination of products for specific medical conditions in humans and animals, as well as the necessary technologies and infrastructure related to realizing the opportunities presented by cannabinoids.
This pick and shovel strategy will focus on companies providing solutions to pain points in the value chain. We do not invest in production or recreational cannabis.
Our first investment is Herbolea, an Italian biotechnology company that licenses a patent-protected extraction system to processors of cannabis, hops and other commercial crops for applications in the food and fragrance industry. The system is expected to become the new market standard replacing CO2 and solvent extractions within the next 3-5 years.
Our second investment is Octarine Bio, a Danish company that is developing a unique biosynthetic platform, molecule design and enzymatic reactions, to engineer microorganisms to produce a range of natural and novel cannabinoids and molecules derived from psilocybin with improved pharmacokinetic and therapeutic properties.
We are also planning to invest soon in a digital pain clinic in the UK aiming to be an alternative in treating the symptoms of chronic pain by combining mind, movement and medicine. The platform prescribes a variety of painkillers, including medical cannabis.
Q3. In North America, private investors have been fueling the sector for some years now. What is the particularity of the European market and is there a specific investor profile in the Oskare fund?
Gaetano: The US market has been driven primarily by recreational cannabis, with investors focusing on multi-state operators and brands. With medical cannabis in the United States being federally illegal, R&D has been hampered even as it begins to catch up. In most EU countries, medical cannabis is federally legal, allowing public R&D to legally operate, obtain funding and conduct research.
As such, there has been an increase in spin-offs and start-ups since 2017. Current research is being conducted by EU-based teams providing the intellectual property to produce the global therapeutic champions of today and tomorrow. Additionally, state-run healthcare systems will pave the way for the adoption of medical cannabis.
Our investors are primarily family offices who not only see the opportunity in a high-growth market, but also consider the social benefits of new therapies on the lives and well-being of patients. Our investment thesis also attracted a pharmaceutical company.
Q4. What were the biggest challenges or arguments you had to face while fundraising?
Alex: The first was the COVID-19 pandemic, as the difficulty of traveling and meeting investors led investors to suspend capital commitments with new managers. But this is true for all Private Equity fundraising.
The second is the stigma around cannabis stemming from investors’ lack of knowledge of medical cannabis regulation and/or research.
We spend a lot of time educating and informing investors about what’s happening in the market. Think of a $5 billion untapped market that is expected to triple over the next 5 years. We are positioning ourselves as a hybrid Deeptech and Life Sciences fund targeting a new therapeutic sector.
For more information, visit www.oskarecapital.com