From Biotech Chemist to Family Office to Biotech Pioneer

Interview with Sunil Shah, CEO of o2h Ventures | Co-founder @ o2h Group By Claire Jeong, Chief Conference Officer, VP of Investor Research, Asia BD, LSN

Sunil Shah

Claire Jeong

Sunil Shah is a dedicated entrepreneur with over two decades of experience in fostering early-stage biotech innovation. He has focused on building the biotech ecosystem to support fledgling biotech innovations through investment, mentoring, and network building. As Co-founder of the o2h Group and CEO of o2h Ventures, he has led initiatives like the Kickstarter competition and ChaiTime webinars, supporting global biotech startups with integrated drug discovery services and virtual networking. Sunil’s efforts have impacted over ten early-stage companies across five countries and facilitated successful fundraising for o2h Ventures portfolio companies through ChaiTime Portfolio Pitch Day to leverage o2h’s syndicate investor network.

Outside of work, he enjoys biking, running, and competing in Ironman events.

Claire Jeong (CJ): Can you please describe your history in the life science arena?

Sunil Shah (SS): I am a biochemist by training, and I have subsequently spent most of my life in the life sciences arena. Started my career in the life sciences team at PA Consulting gaining early experience working with large Pharma and eventually co-founding a discovery services business that was later sold for a significant multiple. Building on this success we started o2h Discovery to continue to support biotech companies with chemistry and biology, o2h CoWork Labs to provide the biotech companies with the space that they need to start up and o2h Ventures to provide seed capital to biotech companies helping them accelerate their growth journey. I started all these businesses along with my brother Prashant Shah.

I love working with such exciting start-ups and struggle to say ‘no’ when they need support, hence I get involved in every working aspect of a biotech company from finance, business, and strategy and when we are really desperate for science! I am currently either Chair or Non-Executive Director in over ten biotechnology companies at various stages from Preclinical to Phase II and am serving second terms on the Board of Cambridge Angels and the British Biotech Industry Association (BIA).

I am proud to have been recognized by the OBN with a ‘Special Recognition Award’; CEO of the year by the Cambridge Independent Science and Technology Awards and UKBAA Angel of the Year, all in the last five years.

CJ: Can you tell me about how you started your family office, o2h Incubator, o2h CRO, and your o2h venture fund?

SS: Well, I was quite poor after my first start-up (I had a .com and saw the boom-and-bust cycle), I was working as a part-time business development director for a biotech start-up in Cambridge, UK. This was in 2003 and the chemists at CBT were complaining about outsourcing chemistry and we thought there is a market that exists, we just need to do it better. So, we started Oxygen Healthcare in India, with 2 FTEs from Amicus Therapeutics… It was a long slog after that but that was the beginning of the journey. We had already started angel investing in the biotech sector in 2005 with Acacia being one of our first. Through the ‘lens’ of a discovery service provider we were able to speak to big pharma and find out what technologies they were interested in investing in and at the same time connect this to many of the fledgling biotech companies that we were supporting.

The angel investment turned into a Pre-Seed fund ‘o2h Ventures’ and we built our own ‘flywheel’ where we could incubate and mentor start-ups from our own incubator that we bought and developed in Cambridge, UK ‘o2h CoWork Labs’ and we had discovery support on tap as ‘o2h Discovery’ in India/UK continued to flourish. We have made pre-seed investments into 35 biotech companies, mostly over the last 5 years.

CJ: What is your venture funds investment thesis? How many startup investments have you made?  How many exits?  

SS: The UK has an amazing science base, having worked with biotech companies in the UK and USA I would say the industrial and academic talent base is equivalent, and in fact, the UK punches well above its weight bringing in over 40% of all biotech investments across Europe as geography.  Despite these facts, there is a significant and well-understood valuation gap between the UK and the USA. This is largely due to the quanta of seed capital available.

o2h Ventures has built this ‘flywheel’ to incubate and support early-stage companies, despite being a small $10M fund, we have amazing access to new science through our CRO business, o2h Discovery or many of the other organisations (Milner, Start Codon, Wellcome Trust, Cambridge Angels etc..) or Tech Transfer Offices (Cambridge, Nottingham, Oxford, Dundee, Sussex, Manchester, etc..) that we have already spun companies out from.

o2h Ventures invests from two funds, these are not normal fund structures, as they have been set up as tax efficient for UK taxpayers, under what is known as the ‘Enterprise Investment Scheme’. We have now invested in over 35 companies and already, over $400M of capital has been invested into our portfolio that we have developed. Already some of the earlier angel investments have exited such as Acacia and Privitar and now Small Pharma is the first company from our portfolio to be acquired by NYSE-listed company Cybin.

We now seek to raise a more traditional growth fund under a typical GP/LP structure to co-invest in 10-15 of our best companies.

CJ: Are you mostly UK-centric in your investments?

SS:  We think the UK represents huge value for investors given both the science and technology base that we have here. We know the UK landscape very well having grown up in the biotech sector in the UK and hence we think it makes a lot of sense to focus on UK biotech investments for our next phase.

CJ: Do you have LPs in your fund from other regions or just the UK?

SS: Our Pre-Seed funds have investors which are all HNWIs from the UK.

CJ: What is your international strategy, and how do the North American and APAC markets play in your worldview?

SS: We see the USA market as being ‘the bridge’ at a certain stage in the company’s growth; we always seek to bring in US directors onto the boards of our companies which can open the door to US growth capital and potential public market exits. The APAC region represents a massive, fast-growing market with immense potential. While we prioritize the US for now, APAC remains on our radar.

CJ: You have attended and participated in many RESI events over the years. What do you see as valuable to you?

SS: I have been attending the RESI Conference since the very early days, I can’t even remember how many but I go back several years. I always thought that it was amazing that I could meet early-stage companies and other investors who were ALL interested in early-stage biotech companies. No one at a RESI Conference is going to tell you that we don’t work with or do early stage! That’s what really appealed to me. The streams, panels and therapeutic focus areas are so tailor-made for people like me, which is why I love going to the conference and am always willing to support Dennis and his team in expanding his presence or appearing on a panel where possible.