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10 November 2017Americas

LSIPR 50 2017: Carl Gordon—Realising great ideas

One of the challenges facing healthcare venture capital firms is the pressure concerning drug pricing.

“We need companies to be able to charge a reasonable amount of money for the drugs because, if they can’t, we can’t make returns,” says Carl Gordon, founding partner and co-head of global private equity at OrbiMed.

“It’s easy to criticise pharmaceutical companies for charging a lot for their drugs, so that’s one issue we have to deal with,” he adds.

OrbiMed deals with pricing pressure by investing in companies which are developing innovative drugs. According to Gordon, companies which bring such drugs to market are less likely to face pressure.

Another challenge facing healthcare venture capital firms is realising great ideas.

“The biggest challenge is to try to participate in programmes that will realise the promises, because although there are many ideas in the medical field for new research, many of the ideas don’t work out,” says Gordon.

According to Gordon, OrbiMed works with great teams and people to come up with “penetrating scientific ideas” which generate successful investments.

The New York-based venture capital fund manages around $15 billion worth of public and private company investments.

Before joining OrbiMed, Gordon was a senior biotechnology analyst at Mehta and Isaly, an investment management company.

He was a fellow at The Rockefeller University and was included on the Forbes ‘Midas List’ of top venture capital investors in 2014.

Gordon presided over the acquisition of Acerta Pharma, which was sold to AstraZeneca; Seragon Pharmaceuticals, which was bought by Roche; and that of Aragon Pharmaceuticals, which was sold to Johnson & Johnson.

According to Gordon, those three acquired companies are all developing new drugs for cancer and have strengthened the pharmaceutical industry in the area of cancer medication.

"although there are many ideas in the medical field for new research, many of the ideas don’t work out.”

Besides such successful deals, Gordon says his biggest achievements are investing in many companies which are advancing science.

“Some of my biggest achievements would be being one of the people at OrbiMed who have helped build up the firm to become a leading venture capital enterprise and generating important returns for our investors and the partners who have supported us over the years.

“I’ve always been interested in science and investment. Being at OrbiMed allows me to do both of those.

“It’s an exciting job because you get to be at the leading edge of research and also support some great people to do some great research.”

Advising future newcomers to the field of healthcare venture capital, Gordon explains it is important to be equipped with the right background, adding that starting work for a Wall Street firm as a researcher or banking analyst could be advantageous.

“There are a lot of ways to break into the field,” he says.

“If you have a scientific or medical background, it can give you some understanding of what the companies are doing, but it’s not essential.”