- McKinsey & Company notes that portfolio model is growing in popularity amongst companies and investors
- HLTT recently acquired precision oncology company Varian Biopharma
- Report shows that more than $5.5 billion in capital has been raised in past six years by companies with biotech portfolio models
An emerging trend in biotechnology involves abandoning a single shot on goal approach in favor of a broader strategy with different portfolio companies under one umbrella. The old incubator approach with a new flare, the trend involves a portfolio manager utilizing a variety of skillsets to assemble a group of subsidiaries, each committed to a different specialty or drug program. It can be a de-risking methodology that simultaneously amplifies the upside of the parent company, and biotech players like Healthtech Solutions (OTC: HLTT) have pivoted to this model, primarily through its recent acquisition of Varian Biopharmaceuticals (https://ibn.fm/ZLSAj).
With the buyout of Varian Biopharma, Healthtech expanded its portfolio to three distinct healthcare subsidiaries. MediScan, Inc. has developed disruptive technology that converts 2D images from a portable ultrasound machine into 3D, high-definition images, a leap forward in imaging to improve diagnoses by providing point-of-care imaging on par with X-rays, MRIs and CT scans. The company’s RevHeart unit is advancing critical research into the treatment of COVID-related heart muscle injury.
As noted in a recent report by McKinsey & Company, the model is growing in popularity amongst companies and investors. Firms like BridgeBio Pharma (NASDAQ: BBIO) and Biohaven Pharmaceutical (NYSE: BHVN) are two blue chips operating under the central-management-with-multiple-subsidiaries structure, demonstrating the strong investor interest. All told, the report shows that more than $5.5 billion in capital has been raised in the past six years by companies with biotech portfolio models (https://ibn.fm/AUNNS).
Varian Biopharma, which will be housed as a new Healthtech Oncology, Inc. subsidiary, is a precision oncology company specializing in the development of atypical protein kinase C iota, or aPKCi, inhibitors for different tumor types. Varian Bio’s two lead candidates are still being prepared for clinical trials. VAR-101 is a topical formulation for basal cell carcinoma, the most common type of skin cancer, affecting about 4.3 million Americans each year (https://ibn.fm/jK1ta). VAR-102 is an experimental oral drug that will be tested against a battery of resilient tumors where research has shown aPCKi inhibition could be an effective pathway, including pancreatic, colorectal and non-small cell lung cancers (“NSCLC”).
A new approach in precision oncology, aPKCi inhibition innovates through regulation of transcription factors such as GLI-1 and K-RAS—proteins known to be integral in cancer pathogenesis. Varian appears to be on the leading edge, as K-RAS G12C is considered the most prevalent emerging biomarker in NSCLC (https://ibn.fm/7Brip).
Investors from small retail to institutions seem to value the new model over the traditional straight-line approach of biotech. The rewards could be great in the traditional model, but with the odds weighing in only around 5% at best that any pre-clinical biotech asset would make it to launch, the risks are equally high.
The acquisition of Varian by Healthtech plays to the strengths of the new portfolio model not only in drug pipeline but also by bringing in experts in an area that could attract additional investment. Again, that’s an appetizing part of the basket model. “The fact that [Varian Bio is] developing therapies to target difficult-to-treat cancers such as pancreatic cancer demonstrates just how innovative their team is,” said Healthtech Solutions Chairman and CEO David Rubin in a statement disclosing the acquisition. “Precision oncology is an exciting field and we’re thrilled to be a part of it,” he added.
For more information, visit the company’s website at www.MyMediScan.com.
NOTE TO INVESTORS: The latest news and updates relating to HLTT are available in the company’s newsroom at https://ibn.fm/HLTT
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