Whilst uncertainty in public markets is rife and recessions loom globally as well as high venture capital valuations, Oskare Capital is in the fortunate position of deploying into high functioning, well insulated companies with attractive valuations, that are uniquely situated to weather market volatility before capitalizing on reinvigorated exit opportunities as the global economy re-stabilizes.
Óskare Capital has launched the first ever AIFMD regulated Venture Capital fund with an investment focus on innovative companies and teams in Europe working on novel therapeutics (cannabinoids and other molecules) that target the Endocannabinoid System as well as the ‘picks and shovels’ of the associated ecosystem of services and products that support this fast-growing global market.
THE ENDOCANNABINOID SYSTEM
Discovered in 1992, the Endocannabinoid System (ECS) is found in humans and all vertebrate species. It is used as the body’s way to create homeostasis in the body and adapt to environmental stress and change, similar to the central nervous system.
The ECS’ therapeutic potential has not been fully utilized and can treat a host of unmet needs by using plant based and/or synthetic molecules. Key targets for medicines in the space include but are by no means limited to cancer, cognitive disorders, cardiovascular disorders and pain.
Europe is at the forefront of developing these medications and the ecosystem that enables these medications to be brought to market and reach the patients and customers. The European market now has a significant need for early-stage capital to cement the foundations of the new sector and support its rapid growth rate.
In light of this, Oskare Capital launched the first regulated fund to help foster this extremely exciting new sector and capitalize on the wealth of opportunity.
The team, like so many others, have been affected either directly or indirectly by conditions that could have been treated, or better treated by modulation of the ECS. This is a core driver for many of the team’s entry into the sector, which is supported by a number of investors who have come to the sector for the same reasons, as well as for the opportunity of significant wealth creation.
The Oskare team consists of seasoned VCs, sector CEOs, medical doctors and PhDs as well as experienced financial sector executives, the full team can be viewed here: https://oskarecapital.com/team/.
Oskare has also developed a strategic partnership with a leading contract research organization and a multinational pharmaceutical company, Syneos Health.
With the aim of providing investors with the greatest level of protection, the team have brought in a number of acclaimed fund partners, including Crossroad Capital Manager, Evershed Sutherland on legal, KPMG as the fund auditors and APEX, one of the largest fund administrators in the world.
The fund is an Irish domiciled ICAV, advised by a Paris and UK based team.
North America has grabbed a lot of headlines in recent years due to their being first movers in the recreational cannabis markets. However, Europe has taken a very different approach, fostering the development of a medical and pharmaceutical market first through clear and thorough regulations. The best exits in the sector (billion-dollar acquisitions) have been in companies that developed pharmaceutical grade medication.
This has been aided by the fact that medical cannabis has been legal (although underutilized) throughout most of Europe over the past decade. This enabled research teams to access the vital funding that their US counterparts have lacked. As a result, the world leading and comparatively cost-effective R&D teams and infrastructure across Europe (including UK) have been able to generate a wealth of research and IP that is now ready to be commercialized and applied globally.
In contrast, US companies are attempting to navigate restrictive and ever-changing regulatory environments, whilst government backing and favorable regulations in Europe have given these medical and pharmaceutical cannabis teams a significant advantage.
In addition to this, the fact that most of Europe employs state run healthcare systems has encouraged government backed research projects and state funding of medications targeting the endocannabinoid system.
As such, IP filings in the sector to date have been primarily European with the largest set of companies developing novel products with global scope being based in Europe and Israel. This is attested by the largest exit in the sector, UK based GW who were acquired for 7.2 billion USD by Jazz Pharma in 2021.
Our fund goes beyond medical cannabis but targets our body’s endocannabinoid system.
The birth of the medical cannabis sector started with production, primarily in North America, shortly followed by a maturation into recreational and retail markets in the same geographies.
Many North American producers integrated retail brands and there was a significant amount of retail investor hype around the sector, causing rapid valuation rises.
Subsequently, retail investor sentiment waned and with institutional investors still largely unable to participate in the sector, valuations crashed late in 2019 and the first movers have struggled to recapture early valuations in an overcrowded and under sophisticated market.
In the midst of this market turmoil, Europe made good use of the lessons learnt at the North American market’s expense, setting up a clear regulatory framework for a medical market first, before ever attempting to tackle the recreational sector. For example, the UN removed cannabis from Schedule IV in the 1961 Single Convention, the EU court decision stating CBD is not a narcotic, and many European countries have dedicated governmental agencies for medical and pharmaceutical cannabis.
Now the Oskare team is capitalizing on the sensible valuations, strong IP and excellent teams that proliferate the European market. The team’s first investment was in Octarine Bio, a synthetic biotechnology platform company that has proprietary glycosylation and other functionalization technologies, creating more efficacious and patentable cannabinoid molecules. Oskare expects the company to significantly disrupt the market for cannabinoid and psychedelic molecules in pharma and consumer spaces.
The team has also recently invested in Herbolea, an Italian company that develops novel biotech processing technologies to manufacture unique, high-quality products from high therapeutic potential botanicals such as cannabinoids to hops and more. The technology is patented, cheaper and produces a better-quality product, paving the way for market domination.
Oskare Capital has launched the only regulated fund in the sector that benefits from an incredibly high volume of deal flow and minimal competition in the market. Institutional investors are still largely prohibited from investing in the sector due to outdated “vice” clauses that lump medical and pharmaceutical cannabis in with the recreational market. This means that Oskare Capital is able to cherry pick the best companies in the market whilst being able to set reasonable valuations to ensure the best possible returns.
The key differentiator for Oskare is that we target the endocannabinoid system, not just the plant. This increases the value of the total addressable market to c. $400 bn and comprises oncology, pain and CNS disorders.
The team has a very hands-on approach, taking Board seats in portfolio companies and actively monitoring progress whilst helping out with various business functions. The fund’s network and advisors are also a huge asset to portfolio companies, comprising some of the foremost names in the sector, as well as key players in adjacent sectors into which many portfolio companies intend to exit.
The team has deep roots in the European VC and CVC ecosystem (including UK and Israel) and has an established network to source and syndicate deals. Thanks to the team’s research, network, scouting and experience, the fund has identified and invested in a number of unique deals before they have appeared on the radar of other market participants.
Alex Ouimet-Storrs, co-founder of Oskare Capital, comments:
“Now that the sector is developing in Europe there is a need for a professional VC team to fuel, foster and maximize the value creation. We have a hands-on approach; we not only inject capital but also provide business insight and introductions to potential investment partners and collaboration opportunities with industry experts and other startups in the ecosystem”.
Oskare Capital is taking additional commitments for its flagship fund as it continues to deploy into the sector with two existing portfolio companies and in 4 new targets in the short term.
Company Name: Prysma London
Contact Person: Tod Marsh