The Medical Excellence Capital, LLC (MEC) Team entered our second year of operation with a strong plan and commitment to building on the momentum and achievements of our inaugural year. We are delighted that the MEC Team completed its first complete calendar year together. We can attest that the combination of top-level intellect, integrity, shared values, and commitment demonstrated every day by this team is a joy to experience. And while it is delightful to report this at the human level, it is equally true that colleagues who share values and care for one another generally perform at the highest levels. We get the business of the fund done, while having at least one laugh at every Partner’s meeting.

The Sophomore year in college (it’s been a while for most of us!) can either be a sophomore slump year or a year of increasing confidence, strength, and stability. It is also a time to test assumptions such as major (Thesis) and future career direction (Portfolio Composition). There was certainly a parallel for the MEC team last year. The unusually severe “down cycle” experienced by the life sciences industry indeed tested our investment beliefs, and unquestionably had a bearing on MEC portfolio investment decisions. Overall, the life science industry was in a slump all year. However, for MEC it was a year of strength and stability. Navigating one of the worst biotech investment markets in decades provided great clarity in terms of investment philosophy and operating principles. Meanwhile, leaning into the tough external environment, the team grew closer and worked more fluidly together to face the challenges. And the operating intimacy extended to most of our portfolio companies as well. A spirit of “we are in it together” prevailed. This spirit can only make us stronger and more effective going forward. Bottom line: Our platform and operations became more refined, our MEC Council blossomed, and our portfolio grew as measured by the important metrics of the number of companies, value, job creation, and product/program advancements.

The life sciences industry prospects for 2023 remain unclear. Will the downturn last another year? Are the “green shoots” real and enduring, or will an industry frost curb the growth? Frankly, we do not know. It is not possible to opine with any certainty. Rather, we will focus our energies and brain power on the true fundamentals that matter. This means: Find the absolute best science; Build great management teams; Provide timely capital and partner with other smart, resourced investors; and fully support the portfolio companies with our network, relationships, and operating expertise. As we mentioned before, there will be ups and downs. But over the long term, sticking to the fundamentals and really executing well on them will win over the long term.

 

In Conclusion

As a Team, we look back on 2022 as a seminal year of growth and development. We found new and exciting companies to fund. We strengthened and positioned our 2021 investments for the next phase of their growth. We built up our operating capabilities with key additions on both the SAB and MEC Council. We tested our investment thesis and portfolio balance in light of current market realities, and in light of the inevitable rebound. We founded and organized an innovative charitable foundation. We added new capabilities to safeguard MEC’s commitment to a best practice operating and financial reporting platform.

Our team reflects often upon how privileged we feel to participate in the life sciences industry. We spend a good portion of our lives working in our chosen profession. It is not difficult at all to find meaning in the work we do, and at so many levels – Building new companies and generating high-value jobs creates good. Partnering with great scientists and managers to invent new medicines and alleviate patient suffering creates good. Successful investing and recycling of the proceeds to fund social services and new investment in innovation creates good. We are grateful to our Limited Partners for providing the fuel that allows us to participate in this wonderful industry.

Our team looks to 2023 with great anticipation. A big part of our enthusiasm comes from working with truly great people in an industry that matters. Sincere thanks to:

• The Medical Excellence Capital Limited Partners
• Our portfolio company partners, their management teams, and board members
• The members of the MEC Scientific Advisory Board
• The members of the MEC Council
• MEC investment syndicate partners
• Our Academic Medical Center and Research Institution partners
• The MEC vendors for professional services supporting our best practices
• The Medical Excellence Group for support throughout the year

 

We remain at your service.

John Prufeta, Eric Heil, Brian Halak, Kim Kamdar, Joni Mancini, Kevin Emesiani. John P. Hornbostel, Olga Prufeta (Gouroudeva), and Annabel