Anterra Capital: Now is the Right Time to Invest in Animal Health

October 25, 2018

Several key trends have aligned to make the animal health and welfare sector a truly attractive prospect, according to venture capital investor Anterra Capital.

 Speaking at the World Agri-Tech Innovation Summit in London, Maarten Goossens – co-founder and principal at the transatlantic firm – highlighted genomics, digital technology and advanced nutrition as some of the stand-out areas driving animal health into the next generation.

“Animal breeding holds a lot of potential but will it follow a similar trend as plant genetics?” Mr Goossens asked. He highlighted the growth experienced by the leading plant genetics company (Monsanto) with the possibilities that lie ahead for the top firm in the animal genetics area – Genus.

“If you look at the way Monsanto grew – in the 2000s the adoption of GM in crops resulted in quite an interesting increase in its share price and market capitalization,” he explained.

“Genus has been growing steadily but is still very small compared to Monsanto. We estimate the overall market for genetics in animals is about $5 billion globally.

“Interestingly, Genus has doubled in market capitalization over the last two years due to two significant events. One was its partnership with Caribou Biosciences to start using genome engineering for healthier pigs and then, in 2017, we saw the introduction of the first genetically-engineered salmon in the North American market.”

After around 18 years on the London Stock Exchange, Genus experienced its highest stock valuation in July. Shares in the UK-based firm grew to 2,992p each. Genus currently has a market capitalization of over £1.4 billion ($1.8 billion).

The firm’s deal with Caribou in 2016 gave it a worldwide, exclusive license to a CRISPR-Cas9 gene editing technology platform in certain livestock species.

Positive signs

Mr Goossens stated: “Now is the right time to invest in the animal health biotech space. We have seen advancements in genome engineering. The cost of human genome sequencing was millions of dollars per genome. These days, it is less than $1,000. The space is heating up and not just from a research standpoint.

“In human pharma we’ve seen small biotech companies out-innovating their larger peers. In the 1980s, 80% of all new pharmaceuticals were introduced by Big Pharma and 20% by start-ups. Today, it’s the other way around.

“There have been significant advancements in the field of digital technology led by an increase in computing power and a decrease in sensor cost, enabling a truly connected world. With that we see industries being changed.”

According to Mr Goossens, the five key areas of innovation in animal health are:

  • Targeted gene editing;

  • Novel feed additives with advanced functionality, including ones focused on environmental concerns;

  • Biologics;

  • Next-generation probiotics fuelled by a better understanding of the microbiome; and

  • Digital technology – enhancement of the connected farm.

More investors circling animal health

Mr Goossens said animal health will soon see more investors taking notice of the opportunities it holds.

He told conference delegates: “It is interesting to see how traditional human biotech investors are starting to invest in the ag- and food-tech space.

“With the right education, it won’t be long until they jump into animal health as well. With large caps now listed like Zoetis and Elanco, there is a lot of buzz. We expect more investors to come to animal health.”

He also said the advent of digital technology in animal health will help bring corporate investors such as Microsoft or IBM to the sector too.

Earlier this year, Anterra signposted its growing interest in the animal health sector with two significant industry-focused appointments.