Carole Nuechterlein - Roche

Roche HQ

Carole Nuechterlein
Company: Roche
Title: Head of Roche Venture Fund

As chief of the Roche Venture fund since its inception in 2002, Carole Nuechterlein has helped define the entire category of corporate biopharma venture investment. Under her direction, the fund has grown into a CHF 500 million ($512 million) evergreen fund--and returned cash to the Swiss pharma in the process.

She parlayed her work as an attorney in biotech and pharma--focused on M&A, research collaborations and licensing deals--into the Roche job, which began as a business development spot, and then evolved further.

“When I joined Roche, it wasn’t formally the Roche Venture Fund,” Nuechterlein said in an interview. “It was a movement into a business development function, doing investment and M&A. Then we became more successful at doing venture.”

Nuechterlein’s first experience with Roche came when it acquired a pharma she was working for, Syntex, for $5.4 billion in 1994. She remained at Roche for about three years after the deal, and then she struck back out into a position as general counsel with startup SangStat. She kept in touch with Roche, however, and that startup experience eventually gave her an edge when she wanted to rejoin the company.

“Roche wanted to hire someone who knows what it’s like to have no money. We were raising money all the time at SangStat, it was very different than Roche,” Nuechterlein said.

After the fund made some good bets--but didn’t have a very large stake in them--Nuechterlein started pushing to take on larger positions. “We were investors in Pharmasset, but we didn’t have that much of the company,” she said, referring to the hepatitis C-focused company that Gilead Sciences bought for $11 billion in 2012.

“So we started to take larger positions to make more money; Alios, for example, was a very nice exit. Success breeds increased interest.” Another HCV-focused company, Alios, sold to Johnson & Johnson for $1.75 billion in 2014.

When Nuechterlein first took the reins of the fund, she was invited to a number of introductory and exploratory meetings within Roche. All of the requests came from men--and she advises women to pursue more of these sorts of informal networking opportunities, which may not come easily.

“When I first started at Roche, people would set up these meetings to ask me what I did. It was always men—my advice to women is to reach out,” she said. “A friend of mine wanted to move out of research, so she scheduled lunches with people all over the company.

“Women need to do that more--it is key to figuring out what you are doing in your career.”

Nuechterlein notes that her fund’s role as a corporate investor has evolved and strengthened, as has that of comparable groups elsewhere in biopharma. The fund not only takes larger positions, but also will co-lead a financing, and its partners serve on startup boards in a full voting capacity, not simply with an observer’s seat. Personal dynamics--including gendered ones--can play a role in the boardroom.

“Life is too short not to invest with people you like,” she said. “The syndicate is key. There are a number of venture funds with no women or maybe just one or two in junior positions. Sometimes it’s just an accident, but at other firms maybe there’s less respect for women. … I do think there are a lot more women around the table now in terms of investing.”

She recently joined the board of microbiome company Second Genome, along with Elaine Jones, who is the executive director of Pfizer Venture Investments, and Jill Carroll, Principal of SR One, who joined with the Series B close a few months later. The startup now has 3 out of 8 board seats held by women, an unusual feat in biotech.

Nuechterlein also serves on the board of public gene therapy company AveXis; it’s unusual for VCs to remain on boards after an IPO, but AveXis asked her to stay. She also serves on the boards of neurodegeneration player Lysosomal Therapeutics and high-profile, anti-CD47 antibody company Tioma. She’s a board observer for consumer genomics company 23andMe and inflammatory antibody player Allakos.

Meanwhile, she’s intent on remaining focused on financial returns, rather than strategic ones that she sees as “too ephemeral.” Her fund’s remit is to offer a high risk/high return supplement to Roche’s largely conservative asset management policies, which focus on instruments such as money market accounts, CDs and bonds.

Her fund takes a largely opportunistic approach--with an eye toward good valuations, she said. It’s done several investments in rare disease startups and is actively buying into cancer immunotherapy. Nuechterlein is also interested to see how emerging research in the microbiome and CRISPR gene editing will continue to play out.

During her tenure at the fund, the emergence of gene therapy and inexpensive genomic sequencing have been the most definitive advances, she said--and she expects them to continue to pay off in the future.

“Gene therapy has been around for a long time, but now it’s really real. It’s one of the biggest advances, I think, and we’ll be seeing a lot more,” said Nuechterlein. “The second thing is sequencing--the way the cost of sequencing has come down. That will impact medical treatments in the future and our understanding of how people respond to drugs.”

Carole Nuechterlein - Roche