1. B&M: Pascal, perhaps we can start
by understanding what Levrett
does? What is your company
elevator pitch?
PH: Levrett is a publicly quoted
special purpose acquisition vehicle
which essentially provides a private
company with a fast track, low risk,
lower cost route to a public listing via
what is termed a reverse takeover.
It was established to acquire a
company, with a promising therapy
or technology in the biotech/life
science area which with additional
capital, can advance it’s IP to a
point where it becomes attractive
to institutional investors or larger
pharma and biotech companies.
Typically we are looking for a
company in the early stage through
Phase II stage of development
with the key areas of focus for us
oncology, diabetes, obesity and
mental health.
B&M: How would you describe
your company approach? What
makes the company unique or
different to similar companies
PH: A conventional IPO process is
time consuming for management
and very costly, with the company
ultimately at the mercy of the
markets regarding timing, pricing
and amount of capital raised if
any at all. We saw last year that
many companies with good science
in development were unable to
complete a public listing when
market conditions turned in the
latter half of 2015. With Levrett being
already listed we short-circuit that
process and provide much greater
certainty of outcome in terms of
the capital raise, the share price
achieved and the entry onto the
publicly quoted market.
Once a reverse takeover has
been completed the interests of
investors and founders are aligned
at all points through their equity
holdings. In our model we essentially
provide the management team
with a platform to perform and
then we get out of their way and let
them get on with advancing great
science through the various clinical
and regulatory hurdles toward
commercialisation.
I think perhaps this is one of the
key attractions of our vehicle and
consequently we are probably able
to offer founders a more flexible
and generous split of the upside
than perhaps some of your readers
will have seen on the term sheets
of private investment syndicates
etc., we can also give them more
flexibility in the composition of
their board and in short more
control over their own destiny. We
are investors not scientists and we
ACQUIRING COMPANIES WITH
REALISABLE COMMERCIAL TECH
Pascal Hughes
CEO
Levrett plc
Mr Hughes is a financi-
er, investor and entre-
preneur. He previously
worked in Investment
Banking in the City of
London for close to 20
years most recently as
a Managing Director in
Fixed Income, Currencies
and Commodities at UBS
bank. Prior to that he
was a Managing Director
in Global Banking and
Markets at HSBC. He
left UBS to become an
active private investor
and advisor to start-up
companies from financial
technologies to oil field
services.
Levrett plc is a special
purpose acquisition
company formed to
acquire realisable and/
or developed commercial
technologies focused in
the Pharmaceutical and
Biotechnology sector.
The Company draws
on its expertise in the
Pharmaceutical and
Biotechnology sector
to assess different
propositions and
initiate discussions via
market contacts and
professional advisers.
INTERVIEW
Issue 10 | 2016 | Drugs & Dealers Magazine 22

2. are clear on the boundaries of our
knowledge and expertise.
B&M: Are you able to comment on
the criteria that you look for in a
potential acquisition? What makes
a target stand out for you?
PH: There are a number of criteria
but it ultimately comes down to the
strength of the science, the quality of
the management team and the size
of the market opportunity.
Obviously the science is front
and centre. Very simply can you
convince us, and particularly our
scientific advisors, that what you
are proposing to develop ultimately
represents a meaningful difference
in the life expectancy or wellbeing
of a patient. We are not really
interested in the 4th or 5th iteration
of a given treatment, we can already
see in some areas the challenge
in reimbursement being faced by
some of these types of drugs. And
what patient need are we talking
about? – if its an area of unmet need
in a major area such as in oncology,
fibrosis, diabetes etc. then it ranks
higher for us as we know that the
regulatory and reimbursement
environment is disposed toward
a positive outcome for those who
can prove a remarkable benefit to
patients.
Secondly can you break down
that journey of scientific discovery
through to commercialization into
clearly identifiable clinical and other
milestones, so that we as investors
can establish points of clear value
inflection and attempt to put a
metric on what that looks like in
terms of a risk adjusted return,
and I use the word “attempt” very
deliberately here, as valuation is by
no means an exact science in this
industry.
Now having said all that there is
really no shortage of good science
out there and going back to the days
of Alexander Fleming where it is said
that one of the reasons the science
profession was slow to develop
penicillin was partly because he was
a notably poor communicator, and
could not attract a collaborator to
develop it further. So good science is
not good enough. Equally important
is the quality of the management
team.
In short can the management
team / founders demonstrate that
they have the skill set to take their
technology or therapy from bench
to bedside through all the clinical,
regulatory and commercial hurdles
in between.
We know from experience that
it’s a fine balance for a founder,
who is ultimately the engine of the
enterprise, to have the confidence to
drive a business forward combined
with the ability to listen and take
on board advice. Have they the
intellectual honesty to clearly identify
and quantify the risks involved, the
strength of the competition and
assess the probability of success.
Are they realistic about the time and
capital required to get them to key
clinical and value inflection points
INTERVIEW
and of course can we have a
sensible conversation around
valuation?
The commercialisation skillset
is something we also look very
closely at. We hear it repeated
time and again, talking to
seasoned investors in this
space, commercialisation skills
in particular, are one point of
difference between a typical UK
and US biotech company.
Other factors such as the ability
to attract non dilutive capital
along the journey, especially in
the early stages, are not to be
underestimated. This is also
an added layer of scientific DD
for us as the selection process,
particularly for the likes of
National Institute of Health and
other organisations is pretty
rigorous in terms of the peer
review process and what science
they choose to fund. At NIH for
example the approval rate is
around one in six so often it will
take several applications to get
this type of funding, and that all
points to the drive and ambition
of the team as well as the quality
of their clinical work. But it also
speaks to the nature of how the
business is organised and run.
Ultimately as investors we like
companies that have an iterative
bootstrapping approach, that are
resourceful in their embryonic
funding strategy through
attracting that non-dilutive
capital and/or have shown
ability to strike commercial
deals, however small, from the
earliest possible point. That
sends us a strong signal that they
understand the risks involved
in their business and are good
stewards of investor capital.
B&M: Are there specific
strategic industry sectors that
you are looking at more closely
than others?
Drugs & Dealers Magazine | Issue 10 | 201623
“Ultimately as investors we like companies
that have an iterative bootstrapping
approach, that are resourceful in their embry-
onic funding strategy through attracting that
non-dilutive capital and/or have shown ability
to strike commercial deals, however small,
from the earliest possible point.”

3. PH: We have allowed ourselves a pretty
broad remit in keeping with the fields
of expertise of our network of advisors.
In particular, we are focused on the
major areas like oncology, diabetes,
obesity and mental health.
Each have within them a need for
new therapies and technologies to
significantly improve the level of
patient treatment and well being for
those suffering from these diseases,
as well as an ever increasing patient
population due to changes in lifestyle,
diet, life expectancy etc. For example,
Type 2 diabetes in China affected 1% of
the population in 1980 whereas today
its 11% and there are unfortunately
similar statistics such as this across
many areas of chronic disease around
the world.
B&M: What is the geographic nature
of your pool of targets? Do you have
restrictions or preferences as to
where you go hunting?
PH: We have not put any geographic
restriction as we know there are good
companies looking for a London listing
both from the US and continental
Europe in hubs such as Holland.
However, that said, we have a lot of
good science right here in the UK.
B&M: As the CEO of Levrett, you’ve
previously held very prominent
positions within UBS and HSBC in
addition to being an active private
investor and start-up advisor to
companies in fintech through to
oil services. So what is it about the
Pharma and Biotech industry that
attracted your attention?
PH: Well firstly let me emphasise this
INTERVIEW
is not a solo endeavor but rather
a group of like minded investors
attracted by the high potential
returns this sector can present, while
accepting the risk that goes along
with that.
Albert Einstein once said “I have
no special talents. I am only
passionately curious” and for me
personally it was curiosity about the
remarkable advances in science we
have seen in recent times and the
potential investment opportunities
the requirement for capital to
advance that science can represent,
that ultimately brought me here.
As a former trader I’ve learned that
one area where outsize returns
are generated is through investing
around innovation, ignoring the
inevitable short term gyrations of the
market, and following the road less
travelled.
Here in the UK, perhaps because
of some legacy issues, sometimes
the focus tends to be overly
skewed toward the risks involved
and particularly the potential cliff
effects around clinical trial results
etc. This means biotech is avoided
by some otherwise very savvy
investors, or that only later stage
companies have been able to access
the public markets. But for us that’s
an opportunity not a problem, as
it means more sensible early stage
valuations and hence a better risk
adjusted upside. As an investor that’s
a good starting point.
B&M: Is there anything in
particular that is exciting you
about the Pharma and Biotech
industry right now? Or conversely
anything that concerns you?
PH: The more time I spend
immersed in this sector the more
it feels as if we are just on the edge
of tremendous scientific advances
by combining better understanding
of the molecular biology of disease
together with the application of
Issue 10 | 2016 | Drugs & Dealers Magazine 24
“I’ve learned that one area where outsize
returns are generated is through investing
around innovation, ignoring the inevitable
short term gyrations of the market, and
following the road less travelled.”

4. nano technology and information
technology and of course the
increasing willingness of investors to
back that science. Biotech is likely to
remain one of the most interesting
sector to be invested in for the
foreseeable future. I heard someone
say that while the 20th century was
the age of tech the 21st century
will be one of biotech and I would
certainly agree with that.
Obviously its not going to be a
straight line and you have to be
clear of the risks involved and the
probabilities of success at every
point of development. The recent
retracement of the rally in the sector
since 2012 is a reminder of that. I
would be concerned that there is too
much focus on short term market
sentiment rather than on where we
are at in terms of the innovation
cycle, which as people far more
qualified than me agree, is still at
a really early stage. There is much
value still to be realised.
Furthermore, not being in a bubble
type environment is a good thing in
any market. History tells us ‘bubbles’
lead to misallocation of capital, and
significant mispricing of enterprise
risk; then the hangover can be a
long one when sentiment turns.
The environment of 2016 is clearly
one of greater capital discipline and
more sensible conversations around
the risks attached to particular
opportunities which as investors we
very much welcome.
Obviously the current debate on
drug pricing will likely continue to
weigh on the sector, but ultimately
I believe it gets resolved to a point
where at least some of the risk
premium that has been priced into
the market in the past 6 months is
removed. Longer term the costs of
drug development combined with
the trends in population aging,
diet and lifestyle and the attendant
economic costs of chronic disease
that inevitably accompany those
trends, mean it is in all stakeholders’
INTERVIEW
interest to resolve and we will
need to continue to incentivise
innovators to provide solutions
for the world’s long term medical
needs.
B&M In addition to your
own experience, the Board
of Directors at Levrett has
decades of experience and
expertise. Where do you feel
you all add the greatest benefit
within Levrett?
PH: Well if we can divide it in
terms of clinical and non-clinical
expertise. On the clinical side we
are fortunate to have a network
of highly qualified scientific
advisors who can give us a
detached, informed view of the
science and an assessment of the
risks and probability of success.
On the non-clinical side, I think
we bring a very commercial
approach to doing business, we
understand just how hard it is to
bring any early stage business to
its full potential, the importance
of being adequately capitalised,
striking good commercial deals
and engaging productively with
the investor community to
ensure their long term support
and investment in the success of
an enterprise. We are committed
to minimising those risks and
obstacles and maximising the
investment opportunity by
providing a platform to enable
good science and great scientists
to fulfil their potential.
B&M: Are you able to expand
on what you have been looking
at since your IPO at the end of
2015?
PH: We have been working with
contacts across the industry both
old and new, meeting founders and
attending conferences to identify
suitable candidate companies and
understand the trends that continue
to evolve on a macro level in the
industry. We have been following
that up by doing a deep dive into the
science around given opportunities
that have attracted our interest
in order to better understand the
value proposition they represent
and the probability of success.
That is an ongoing process and I
have to say we are pleased to see
the potential that we believed in is
clearly there. Like I said earlier, there
is a lot of good science around and
it’s well documented that the UK can
clearly hold its own in terms of the
strength of its life science research
at universities and other research
facilities. The challenge is to tell that
story and continue to get investor
buy-in.
B&M: What are some of the more
immediate milestones we can
look forward to hearing about at
Levrett?
PH: When we founded Levrett,
we gave ourselves a reasonable
medium term runway in terms
of sourcing and completing an
acquisition, that was, within
eighteen months of December
last year. Obviously I am limited in
what I can say as a public company,
however we have seen and reviewed
some fantastic opportunities, so
hopefully I can bring you some news
on that sooner rather than later.
Drugs & Dealers Magazine | Issue 10 | 201625
“We are committed to minimising those
risks and obstacles and maximising the
investment opportunity by providing a
platform to enable good science and great
scientists to fulfil their potential.”
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