After running separate funds for nearly two decades, Jacob Gottlieb and Stuart Weisbrod are back under one roof. These two titans of healthcare investing know each other well through their previous work together at Merlin BioMed Group, and they are now sharing offices with a future collaboration in the works.
Weisbrod co-founded Merlin in 1998 as an investment management company focused on the healthcare sector with portfolios in the biotechnology, pharmaceutical, medical device, and healthcare service sectors. Weisbrod has had a successful track record in healthcare and biotechnology investment including positions with Oracle Partners, Harpel Partners, Merrill Lynch, and Prudential-Bache Securities. Weisbrod also has an impressive academic track record earning a PhD in Biochemistry from Princeton University in 1980, an MBA in Finance from Columbia University in 1986, and a BA in Chemistry from Colgate University in 1975.
Weisbrod’s professional background provided him with the necessary expertise and network to build a winning team. That team included Jacob Gottlieb, who worked for Weisbrod as a portfolio manager in 2000. While Gottlieb was at Merlin at the height of the biotechnology revolution and helped Merlin achieve returns of over one hundred percent in 1999 and 2000. Gottlieb and other portfolio managers were successful in generating large returns and this helped them land prominent clients including major pension funds, endowments, family offices, and high net worth individuals. Despite years of success, Merlin returned funds to investors and closed its doors in 2007.
Since winding up Merlin, Weisbrod has gone on to create a new investment firm called Iguana Healthcare Partners. The investment strategy behind Iguana is similar to Merlin in that it focuses heavily on public companies in the healthcare industry. This includes pharmaceutical, biotechnology, medical device, diagnostic, healthcare service, and healthcare information technology companies. The inspiration behind the Iguana name comes from the ability of the reptiles to evolve and thrive in changing environments throughout the world and over the millennium.
Similar to Weisbrod, Gottlieb went on to create his own firm after leaving Merlin. After years of work and success in the financial sector, Gottlieb founded Visium Asset Management with $300 million in initial capital that quickly grew to 2.5 Billion in 2008. After surviving the financial crisis in 2008, Gottlieb grew Visium to an $8 billion hedge fund with almost 200 employees and officesin New York, San Francisco, and London.
Despite over a decade of success, Visium’s business came to a sudden end in 2016 when three executives were accused of insider trading and mismarking. The discovery was the result of evidence brought forward by Visium employee and whistleblower, Jason Thorell. Thorell spent more than two years gathering evidence for the FBI and the SEC which triggered an investigation into Visium’s holdings and resulted in the charges brought against the hedge fund former employees.
The very public destruction of the once $8 billion firm has gone on for more than two years as the SEC continued its investigation. Most recently, new charges were brought against Visium’s former CFO as well as the company itself. Visium has not admitted or denied the charges but has agreed to pay nearly $10 million dollars in fines and disgorgement. Gottlieb himself has never been charged and has been cleared of any legal wrongdoing associated with the Visium insider trading scandal. Maintaining his role as CEO, Gottlieb has continued his work at Visium to return funds to investors and wind down the company.
With Weisbrod and Gottlieb, former colleagues and highly successful financial entrepreneurs, working from the same office, the industry is sure to see some exciting changes and great things for healthcare investment opportunities.
As he continues to wind down Visium, Gottlieb is already deep into his next venture, Altium Capital. Like Visium, Altium is also a hedge fund and it’s a fresh start for Gottlieb who has been carefully considering his next move post-Visium.
With Gottlieb’s history of success in health-care investments, it’s no surprise that Altium’s first investment was a 5.61% stake Oramed Pharmaceuticals Inc. Altium took part in a registered direct offering earlier this month with several other healthcare-focused institutional investors. Founded in 2006, Oramed’s proprietary technology has transformed the way that medical treatments can be administered. Oramed’s flagship product is an oral insulin capsule that replaces the need to inject insulin. Until now, this type of delivery has not been possible due to the inability of ingested insulin to remain viable.
Oramed’s innovation has the ability to change the lives of millions of people living with diabetes and those undergoing protein-based medical therapies. The benefits of oral delivery extend far beyond patient comfort and include reduced infection rates and treatment costs. Although Oramed is still working towards FDA approval in the US, the Chinese market has already been very supportive of the Jerusalem-based company. China-based Wuzhou Zhongheng Group invested $52 million for a 10% stake in 2015 and Oramed has since out-licensed its oral insulin capsule to Hefei Tianhui Incubator of Technologies. The $50 million deal includes China, Hong Kong, and Macau.
While Oramed has yet to receive US FDA approval, the advances it is making are encouraging. Oramed’s insulin capsule has gained international attention and the technology’s potential to disrupt the injectable pharmaceuticals field is promising. With the company in the late stages of US FDA clinical trials, Gottlieb made a strategic decision to invest in Oramed due to its potential to revolutionize the pharmaceutical industry.