Ryan Lynch: Okay. So it’s primarily related to the exit markets and just the ability for these companies in the specific industries that they’re in to fund operations, but not necessarily anything going on specific with these businesses deterioration. Is that a kind of a simplified version of what we’re talking about?
Jerry Michaud: Yes, very simple. Because the fact of the matter is, when it is difficult to raise capital, it is difficult for companies to make operational decisions based on the need for additional capital that may not be there. So that does impact your ability to make, which in a good market would be pretty straightforward operational decisions. It makes it more difficult to do that. And again, that’s just not just about these two companies that’s across the Board.
Ryan Lynch: Okay. And then the other question I had was on Evelo obviously disappointing outcome with that thus far. I’m just curious as you kind of look back on that investment, I understand it’s still kind of an ongoing investment, but as a lot of the results have already taken place at this point. What lessons have you learned from that investment specifically that will inform your decisions going forward on how you invest and then kind of a second part on that, that was an investment, that was a pre revenue position in the life sciences area that was reliant on these clinical trials, the approval as well as I know you guys had a big majority supporter in that investment. But what percentage would you say of your life sciences investments are pre revenues and reliant on clinical trials?
Jerry Michaud: I don’t have those exact numbers in front of me. But to get to the kind of core of your question, whenever we underwrite a life science company, that’s a drug development company, obviously burning cash with ongoing clinical trials, what you look for is a broad based technology platform. You look for a pipeline that has not just one drug candidate addressing one indication. You look for multiple drug candidates addressing multiple indications. Those were all there when we underwrote the deal. And you also look for a strong investor base, which the company had. And I’m not – I’m just – I’m not trying to justify anything one way or the other, but historically, that’s how we have always underwritten life science drug companies.
And generally what happens is as these drug candidates move through clinical trials, the companies are able to raise more money, especially the public ones in the public market, and continue moving other drugs through the clinic. So even if one of them fails, there is still a broad pipeline, there is still numerous potential value in the assets. And to simplify this, and I really am simplifying it, the acceleration of how quickly each one of these clinical trials came to fruition, I think that was probably one of the things that we would look at. It’s not just, do you have a great pipeline, but where are those drugs in the clinical trials? Not that we didn’t look at that. Maybe that should have been a greater focus, and it certainly should have been a greater focus given what happened in the overall life science market over the last four quarters, where funding has literally dried up.
And that includes IPOs, it includes follow on equity for public companies, it includes VC investment and a lack of big pharma buying up these companies, which is usually a primary way that they end up exiting the market. So, yes, there are some things we’re certainly going to look at here. We do have other life science companies in our portfolio. They’re in drug development stages. None of them, as I said here today, they all seem to be fairly well funded going forward, other than IMV, which we’ve already focused on. So that is something we’ll look at. Right now we’re – I got to tell you, where we are laser focused on helping the company try to create as much value as they can with their underlining platform technology going forward.
And I think hopefully by the end of the fourth quarter, we might have something more to report on that. But right now it’s very early in that process. They just announced 10 days ago that the – they had – their 2939 drug for psoriasis failed and they were going to look for strategic alternatives. So we’re really early in that process.
