Dr. Leen Kawas Presents Biotech Industry Updates and Discusses Propel Bio Partners’ Investment Criteria

Leen Kawas
7 min readJun 3, 2023


United States biotechnology companies are currently engaged in an industry-wide regeneration. In February 2023, RBC Capital Markets presented an intensive biotech industry market analysis that addressed the factors behind the sector’s recent slowdowns. In the analysts’ view, “expanded numbers of unproven early-stage recent IPO names” had led to regulatory and clinical trial difficulties.

Beginning in mid-2022, the biotech industry began to turn around. Biotech-focused venture capital firms, such as Dr. Leen Kawas’ Propel Bio Partners, continue to recognize quality candidates.

Equally importantly, the biotech industry’s commercial results continue to be strong. These encouraging outcomes demonstrate that the sector is relatively unaffected by inflationary pressures and recession worries.

Biotechnology Industry Trend Predictions

From this perspective, the RBC Capital Markets analysts issued predictions on positive and negative trends likely to shape the biotech industry through June 2023. Economic conditions and industry developments combine to produce challenges and opportunities.

Three favorable trends are predicted to drive the biotech industry forward. Biotech innovation is at the forefront of these activities. Mergers and acquisitions, along with a favorable regulatory environment, are additional factors.

Continued Biotech Innovations

Biotechnology innovations continue at a rapid pace. Companies have shifted their areas of focus, with large therapeutics showing increased promise. Protein degradation, gene editing, and gene therapy are among the newer modalities receiving attention.

Optimism About Mergers and Acquisitions

The RBC Capital Markets analysts foresee a somewhat favorable mergers and acquisitions (or M&A) environment. Large pharmaceutical firms have plenty of financial resources, which could lead to increased M&A activity involving smaller and mid-sized biotech companies.

More mergers and acquisitions could also enhance larger biotech firms’ performance. Finally, all biotech companies could potentially see improved stock prices resulting from higher numbers of M&A transactions.

More Favorable Regulatory Environment

The RBC Capital Markets analysts predict that 2023 will bring a more positive regulatory environment. First, the Food and Drug Administration (FDA) has recently become amenable to accepting mixed and limited clinical data in unmet need indications. The analysts believe this trend will continue in 2023, especially as it relates to gene therapies.

During 2023, the FDA is expected to issue several important regulatory decisions that may determine how deeply biotech companies can enter major therapies markets. On the regulatory downside, the FDA has become increasingly stringent in the filings of some pharmaceutical agents.

Although the RBC Capital Markets’ analysts were somewhat optimistic about the biotech industry’s prospects, the analysts also issued three negative forecasts. Increased competition, a more difficult financing landscape, and less-optimistic investor attitudes spurred some concerns.

Increasingly Crowded Landscape

The biotechnology sector is quickly becoming more populated, with multiple firms working on similar therapies for the same issues. More clinical trial enrollment is another factor of concern. With these predictions as a backdrop, the analysts urged biotech companies to review capital allocations and focus resources on more innovative therapies.

More Challenging Financing Prospects

During 2022, the number of completed deals and capital acquisitions dropped considerably compared to recent years. However, activity began to rebound during the second half of 2022. Certain biotech companies utilized creative financing strategies to meet their capital requirements.

On the operations side, some biotech firms decreased operating expenses to retain more cash resources. Even with this negative development, the analysts predicted the need for more private and public market financing in 2023.

Lukewarm Investor Attitudes

Investor dollars help to support many biotech firms’ operations and research activities. After surveying investors about their 2023 exposure plans, the RBC Capital Markets analysts found that fewer investors plan to increase their funding of biotech investments.

With that said, over half of investors expect to stay involved in the biotech sector in 2023. Just two percent of investors plan to reduce their biotech investments during this period.

Dr. Leen Kawas’ Insights on the U.S. Biotechnology Sector

Leen Kawas, Ph.D. is Propel Bio Partners’ Managing General Partner . This Los Angeles-based investment firm focuses on identifying investment opportunities in the biotechnology sector. As a successful biotech leader and innovator, Dr. Kawas is ideally positioned to identify appropriate investment candidates.

In February 2023, Dr. Leen Kawas appeared on the Angel Invest Boston podcast. During the episode, she shared insights on several aspects of biotechnology growth and investment.

The Current State of the United States Biotech Industry

Dr. Leen Kawas affirmed the biotech industry’s resurgence after some growing pains. She also referenced the FDA’s positive regulatory guidance.

“I just want to highlight to investors and people in general, there is a very unique opportunity in life sciences right now. There has been a disruption in valuation, a lot of capital injected into this space, and not necessarily always in companies that can deliver or will deliver.”

“However, a good number of companies out there are advancing technologies, therapies, or diagnostics or devices that are at a later stage of product development…Very clear regulatory interactions with the FDA as well as clinical strategy with very clear catalyst inflection points,” Dr. Leen Kawas stated.

Propel BioPartners’ Product Investment Criteria

Next, Dr. Leen Kawas explained Propel Bio Partners’ criteria for choosing a biotech industry investment opportunity. “Again, we’re not going into areas where it’s very busy, it’s product Number 10. No, it has to be first-in-class or best-in-class.

“Sometimes, you could have a product that is so clear, and from the outside, it could appear that this is an indication, this is a product that is de-risked, but you’re not only approving the product and the mechanism of action of how the product is working. You’re also evaluating the clinical strategy, clinical development, and execution. Do you believe that this management can execute?”

“From my experience with the FDA and the regulators, they’re actually very open ─ as long as you’re showing in your plans that you are going to deliver a therapy that is, one, safe, second, improves the quality of life, the FDA will be very receptive. That’s exactly what we look for in companies, whether it’s public or private,” Dr. Leen Kawas emphasized.

Evaluating a Biotech Firm’s Management

“We spend a lot of time with management…The unique thing about [the] life science industry is you cannot make decisions in isolation. If you’re making a financial or a corporate decision, you have to think about the product development [and] the science. It’s always multifactorial decision-making.

“When we talk to management…Do we believe that this CEO or this management group are going to be able to make effective decisions with shifts in the financial environment, with shifts in the regulatory environment, taking advantage of opportunities that are out there?”

Dr. Leen Kawas Offers Guidance for Biotech Investment Candidates

Finally, Dr. Leen Kawas offered recommendations for biotech entrepreneurs seeking funding in the current investment climate. “Management need[s] to be very creative right now around their financial strategies.

“Pharma has a lot of capital. There’s $500 billion on their balance sheets in the largest 18. There is capital out there. [The entrepreneurs] need to be resilient, they need to create value, and they need to be very thoughtful in their product development because this is what’s going to create value.

Targeted Advice for Biotech CEOs

“One thing that I want to tell CEOs out there: It’s a big turn-off when you’re talking to a CEO that is trying to create short-term value and misses out on the long-term value. Work for your main stakeholders, the patients, to create value for the patients”

“If you understand your market you continue to create value, especially in these environments. Going up and down 10 to 20 percent is very normal, it’s very volatile. It’s really shortsighted when CEOs are trying to create these illusionary value-creating events versus focusing on what’s important.”

“I was the CEO of a public company. You want to have smart investors around you [who] understand the timeframe and appreciate the value that you’re trying to create. If you’re making decisions for [the] short term, that is going to go away immediately. It’s just not the right thing for your product, for your company, [or] for your investors.

“I do think that investors [who] have the technical background and operational background will have an advantage in these markets. They’re going to be able to select (or have a potential ability to select) management, companies, development plans, [or] clinical plans that have a higher probability of success.

Dr. Leen Kawas Offers Sage Advice to Entrepreneurs

Dr. Leen Kawas previously enjoyed success as Athira Pharma’s Chief Executive Officer. Today, she excels in Propel Bio Partners’ rarified investment arena. From this perspective, she is well qualified to offer insights to upcoming entrepreneurs.

First, Dr. Kawas recalls advice she received while in the M3/Athira Pharma startup phase. “I remember the best advice that I got when I started Athira; ‘Leen, there’s going to be a lot of highs, but there’s going to be way more lows. You just need to know that you need to survive the lows to make it.’

“Entrepreneurs, you need to wake up, get punched in the gut three, four times, and know that you’re not the only one, and keep going because it’s so rewarding…I just want to tell people, you’re going to go through a lot of adventures. I want to tell entrepreneurs that are out there, ‘no’ is typically ‘not now.’ Just keep that in mind,” Dr. Leen Kawas advised.

Dr. Leen Kawas Looks Toward the Future

As Propel Bio Partners continues to grow, Dr. Leen Kawas reflected on her experience thus far. “I love the U.S. I would’ve not been able to achieve what I achieved at Athira, and what I’m achieving today in Propel if I was not in the U.S.

“I love the diversity and the background that we bring at Propel, and just in general, it has been amazing. I just want to tell the entrepreneurs out there, you tell your own story, you work on your mission, and you define your why. Keep going and you’ll be successful,” summarized. Dr. Leen Kawas

Originally published at https://www.europeanbusinessreview.com on June 3, 2023.