At Face Value

The Trained Gut

Dominik Escher, Founding Partner at Pureos Bioventures, is in the business of organs. More specifically, he’s in the business of funding the innovations that heal, repair, and regenerate them. But there is one organ that Escher uses more than any other when making investment decisions, and yet no pill or targeted treatment will ever replace or improve the one he has developed over the years: his gut.

“If I had to choose one quality that will make investments successful, it’s the gut feeling,” Escher says. “Due diligence is only the foundation, the concrete of an investment. But ultimately, you need to have a good feeling about the company, the people, the product, and the prospects.”

One isn’t just born with a gut feeling like Escher’s – it is built on years of experience, failure, success and, sometimes, luck. In part one of our series, he tells us how his entrepreneurial journey started in the Valley, pretty quickly brought him back to Switzerland, and turned eighteen years of building biotech companies into a conviction that Switzerland needed a different kind of investor – so he went and became one.

The Tech Behind the Healing

Escher started his PhD in 1995 – not in Zurich, but at UCSF, where labs from Stanford, Berkeley and the wider Bay Area existed in a kind of permanent, productive collision. The open dialogue, the meetings across institutions, the general culture of scientific ambition sitting comfortably alongside commercial thinking, made a deep impression. And even though he got offered a postdoc position at the same lab after his PhD in Zurich, he turned it down.

The reason says something about how he thinks. Academia asks you to go deep into one small thing. Escher had always been drawn to breadth – the connections between fields, the wider picture, the sense of where something sits relative to everything else around it. So in 1998, the year he finished his PhD, he co-founded ESBATech AG – a University of Zurich spin-off developing antibody fragments for therapeutic applications – and didn’t look back.

Throughout the interview, the fascination with the tech behind the healing is a red thread that not only tints this conversation, but also the way Escher invests. He manages to keep the spark of ESBATech’s innovation alive, even 28 years after its inauguration:

“The original business was target validation. The timing felt right: the human genome had just been sequenced, the question of what each gene actually does had become commercially urgent overnight, and ESBATech built model systems using yeast cells to introduce human disease pathways and identify drug targets.” Everything was there: The science, the excitement, the momentum.

And then the intellectual property landscape for the entire field collapsed almost overnight, taking hundreds of companies with it.

“Failure Was Never an Option”

Escher’s response to watching his industry disappear was not to wind down. It was to look around and find where the advantage still was. When asked whether the decision to pivot was a difficult one, his answer is as fast as it is definitive: “I never thought that the company would fail,” he says. “I was just trying to maneuver in this new environment and find opportunities where we had an edge.” What ESBATech had built for target validation – its platform, its tools, its deep expertise in antibody fragments – could be turned into something else entirely. They pivoted into drug development, specifically single-chain antibody fragment therapeutics for ophthalmic diseases, and started again from a new angle. As Escher puts it simply: “Failure was never an option.”

It was the first real test of the gut: not as instinct, but as something earned through the specific discomfort of having to abandon a plan and build a new one without a safety net.

The Bubble Bail of the Banks

By the early 2000s, ESBATech had a Series A and a direction. The investors were Swiss – Lombard Odier, Credit Suisse through its venture arm, and Banca della Svizzera Italiana – and for a moment, this felt like solid ground. “My colleagues said: you have the Swiss banks, you don’t have to worry,” Escher recalls. Then the tech bubble burst.

What followed was a clean lesson in what happens when institutional capital decides venture is too risky and acts on that decision quickly. All three bank-affiliated investors moved to exit simultaneously. One had a direct mandate: sell everything, as fast as possible. They sold their shares to smaller existing investors, sometimes at an 80% discount. “They had no skin in the game”, Escher notes. “They were managing bank money which ended up being a negligible position of the loss side on a balance sheet.” The experience crystallized a view he still holds: that the right people in venture are those who feel the loss personally when something fails, not those managing someone else’s risk tolerance from a safe distance.

Biomed Investment, VI Partners and Novartis Venture Fund stayed on as the remaining Swiss investors, but could only write small tickets. So Escher flew to the United States and rebuilt the syndicate from scratch. SV Life Science and Clarus Ventures led a Series B of USD 50 million, later topped up by a further USD 25 million. Once the American money was in place, Swiss institutional investor HBM Partners joined the round. The sequence – foreign capital validates first, local capital follows – was not lost on him. He would spend the next fifteen years trying to change it.

(Cow)bells and Glass Houses

By 2008, ESBATech had raised approximately USD 90 million and had three programs in clinical development. The preferred exit plan, written into the business model from the beginning, was a NASDAQ IPO – Escher had always imagined ringing the bell.

Then the global financial crisis arrived.

For roughly two years, not a single biotech company went public. ESBATech was acquired by Alcon in 2009 for USD 150 million at closing, with contingent milestone payments of up to USD 439 million.

Looking back, he says he’s glad. “The COVID biotech IPO wave produced a generation of companies that went public too early – preclinical-stage businesses suddenly listed, with no news flow, grey clinical data, and stock prices that punished every quarter”, Escher recalls. “It’s a very stressful life as a public company. You’re in a glass house. You have to report every three months and basically, you just have to please investors.” His friends who did ring the bell are living a different kind of existence. “Whether better or worse is”, as he notes, “a question of which quarter you’re in.”

The alternative – listing on the SIX Swiss Exchange and ringing the cowbell rather than listing on the NASDAQ – is a question he takes seriously and answers carefully. In principle, yes: the visibility of being one among dozens rather than one among hundreds is real, and Actelion proved it could be done. But global biotech capital benchmarks itself against NASDAQ, and a Swiss-listed company without that institutional attention can go very quiet, very fast. “The investor interest – that is what is currently missing.” The infrastructure exists. The audience hasn’t yet arrived in the numbers that would make the SIX the obvious choice. But with the right tools like analyst coverage, investors interest and scale-up fast tracks the SIX still has a chance to list Switzerland’s biotech heavyweights.