How to make a startup worth 400 mln. And now I want to help young people

An interview with Silvano Spinelli, the founder of EOS, which, thanks to a promising cancer treatment drug, was sold in the U.S. for a record sum. Project, money, corporate structure, vision: here is how he built the perfect startup. The next dream? Giving a hand in helping a new Italy emerge

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Maybe in another country an Italian, who in less than six years built up a company from nothing in Milan and then sold it in the United States for almost 500 million dollars, without producing weapons, drugs or pornography but promising cancer treatment drugs, just maybe, today, this Italian would have been called and thanked by the President of the Republic, and by the Prime Minister to ask how he did it. And, maybe another Italian, after having hit the jackpot would be off to the Caribbean to enjoy his money. But not Silvano Spinelli, 61 years old, medicinal chemist, who, two days after the sale of EOS to Clovis, is in his office in Milan pondering how he can now be useful “to others, to young people”.
The story is a well-noted one: it is the news of the biggest exit of the year, actually the decade. To find something similar we must go back to the Tiscali sale. But this story is even more beautiful because it is not just a matter of money, but of innovation, passion and talent. Within the answers that Spinelli gave me there are many lessons to learn.

So, how are you? Well, I imagine?
I have achieved great satisfaction. Heck, we showed that with hard work and good ideas even in Italy it is possible to do good things!

Who do you have to thank for this?
The French were the first to believe in us, from Sofinnova, I mean. They came to know of us first…

During the previous operation, Novuspharma: another success.
They have a truly venture capitalist approach, not like many Italians who are transformed banks. What I want to say is that a VC is a true associate who does not just put the money in with the hopes of immediately making more but who works, actively, to improve the company. It offers the company in which it invests a connection with the sector that allows it to then interface with the world. VC’s like this do not exist in Italy, with the exception of Principia.

Which has, in fact, joined the company and now celebrated with you all.
Yes, but I must say that they passed during the last round to increase capital, leaving out 200 thousand euros.

So they went from 10 percent to 8.7.
It might seem small but given the exit that we signed, they are crying for that missed increase because they lost a double liquidation preference. It probably also influenced an internal and very complex issue which did not help them.

Getting back to you. Seen from the outside, your two companies, Novuspharma and EOS, are very similar: both researching anticancer drugs.
No, no it is all very different. With Novuspharma it was a typical case of spinoff: we had already accomplished the infrastructure, laboratories, personnel and products in the clinical phase; we were just asking for financing to complete the project. With EOS, on the other hand, it was just with the huge personal experience of the three founders and without any structure; we not only didn’t have the products but not even a project, just a very strong intuition. This: that in Europe and the world there are a lot more ideas than there are managers who want to develop them. And, in fact, we found what we needed in the United States.

What do you mean?
In a small chemical company that produces molecules, Advenchen. They had created a product that seemed interesting to try to develop into a real drug and we took the global patent, except for in China.

It went well, seeing that Clovis chose to buy it.
Yes, also because I know well who bought it. The CEO of Clovis and its founders were those who had created Farmion, a pharmaceutical company that sold all over the world the very famous anti-cancer drug, Thalitomide. These are people who develop drugs very well. For this reason we accepted that a part of the payment would occur in shares: 3.7 million Clovis shares for a total value of 190 million dollars.

Let’s go back a bit. I was struck by the name you chose: EOS, or, Ethical Oncology Science. It is sort of like saying that not all of the scientific research on cancer is ethical.
We chose it because we have always decided to only develop products that we retain innovative and not just ‘me too’.

‘Me too’?
Those drugs that may improve oncological therapy but are similar to what already exists. You, however, do get a piece of the market share, involving hundreds of patients for months with results that may extend a life by one week… We didn’t want to do these things certainly for an ethical reason but also for a financial one: in these operations there is a minimum return and this is not what we had in mind when we began. We created the company by telling our associates: if you want a company that becomes big we are the ones; we don’t want to make projects grow. For this reason, there were never more than seven employees.

Seven?
Seven.

You did all of your laboratory work externally?
All externally but within Italy, with Italian institutes, and we are proud of this. I can better explain with the story of EOS: we took the money from abroad (France and Holland), we invested it in a small American company in order to buy a product, then we took it to our Italian laboratories to make a drug and then resell it to a big American company. Beautiful, no?

Amazing. But a little money you did get in Italy as well, from Principia, to be exact.
Yes, but of the 25 million euros that we raised, less than three came from Italy. It was significant, but not determining I’d say.

One last question: now what do you think you’ll do? Are you a serial startupper, will you do another one?
Now I would like to exploit my visibility with investors to promote beautiful projects in Italy, with Italian management, but young! Not like me, I am 61 years old! I’m available, give me a ring.

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