The billionaire doctor duo behind Regeneron


October 5, 2020

PLUS: Are loyalty programs worth more than airlines?
October 5, 2020
The Hustle
TOGETHER WITH
eToro

President Donald Trump and the First Lady, Melania Trump, tested positive for COVID-19, with cases across the White House rising over the weekend. Echoing the words of candidate Joe Biden and former President Barack Obama, we wish everyone affected a speedy recovery from the illness.

The Big Idea

The billionaire doctor duo behind President Trump’s experimental drug

There are no treatments approved for COVID-19, but President Trump was given an experimental antibody cocktail late last week, under the FDA’s compassionate use clearance.

The drug is manufactured by Regeneron, a New York-based company whose CEO has known Mr. Trump for years, The New York Times reports.

“All I can say is that [the White House] asked… and we were happy to oblige,” Dr. Leonard S. Schleifer, Regeneron’s co-founder and CEO, told the Times.

A doctor spies a market opportunity

Regeneron’s story starts in 1988.

According to Forbes, Schleifer completed his MD and PhD degrees and was working as a neurology professor at Weill Cornell Medical College when he took an entrepreneurial turn.

After seeing the success of biotech firm Genentech, Schleifer convinced venture investors to put up $1m to support his startup that would do research on diseases of the nervous system.

Schleifer then went out to convince a partner to join him. That man was George Yancopoulos, another MD/PhD who became Regeneron’s chief scientific officer.

A prolific partnership

Schleifer and Yancopoulos actually grew up on the same street in Queens, NY, but had never met.

As business partners, Schleifer was the dealmaker who gave Yancopoulos the resources and space to do research… and research he did.

Forbes describes Yancopoulos as one of the “most prolific drug hunters of his generation.”

But Regeneron’s first blockbuster drug would take decades

Eylea, an injectable eye treatment to prevent macular degeneration (AKA vision impairment), hit markets in the early-2010s.

Eylea is now one of the world’s top-selling prescription drugs and the anchor of Regeneron’s $60B market value.

Based on their Regeneron stakes, Shleifer and Yancopoulos are now worth $2.3B and $1.3B, respectively.

Is the COVID-19 cocktail next?

According to the NYT, Regeneron’s antibody treatment “hastened recovery time” of a small number of volunteers in its ongoing study.

Much more testing will have to take place before the FDA deems the cocktail safe for wider use.

The success (or failure) of this treatment will define the next chapter for this accomplished doctor duo.

Share on Facebook Share on Twitter Send as email to a friend View on our website
Snippets
  • Big Tech is taking another (virtual) pilgrimage to Washington on October 28. This time, CEOs will answer questions about Section 230 protections. 
  • Twitter is testing a new disinformation-reporting feature called “Birdwatch.” If you see a viral lie? Report it to the Birdwatch queue.
  • The movie business has been so bruised that, after reopening this summer, the theater chain Cineworld is considering once again closing its doors.
  • Think Calm, but more erotic: The startup Emjoy is leading an audio-based sexual wellness boom.
  • Burger King’s Belgian offshoot is rolling out a new ad campaign to… earn a Michelin star?
How loyal are you?

Are airline loyalty programs worth more than the actual airlines?

Airline loyalty programs — incentives (like free miles) given to travelers — are a massive business.

The top 100 loyalty programs could be worth as much as $200B. And during the pandemic, they’ve become a lifeline for ailing airlines.

To wit: Delta (SkyMiles) and United (MileagePlus) secured respective loans of $6.5B and $5B against their loyalty programs to face off a quarantine cash crunch.

Airlines have a ‘negative’ worth without loyalty programs

According to a Financial Times analysis, loyalty programs are worth ~$26B to Delta — more than the airline’s current market value of $20B.

The same holds for America Airlines ($24B vs $6.6B) and United ($20B vs $10.5B).

Without their loyalty program, tech writer Byrne Hobart notes, Delta’s physical airline operation (planes, landing slots, brand) is worth less than zero — in this case, negative $6B.

However, the valuation exercise is not that straightforward

As Hobart explains, you can’t just simply separate the loyalty programs from the airlines.

Customers are loyal to programs because of the capacity and network of destinations they offer. An airline can’t willy-nilly cut ticketing options because of a belief that loyalty programs hold all the value.

It’s a package deal.

“An airline without its highly profitable loyalty program is a company that faces high labor costs, volatile fuel prices, and a rapidly changing demand environment,” says Hobart.

“With loyalty programs,” he says, “that’s offset by a high-margin, high-growth side business.”

(You can find more of Hobart’s great analysis at his newsletter, The Diff)

Share on Facebook Share on Twitter Send as email to a friend View on our website
SPONSORED

Love crypto? Want a cool $500? Then listen up:

If you love, own, trade, or otherwise geek out over all things crypto, this one’s for you. 

For a limited time, our friends over at eToro are offering you $500 big ones when you open a new account. 

If you haven’t heard of it yet, eToro is the what’s-what of social trading and investing. Chat with other crypto traders, get plugged into the crypto world with a custom social feed, and even copy the moves of other big-name traders on the fly. 

Okay, okay, I’m in — what next? 

1. Sign up here and verify your account
2. Deposit a minimum of $5k
3. Invest a minimum of $5k into any crypto that tickles your fancy 

For those of you counting at home, that cash gift is an immediate 10% return on your money. What are you waiting for?

Your $500 awaits →

FINE-ISH PRINT: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.

Making Paper

How a Pennsylvania investor group scored a $15B stake in TikTok’s parent company, Bytedance

Move over Dunder Mifflin, there’s a new corporate top dog in Pennsylvania.

According to a report from the Wall Street Journal, the owners of Susquehanna International Group (SIG) — a derivatives trading firm based in Bala Cynwyd, PA — have been sitting on a 15% stake in ByteDance (TikTok’s China-based holding company) for years.

SIG is an option-trading giant

Per the WSJ, SIG was founded in 1987 by Arthur Dantchik and a group of college friends. Today, the privately held firm is responsible for more than 1 in 5 options trades in America.

SIG, which has no outside investors, has printed so much cash in the past few decades that the ownership group has aggressively looked for investment opportunities outside of its core business.

The investment portfolio is extensive

SIG’s owners started with so-called PIPE deals (the sale of large public equity stakes in a private transaction) in the 1990s.

The road to TikTok began in the early 2000s when the firm opened SIG Asia Investments in Shanghai. In total, SIG’s China arm invested a collective $2B in 260 companies, including ByteDance.

SIG plunked down $5m in ByteDance in 2012, the year of the company’s founding. Today, that stake is worth $15B — a casual 3000x return.

That’s more “paper” than Dunder Mifflin has ever made.

Share on Facebook Share on Twitter Send as email to a friend View on our website
SPONSORED
Shop Fully →
TRENDS

A minicorn and unicorn have a baby…

In 2017, when President Emmanuel Macron came to power, the former investment banker vowed to make France “a nation of unicorns.”

Just three years later, funding for French tech startups has reached an all-time high of over $4.3B. In a recent Trends report, we cover 6+ French  soonicorns, AKA Macron’s likely bets to become the country’s next billion-dollar companies. Join Trends today to get access to the full brief on:

🏡 Which industry has seen a 2,297% increase in funding in just 2 years

📱 The “super apps” that have swept Europe

🛴 The micro-mobility company that leveraged post-COVID trends to raise $93.6M

✈️ How companies are rethinking socially distant tourism

📈 The index significantly outpacing the SPX this year, while focusing on social and environmental responsibility

🐜 The company trading in petrochemicals for insect castings, to disrupt a $10B market.

Get access to this report and dozens of others, with your $1 Trends trial

🦄 Get access for $1 🦄 → JOBS

Account Executive, Fyllo:

This digital advertising firm is looking for an experienced AE to wrangle new clients. Yeehaw.

Marketing Lead, Feeld:

Ever want to work for a super sexy dating app? Here’s your chance.

Marketing Operations Manager, SevenFifty:

This CRM software company is scaling, and it’s looking for a stakeholder to focus on data governance. Could it be you?

Content Strategist, Clerky:

Can you write the blog post-ess with the mostess? Read on.

Social Media Manager, GameChanger:

Hey there, sport. Here’s your chance to spend your days talking about youth baseball.

See more →
SHARE THE HUSTLE

GIVEAWAY: Share The Hustle for a chance to win a MacBook Pro

Ambassador Rewards

Every referral you get gives you an additional entry in the giveaway. Here’s a message you can use to share with your friends:

Hey! Do you read The Hustle? It’s the best daily business newsletter out there — only takes 5 minutes to read. They’re running a giveaway today so if you sign up using my link, we’re both entered to win a MacBook Pro. Sign up here, it’s free: {referral_url}

Share to Win →
How did you like today’s email?

hate it

meh

love it
Today’s email was brought to you by Michael Waters, Caroline Dohack, and Trung Phan.
Editing by: Zachary “MD/PhD” Crockett, Martina Neverturnover (Director of Cold Weather Starting).

PODCAST JOBS ADVERTISE CONTACT US
Facebook Youtube Instagram Trends
251 KEARNY ST. STE 300, SAN FRANCISCO, CA 94108, UNITED STATES • 415.506.7210 Never want to hear from us again? Break our hearts and unsubscribe.
The Hustle

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.