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(Left
to right): DR. RAUL EVELIO PEREZ,
president; JAMES L. NOUSS JR.,
manager; DANIEL A. BURKHARDT,
manager |
DOCTOR AND VENTURE
CAPITALIST—
POWERFUL
MEDICINE
|
BY
KEVIN KIPP
What’s good for humanity is good for St. Louis, and vice versa.
And Dr. Raul Evelio Perez, president of Oakwood Medical Investors,
is working for the advancement of both.
Perez and his fellow Oakwood partners Jay Nouss, an attorney with
Bryan Cave, and Dan Burkhardt, an investment banker at Edward Jones,
have raised $34 million to invest in life sciences through venture
capital funds Oakwood Medical Investors I, II and III.
“We identify unmet medical needs and search for technologies to
respond to those needs,” says Perez, “either through more effective
medical products or products that cost less and are just as effective
as what they replace.”
Products typically fall into one of three categories: medical devices,
biopharmaceuticals or diagnostics.
There are two stories here. The first is that of an 11-year-old
refugee named Raul whose father, a physician, and whose mother,
a school teacher, found their way from Castro’s Cuba in 1959 to
St. Louis.
That little boy grew up to be a doctor, too—a board certified OB/GYN
and a diplomat of the American College of OB/GYN—and he, too, married
a school teacher.
Perez graduated from Lindbergh High School in ’68 and Saint Louis
University in ’72. He met his wife in college. She eventually earned
her doctorate in education, but retired from teaching with the birth
of their first of four children. They now range in age from 16 to
25.
Perez started graduate medical studies in Mexico, and completed
his degree at the University of Maryland, at Maryland General Hospital
in Baltimore. In 1981, he completed his four-year residency in obstetrics
and gynecology at St. John’s Mercy Medical Center in St. Louis.
Perez practiced medicine for 19 years until July 2000, when he became
a full-blown, full-time venture capitalist.
The second story is about the emergence of an entrepreneurial talent
that combines a physician’s understanding of human health with business
acumen and—as partner Burkhardt explains—the communication skills
of a man with 20 years experience explaining highly personal matters
to dozens of women every day.
Perez began dabbling with seed capital investments in 1990 when
colleagues Dr. George Ahlering and Dr. Rick Muckerman brought an
opportunity in women’s healthcare to his attention—Orion Medical.
It developed a device to detect contractions in women with high-risk
pregnancies. Perez and others invested $575,000. In April 1991,
Baxter International Inc. bought Orion for $8.6 million.
“We knew every deal couldn’t have the results that Orion did, but
we also knew that Raul had a talent for spotting opportunities in
healthcare investing,” say Burkhardt and Nouss.
The three continued to invest together, but through separate entities
from 1991 to 1997. In 1997, the Oakwood franchise was born. The
partners assembled a modest $4 million from a group of friends,
acquaintances and a couple of St. Louis-based institutions.
Burkhardt admires Perez’ thought processes. “In your career you
get a chance to work with a lot of people, and I thought Raul was
particularly good at identifying opportunities in the life sciences.”
Apparently. Oakwood I doubled, returning 100 percent of the cash
invested and an equivalent value in stock.
Oakwood II, a $6 million fund that was fully invested in July 1999,
has already returned to investors 20 percent of the capital invested—this
at a time when, Perez observes, “most investors are 20 percent below
water.”
Oakwood III raised $24 million, enough to afford Perez his first
full-time investment job.
Interestingly, the typical investment Oakwood makes in a healthcare
company has climbed from $400,000 to $1.8 million. But, Oakwood
continues to invest in later stage companies. “We’re willing to
pay a little more for less risk. We would rather return money to
our investors sooner,” Perez says.
About 60 percent of III’s capital is invested. Among the eight companies
to which funding found its way is Quick Study Radiology. It provides
digital radiology services. With this technology, radiologists have
access to information quickly and easily on the Internet, replacing
hard-to-find and hard-to-store x-rays.
Besides rewarding investors, Perez is pleased that Oakwood’s investments
benefit St. Louis, too. “There’s no better magnet than capital.
Venture capital is one of the key factors to having a vibrant life
sciences industry like Boston or San Francisco. We get a lot of
traffic here: CEOs, CFOs, chief scientific officers. That in itself
puts St. Louis on the life sciences map.”
Kevin Kipp runs Bubble Communications, a creative services and
community relations firm in St. Charles.
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