Throughout his education and career, Craig Gordon has consistently interlaced business and medicine. Gordon majored in economics at Cornell University before going to medical school at the University of Miami. While working as a rheumatology fellow at the Duke University Medical Center, he simultaneously began earning his master’s degree in business administration at Duke. Prior to that, he even did a three-year stint as a medical resident working in an emergency room in Miami. Amid it all, he felt drawn to both fields.

Eventually, Gordon realized that while he loved medicine, he didn’t love the practice of it. From there he decided to take on opportunities that contributed to the advancement of the medical field from an investment perspective. Exchanging his lab coat for a suit jacket, he spent a decade working for Capital Group Companies Inc.’s biotech and biopharmaceutical investment vertical before founding GordonMD Global Investments in 2021.

Since then, Gordon has focused on making his firm a long-term investor in both private and publicly traded biopharmaceutical companies, with the ability to facilitate private placements, crossovers, initial public offerings, secondary offerings and private investments in public equities. The goal is to help build out the companies whose drugs have the potential to change the standard of medical care on a global scale.

Structurally, GordonMD Global currently has two active investment vehicles: a private fund and a long-biased fund, according to filings from the U.S. Securities and Exchange Commission. The private fund, incorporated in 2023, is the second of its kind and had a gross asset value of about $26 million, according to a December SEC filing. Meanwhile, the long-biased fund stood at about $150 million, based on the filing.

Working to mitigate risks

Mark Tribbitt, an associate professor of strategy at the Pepperdine University’s Graziadio Business School, said that GordonMD Global’s decision to combine public and private funds is wise and helps mitigate risk during uncertain times.

Guided by a strict adherence to investment principles, GordonMD Global – which focuses on companies in the U.S., Canada, Europe, Japan and more recently Korea – has four main pillars when evaluating companies.

The firm first seeks a strong management team with a proven ability to handle large-scale growth and remain stable during economic downturns. Valuation is also key, Gordon said. For its private companies, this means generating returns of seven to 10 times; double returns for public large caps; five times returns for public small caps; and somewhere in between for its mid caps.

The firm also explores a company’s drug pipeline and its level of innovation, shying away from companies with only one drug on deck or those with “copycat” drugs.

“We truly invest in innovation,” Gordon said. “A lot of investors say that, but we actually mean it because we’re not looking for statistically significant innovation (or) incremental innovation…There has to be a clear reason to change standard of care … and so the magnitude of innovation matters to us.”

Gordon also holds dear the old adage: “Cash is king.”

“Cash matters. Runway matters,” he said. “Knowing how to run a company and drive and execute with less while doing more matters, not just with the macro environment, but then with the FDA environment and the uncertainties around tariffs and drug pricing.”

Gordon finds that through abiding by his established principles during both good and bad times, the firm can mitigate risk in a manner that fosters long-term financial security, even if it results in missing out on short-term deals. Thus, by aiming to outperform others on a relative basis during downturns, the firm should ultimately outperform in the macro as well.

Despite the potential for missed opportunities, Tribbitt finds value in a steady approach, especially when that approach remains consistent.

“You need to understand that you can’t do everything. You can’t be all things to all of your stakeholders,” Tribbitt said. “When you realize that, you create a unified vision that tends to lead to more success (versus) companies trying to be everything in all situations. (Those companies) lack a true identity and tend to suffer.”

Working on global opportunities 

Another avenue for managing risk stems from the firm’s pool of global companies.

“One of the great things about having (global) access is that we’re not solely dependent on fishing in the U.S. for investment ideas, and that’s really crucial for managing volatility, managing risk and managing capital,” Gordon said.

Opportunities in South Korea are of particular interest. Earlier this year, GordonMD announced an investment collaboration with Partners Investment Co., a South Korean-based investment firm with a similar focus. Together, the firms will seek to connect pre-clinical and clinical biotech companies in South Korea and the United States.

Gordon said he was most intrigued by South Korea’s “underappreciated” levels of innovation and its competitive pricing.

Joe Panetta, former chief executive of Biocom California who now handles building international partnerships for the company, echoed these sentiments about the prospects in Korea, specifically over the last three years.

“There’s been a very accelerated effort with support by the government to grow their biotech sector and to have a global presence,” Panetta said. “For a small country, they’re really moving ahead quickly and in a very sophisticated way.”

While the work coming from Korea is high quality and cost-competitive, Panetta said China and India still have the cheapest costs overall for manufacturing.

Having a sharp cultural awareness of how each country’s medical landscape varies in terms of market activity as well as ideological differences among medical professionals is “absolutely critical” to be a successful global company, Tribbitt said.

Gordon has observed this in his experience with global investments and his work in the political drug pricing space in several regions, including Japan.

“You can have two very highly qualified, talented physicians who are diverse in where they’re located and sometimes their opinions about a drug can be identical and sometimes, they can be wildly different,” Gordon said. “Understanding what that means for clinical trial success and commercial adoption is really important.”

Taking cues from geopolitical tensions 

Just as the firm must tailor its approach based on cultural considerations, it must also take into account the current geopolitical landscape, especially now as it relates to global trade tensions and potential impacts of tariffs.

While the company has strong ties in China, GordonMD’s key focus areas are the U.S., Canada, Europe, Japan and Korea. Given that its investments in these core areas have manufacturing exposure in the U.S., Gordon deems them to be generally lower risk. Nevertheless, sales exposure to China and to Chinese contract research organizations and contract development and manufacturing organizations carries higher risk, Gordon said.

“The U.S. government remains highly concerned about the U.S. biopharmaceutical relationships with China and so that does matter, and we’ve been proactive in understanding with our investments, if they have any China exposure, what that means and how to diversify that risk,” Gordon said.

Gordon added that it’s a concerning time for these tensions given China’s gradual rise to the top in the biopharma space over the last decade or so. China can compete with the U.S. in terms of innovation while also having cheaper costs and faster execution both on the preclinical side and on the drug development side.

“It’s ironic that at the moment that we’re trying to cut the ecosystems apart, from a competitive standpoint, China is a greater threat now to the U.S. (biopharma) ecosystem than it’s ever been,” Gordon said.

While China is the main poster child for the trade war at play, Tribbitt said “there’s no country that is off limits.” That doesn’t mean everyone should stop doing business, he said, but there’s risk everywhere.

Panetta added that given the trade conflicts, companies in early-stage research and clinical development won’t necessarily be hit as hard versus those further along in the manufacturing process. For those who are manufacturing, impacts are yet to be seen as new trade policies continue to be formed.

“(Depending on) wherever the tariffs resolve … is it going to be cheaper to still continue to do quality work (overseas) and to bring it to the U.S. or will there be incentives to do manufacturing here?” Panetta said.

Strategies to stay competitive  

Since the firm’s founding in 2021, the biotech landscape has shifted, leaving behind the golden years it experienced leading up to the Covid-19 pandemic and the development of the vaccine, and moving into its current multi-year downturn.

The biotech sector is down more than 10% year-to-date and 14% year over year, according to the SPDR S&P Biotech ETF (XBI), which measures the performance of the industry. In comparison, the Dow Jones Industrial Average is down about 6% year over year.

While the biotech sector had been viewed as a safe haven investment, Gordon said that status has been disrupted. Reasons for this decline, in Gordon’s opinion, stem from difficulties obtaining capital from public markets, high interest rates and clinical trial disappointments, especially from companies who went public too early. In addition, current uncertainty surrounding tariffs, changes to the U.S. Food and Drug Administration and drug pricing also play a role.

“We’ve seen dramatic variability within the biotech ecosystem, where you have a relatively small group of winners, a relatively bigger group of mediocre to sub mediocre performance and then another very big group of just disasters,” Gordon said.

Because GordonMD Global serves as a long-term fundamental investor, it doesn’t trade on a daily basis or invest for binary outcomes, making market fluctuations less of a nail in the coffin. That, coupled with stringent investment criteria for its companies, certainly helps.

Nevertheless, no one can fully escape the impacts of the entire market being down and widespread economic turmoil. However, Gordon said: “if everything’s going down, the question is: how do you be down less and be down in a way that’s not fundamental,” but instead can be mitigated with time?

Then, when there’s market recovery, “those investments that may have been down but were not fundamentally impaired should be able to flourish,” he said.

For the time being, Gordon implements a variety of risk management strategies such as shorting some large-cap investments to preserve capital and generate returns, focusing on the countries or global regions that are performing better at a given time, and investing in more diversified companies with various revenue streams. The firm has also explored sectors which Gordon said are “a bit tangential to our core thesis” but still related to his team’s expertise, such as animal health and consumer health.

The significant changes at the U.S. Department of Health and Human Services, including 3,500 job cuts at the FDA and 1,200 job cuts at the National Institute of Health, also raise questions about how the industry will be affected. Gordon said that he viewed the shifts as “concerning” though probably “not highly disruptive” for companies whose drugs are worthwhile.

“If your management team is truly experienced and has internal and external regulatory expertise and their drug is truly innovative and changes the standard of care – where the benefit of efficacy and safety is appropriately balanced – then, while it may be a more volatile path with more twists and turns, the path to approval should be there,” Gordon said.