Post on 13-Jan-2017
SUMMIT KICK OFF WITH OPHTHALMOLOGY INNOVATION CYCLE & FINANCING UPDATE
William J. Link, PhDManaging DirectorVersant Ventures
Update--- Ophthalmic Innovation Cycle & Financial markets
OIS@ASCRS May 5, 2016
William J. Link, PhD
Managing Director
Versant Ventures
Welcome!!
• Thank you for your commitment to innovation in ophthalmology!!!
• Overview of the day….
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Innovation Cycle-Key Constituents
1. Inventor/entrepreneur/team
2. Clinician-early adopter
3. Financial Partner--Venture Capitalist, etc.
4. Industry leaders- commercial team
OIS@ASCRS 2016 Attendance ~ 500
Innovation Cycle-Key Constituents % Attendance
1. Inventor/entrepreneur/team ~35%
2. Clinician-early adopter ~15%
3. Financial Partner--Venture Capitalist, etc. ~ 5%
4. Industry leaders- commercial team ~25%
Note: Press, consultants, service providers ~ 20%
OIS….quite a journey
• Today is our 12th OIS meeting….
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OIS….quite a journey
• Today is our 12th OIS meeting….
• Inaugural OIS@AAO meeting 2009 in San Francisco– AAO has been a great partner
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Ophthalmology Innovation Summit – 2009Palace Hotel
San Francisco, California
OPHTHALMOLOGY INNOVATION SUMMIT Advisory Board
Emmett T. Cunningham, Jr. MD PartnerClarus Ventures
William Link, PhDManaging DirectorVersant Ventures
Anthony AdamisProfessor of Ophthalmology & Visual ScienceUniversity of Illinois
Mark S. Blumenkranz, MDProfessor & ChairmanDept. of OphthalmologyStanford University
Brook ByersPartnerKleiner Perkins Caufield & Byers
Eugene de Juan, Jr., MDFounder & Vice ChairmanForSight Labs, LLC
Angela McFarlanePresident & CEOForSight Labs, LLC
Lutz Giebel, PhDManaging PartnerSV Life Sciences
David Guyer, MDPartnerSV Life Sciences
Roman G. Rubio, MDMedical Director, OphthalmologyGenentech
Charles WardenManaging DirectorVersant Ventures
Gilbert Kliman, MDGeneral Partner, Life SciencesInterWest Partners
Samir Patel, MDPresident & CEOOphthoTech
Scott M. Whitcup, MDEVP, R&D, and Chief Scientific OfficerAllergan, Inc.
OIS….quite a journey
• Today is our 12th OIS meeting….
• Inaugural OIS@AAO meeting 2009 in San Francisco– AAO has been a great partner
• Inaugural OIS@ASCRS meeting in 2012 in Chicago– ASCRS has been a great partner
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13
14
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OIS….quite a journey
• Today is our 12th OIS meeting….
• Inaugural OIS@AAO meeting 2009 in San Francisco– AAO has been a great partner
• Inaugural OIS@ASCRS meeting in 2012 in Chicago– ASCRS has been a great partner
• Inaugural OIS@ASRS meeting will be this year…August 8th in San Francisco– ASRS will be a great partner
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Innovation in Ophthalmology
• Innovation Cycle- review of the stages
• Principles of Innovation
• Constituents involved in (required for) innovation
• External environment—impact on innovation
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Innovation Cycle – Surgical Ophthalmic Technologies
Observation &
InventionProduct Dev/Pre-Clinical
Iterate/ Refine
Human Proof of Concept
Iterate/ Refine
CE Mark/ OUS Market
Dev.
FDA Approval
U.S./Global Market Dev.
Source: Market Scope
Innovation Cycle – Surgical Ophthalmic Technologies
1 2 3 4 5 6 7 8 9 10 11 12
Observation/Invention
Years
Product Dev/Pre-Clinical Phase – 1-3 yrs
Human Proof of Concept – 1-3 yrs
FDA Approval / U.S. / Launch
Successful Global Commercialization
FDA Study - 1-2 yrs 510K, 4-6 yrs PMA
Refinement – 1-2 yrs
CE Mark/OUS Market Dev
Va
lue
Cre
ati
on
Lab Research
Pre-clinical In vitro
In vivo
Phase I Clinical Trials
Phase II Clinical Trials
Phase III Clinical Trials
FDA Approval
OUS Regulatory Approvals
Global Market Dev.
Innovation Cycle – Ophthalmic Pharma & Biopharma
Source: Market Scope
Innovation Cycle – Ophthalmic Pharma and Biopharma
1 2 3 4 5 6 7 8 9 10 11 12
Laboratory Research
Years
Pre-clinical In vitro & In vivo – 1-3 yrs
Phase I Clinical Trials – 1-3 yrs
OUS Approval
Global Commercialization
FDA Approval
Phase II Clinical Trials– 1-3 yrs
Phase III Clinical Trials 2-4 yrs
Va
lue
Cre
ati
on
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Principles of Innovation
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Principles of Innovation
• Focus on important issues (big markets)
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Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
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Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
• Be disciplined
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Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
• Be disciplined
• Try things-when in doubt….try it
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Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
• Be disciplined
• Try things-when in doubt….try it
• Be willing to fail
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Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
• Be disciplined
• Try things—when in doubt….try it
• Be willing to fail
• Don’t be paralyzed by mistakes
29
Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
• Be disciplined
• Try things—when in doubt….try it
• Be willing to fail
• Don’t be paralyzed by mistakes
• Be skilled
30
Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
• Be disciplined
• Try things—when in doubt….try it
• Be willing to fail
• Don’t be paralyzed by mistakes
• Be skilled
• Be aggressive and assertive, but not arrogant
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Principles of Innovation
• Focus on important issues (big markets)
• Seek the truth
• Be disciplined
• Try things—when in doubt….try it
• Be willing to fail
• Don’t be paralyzed by mistakes
• Be skilled
• Be aggressive and assertive, but not arrogant
• Professionalism pays off
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Principles of Innovation
• Focus on important issues (big markets)• Seek the truth• Be disciplined• Try things—when in doubt….try it• Be willing to fail• Don’t be paralyzed by mistakes• Be skilled• Be aggressive and assertive, but not arrogant• Professionalism pays off
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Where Does Innovation Happen?
• Wherever the innovators are….and where the culture fosters innovation
• Corporate Culture of Innovation– Knows that innovation drives value
– Does not punish mistakes
– Knows it is NOT all about My ideas…others’ ideas have merit
– Balances internal with external innovation
– “Not invented here” attitude stifles innovation
Innovation Cycle-Key Contributors
1. Inventor/entrepreneur/team
2. Clinicians-early adopters
3. Financial Partners--Venture Capitalist, etc.
4. Industry leaders- commercial team
External Environment—Impact on Life Cycle
• Public Markets
• Venture Funding
• M&A Activities
• Outlook….
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Trends in HealthcareInvestments and Exits 2016Investor Confidence and Innovation Drive Healthcare Venture to New Heights
Written by
Jonathan NorrisManaging DirectorSilicon Valley BankM 650.575.1377jnorris@svb.com@jonnysvb
Paul SchuberValuations AssociateSVB Analytics
Caitlin TolmanSenior AssociateSilicon Valley Bank
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2015: Another Banner Year for Healthcare
At the start of 2015, it was hard to imagine that we would have another year as successful as 2014. And yet, by most measures, 2015 came very close.
.
Despite the slowdown in Q4, the healthcare industry is poised for a strong 2016, though activity likely will not match 2015.
38
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3Q'15$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$55
$60
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
$ B
illio
nsU.S. Healthcare Venture Investment Hits 15-Year High Healthcare as Percentage of Total Venture Investment
Venture investments in healthcare were projected to reach $9.4 billion in 2015, the highest level since 2000.
Biopharma venture investments reached a record $7 billion, and device remained steady at $2.4 billion .
$105
Total VC$ % Biopharma % Device
*Projected total for 2015Source: PricewaterhouseCoopers, Thomson Reuters and SVB proprietary dataThomson Reuters data includes life science and dx/tools in biopharma and device categories.
2015*
39
0
40
80
120
46 45 4517
# of
Dea
ls
Biopharma Series A Investment Dollars Surge while Device and Dx/Tools Struggle
Source: VentureSource, PitchBook, CB Insights and SVB proprietary data
2012 2013 2014 2015
0
40
80
12076
5981 97
# of
Dea
ls
Total Series A ($M) $776 $1,102 $823 $1,871
CVC Deals % / # 22% / 17 29% / 17 27% / 22 29% / 28
BIOPHARMA
0
40
80
120
35 34 3922
# of
Dea
ls
Total Series A ($M) $212 $215 $327 $96
CVC Deals % / # 9% / 3 18% / 6 15% / 6 32% / 7
DEVICE
Total Series A ($M) $331 $257 $354 $165
CVC Deals % / # 4% / 2 11% / 5 9% / 4 24% / 4
DX/TOOLS
U.S. Company Formation: Deals and Investments in Series A
40
Healthcare Venture Exits:M&A Climate Improves as IPOs Slow
41
2009 2010 2011 2012 2013 2014 20150.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
Tota
l Val
ue ($
Bill
ions
)2015 Sets Record for Healthcare Investment Returns
Pre-MoneyIPO Value ($B) $0.1 $1.8 $1.2 $2.1 $8.8 $12.1 $11.6
Big Exit Upfront
Payments ($B)$4.5 $4.1 $6.6 $4.3 $5.4 $8.0 $9.9
Big Exit Milestones
($B)$0.9 $1.1 $1.0 $1.8 $0.8 $1.0 $2.2
Pre-Money IPO Value
Big Exit Milestones to be Earned
Big Exit Upfront Payments
Source: Investment bank research, VentureSource press releases, CB Insights, and discussions with life science professionals
Potential Distributions from VC-Backed IPOs and Big Exit M&A 2009-15
42
2016 Outlook: 2015 Will Be a Hard Act to Follow
As 2015 closed, we saw some decline in exit activity and investor interest that indicate things are slowing. Here are our predictions for 2016:
• The biopharma IPO window should remain open, but there will be fewer IPOs,
• M&A will continue on pace as acquirers seek biopharma companies to replenish their pipeline
• Device IPO activity will decline, M&A activity will likely remain stable. We believe this will lead to increased deal values and returns to investors.
• We anticipate continued acquisition flurries, similar to Q3 2015, as acquirers are pressured to innovate.
Innovation in Ophthalmology--Financial Outlook
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Innovation in Ophthalmology--Financial Outlook
• Venture financing in healthcare has regained momentum…
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Innovation in Ophthalmology--Financial Outlook
• Venture financing in healthcare has regained momentum…
• IPO activity picked up in 2013 and 2014….remained strong in 2015…will be more moderate in 2016
45
Innovation in Ophthalmology--Financial Outlook
• Venture financing in healthcare has regained momentum…
• IPO activity picked up in 2013 and 2014….remained strong in 2015…will be more moderate in 2016
• M&A activity remains strong, but is impacted by industry changes/consolidation
46
Innovation in Ophthalmology--Financial Outlook
• Venture financing in healthcare has regained momentum…
• IPO activity picked up in 2013 and 2014….remained strong in 2015…will be more moderate in 2016
• M&A activity remains strong, but is impacted by industry changes/consolidation
• Relative Attractiveness of the Ophthalmic Sector is solid….
47
Innovation in Ophthalmology--Financial Outlook
• Venture financing in healthcare has regained momentum…
• IPO activity picked up in 2013 and 2014….remained strong in 2015…will be more moderate in 2016
• M&A activity remains strong, but is impacted by industry changes/consolidation
• Relative Attractiveness of the Ophthalmic Sector is solid….
48
Innovation in Ophthalmology
Innovation in Ophthalmology
• Still immense unmet needs
Innovation in Ophthalmology
• Still immense unmet needs
• Innovation resources focused where they are rewarded
Innovation in Ophthalmology
• Still immense unmet needs
• Innovation resources focused where they are rewarded
• Key Constituents….entrepreneurs; clinicians; VCs and Industry…..strong and more connected than ever
Innovation in Ophthalmology
• Still immense unmet needs
• Innovation resources focused where they are rewarded
• Key Constituents….entrepreneurs; clinicians; VCs and Industry…..strong and more connected than ever
• Innovation in the ophthalmic sector is gaining, not losing momentum
Innovation in Ophthalmology
• Still immense unmet needs
• Innovation resources focused where they are rewarded
• Key Constituents….entrepreneurs; clinicians; VCs and Industry…..strong and more connected than ever
• Innovation in the ophthalmic sector is gaining, not losing momentum
• Thanks to all who are committed….because when we do well, many people benefit!!
Thank you….