Brewer's Yeast Improves Glycemic Indices in Type 2 Diabetes Mellitus
From Brewer's Yeast to Personalised Medicine The Financing... · Source: NVCA 2014 Yearbook (by...
Transcript of From Brewer's Yeast to Personalised Medicine The Financing... · Source: NVCA 2014 Yearbook (by...
The Financing Perspective
Jack Bech Nielsen
Danish-UK Chamber of Commerce
23-April 2015
From Brewer's Yeast to Personalised Medicine
Public
The Novo Group
> 25% ownership > 70% share of votes
> 25% ownership > 70% share of votes
100% ownership
Large Investments Novo Seeds Novo Ventures Novo Finance
Novo Ventures
Novo Ventures is part of Novo A/S, which is the “asset manager” for Novo Nordisk Foundation
NV makes venture capital investments in life science companies for financial return
Evergreen open fund
Annual investments of $150-200 million, one of the largest global biotech VC’s
12 professionals in Copenhagen, London, San Francisco,
and Boston
15 years, 110 investments, 44 active portfolio companies
Novo Ventures - Active Portfolio 2015
Denmark
Orphazyme Switzerland Anokion Delenex ObsEva
USA – West coast
Alder Allakos AnaptysBio ApoE Asante Cardeas Ceterix Cianna Corvus HTG Inogen Intersect iRhythm Nevro Nora Otonomy SI-BONE Thesan Tobira Unchained Labs
USA – East coast
Akebia Apollo CoLucid Flexion Ophthotech PanOptica Reata Spinifex Tarsa Tetraphase Tokai ZS Pharma
New portfolio companies in 2015
UK
Acacia
Adaptimmune
Epsilon-3
KalVista
Karus
NeRRe
Vantia
Novo Ventures – Exits 2014
Denmark
Santaris - Roche $250 M
USA – West coast
Alios Biopharma – JNJ $1750 M ProteinSimple - BioTechne $300 M IPO’s Alder $80 M Inogen $70 M Nevro $126 M Otonomy $100 M
USA – East coast
IPO’s Akebia $107 M Flexion $65 M ZS Pharma $107 M
Pharma partnership
SBIR, grants
Crowd funding?
Where can you get capital to get you to the next stage?
Friends & Family
$0.1M $1.0M $5M $20M $50M $150M $500M
Business Angels
Venture Debt
Proceeds
Sophistication of domain expertise
Venture Capital
Royalty financing
IPO
Biotech Financing Options
Where Does the VC Money Come From?
Pension funds
Academic institutions
Public funds
Insurance companies
Banks, Capital markets
High Net Worth Individuals, Family offices
Strategic investors
Government agencies
Soveregin funds (Oil-exporting countries, China…)
Evergreen funds like Novo A/S is a rare exception
Some Key Numbers for Venture Capital Industry
$200 billion under VC management in US, 874 VC firms *)
20-25% goes to Healthcare, 179 active life science VC firms
$4.0-4.5 billion Venture Capital to US Biotechnology/year
Median life span of life science VC firm is 16 years vs 14 years for IT
EU biotechnology is app 20% of US market
Source: NVCA 2014 Yearbook (by Thomson Reuters) *) Wells Fargo has more than $600 billion in assets
Source: NVCA 2014 Yearbook (by Thomson Reuters)
VC Capital Commitment per Year in US
2014: $29.8 billion
2013 Venture Investments in US
Source: NVCA 2014 Yearbook (by Thomson Reuters)
Advance program in clinical development in order to increase likelihood of approval and identify clinical drivers for commercial success
Derisk program enough that someone else will pay a multiple on your investment to take residual development/commercial risk
Pharma or larger biotech via M&A
Public investors via IPO
Value Creation - Derisking
Where can you derisk most capital efficient?
Rawlins, M. D., Nature Reviews Drug Discovery 3: 360-4 (2004)
This depends upon the specific program and require careful anlysis
Drug Discovery to Launch
Basic Research
Lead Discovery
Preclinical Development
Phase II
Phase III
Regulatory Filing
Launch
Phase I
2-4 years; $1-10 million
1-2 years; $3-10 million
1-2 years; $2-20 million
1-3 years; $5-50 million
2-5 years; $15-500 million
1-2 years; $5-15 million
Typical exit windows for biotech companies
Drug re-profiling
Time and Cost to Market
Success Rate vs Clinical Stage
Tufts Center for the Study of Drug Development 2014
Success Rate vs Disease Area
Nature Biotechnology 32, 40–51 (2014) The bars represent phase 2 and phase 3 success rates and the line represents Likelihood of Approval from phase 1
Valley of
Death
Pharma partnership
SBIR, grants
Crowd funding?
Biotech Financing Options
Friends & Family
$0.1M $1.0M $5M $20M $50M $150M $500M
Business Angels
Venture Capital
Venture Debt
Royalty financing
IPO
Proceeds
Preclinical Phase 1 - 2a
Phase 2b - 3
Changes in due diligence since 2000 for NV
We have more focus these days on:
─ Great Management
─ Clear differentiation
─ Breakthrough treatments
─ Reimbursement risk
─ Syndication risk
─ Licensing/deal structures that enable trade sale
We obviously still need:
─ Solid IP
─ Significant market size
─ Reasonable clinical development costs to an M&A window
─ Multiple potential buyers
─ An exit horizon in our life-time