ZSX Medical Financing Questions Given the “total” amount of money ZSX needs to reach FDA...

ZSX Medical Financing ZSX Medical Financing QuestionsQuestions

Given the “total” amount of money ZSX needs to reach FDA clearance, are they best served by:1.Seeking the money as proposed ($1.35MM, then $6MM)?2.Seek a single raise of $7.5MM?3.Seek two raises differently divided?

PCCI Monthly Group Meeting, December 13, 2010Vidal F. de la Cruz, Vice President Business Development, Cytokine PharmaSciences, Inc.


1. Grants2. Private Investors3. Angel Investors 4. Non-profits5. Bank Loans6. Venture Capitalists7. Corporate Venture Capitalists8. Going Public9. Letting a group source funds for you10. Licensing or co-development

Some General Funding Strategies:


Grants:NIH, e.g., SBIR or the Office of Minority Health

SBIR Phase I is for $150k total costs over 6 monthsSBIR Phase II is for up to $1mm over 12 months Can apply for combined Phase 1 with Phase II preapprovedPhase III possible if possible U.S. Government use


Private Investors:Self, Friends & Family; sufficient for first tranche of ~$1mm?

Angel Investors:Too variable to comment on specifics; sufficient for first tranche?

Non-Profits:E.g. Gates Foundation, Genesis Research Foundation, others

Bank loans:An option, if you’re willing to mortgage your home(s)!


VC & Corporate Venture Capital:

VC Corp VC

Fund focused Fund & Pharma Bus. Focused

Financially driven(3-5x+ return, quick exit)

Financially & Strategically focused

Lower risk tolerance Higher risk tolerance

Committed to business ($$) Committed to business and/or assets

Looking to sell Typically looking to buy


Courtesy of Juan Harrison, Takeda Research Institute


Going Public:• Public offerings getting better, but still uncertain:

• Levels in 2010 about half that prior to crisis in 2007 ($1.2 billion versus $2.9 billion). • Early stage financing also off ($4.8 billion/$6.8

billion for 2010YTDNov/2007). • Licensing deals down too, as are M&A deals (302

agreements in 2010 (11YTD) vs 540 in 2007, and M&A 29 deals vs 55 during the fire sales in 2008).• Significant cost to going public.• Costs of operation are very high.


Letting Group Source Funds:• Costly, but will allow you to focus on technology

Licensing:•Will be competing with Pharma. Some mergers, e.g., Merck-Schering, are resulting in the shedding of many programs. •Niche play (seek expansion or broadening of technology)•Fear of change in landscape


Codevelopment:• Seek companies in OB/Gyn space• Don’t focus on their present products; consider their

sales force (pharma company may have better access to OB/Gyn physicians than device/supplies company)

• Consider foreign markets and offering preferred licensing terms for co-development

• Consider services companies


Given the “total” amount of money ZSX needs to reach FDA clearance, Should they:1.Seek the money as proposed ($1.35MM, then $6MM)?2.Seek a single raise of $7.5MM?3.Seek two raises differently divided?

ZSX Medical Financing Questions Given the “total” amount of money ZSX needs to reach FDA...

Documents

Transcript of ZSX Medical Financing Questions Given the “total” amount of money ZSX needs to reach FDA...