Archive | January, 2014

A Deep Dive: LSN Family Office Investor Mandates

30 Jan

By Lucy Parkinson, Research Manager, LSN

lucy 10*10While there are many potential financing options for a fundraising life science executive to consider, few are more intriguing than family offices.  In the hopes of understanding more about how these institutions seek opportunities in the life science sector, I’ve taken a look at the last 30 family office mandates gathered by LSN research team to get some insight into exactly what’s making them tick.


We’ve covered family offices extensively before, but just as a refresher: Family offices fall into two broad categories; single family offices (SFOs) that are responsible for investing the assets of one family (typically with net worth of over $100m), and multi-family offices (MFOs) which provide investment guidance to several families, typically those with significant assets but not enough to justify hiring their own dedicated investment team.

Beyond this initial distinction, family offices can orient themselves in any number of ways, especially when it comes to direct investment in life sciences. This variety is apparent in the range of investment styles and interests represented by the family offices tracked by LSN:  Some notable examples include structured angel vehicles that make dozens of sub-$250,000 placements every year, and families that have created evergreen PE funds which allocate over $50m to each company that they invest in.  This variability makes sense, because every family is different, and each chooses a strategy that fits their personal goals – whether it’s advancing treatment for diseases prevalent in their family, investing strategically to enhance a pre-existing family business, or making use of their own expertise to select companies in the field where they made their money.  As I mentioned in a recent article, family offices are notably more likely to be specific about which sector of the life science arena they’re seeking to invest in.  However, this tendency seems to dissipate as allocation sizes increase; family offices that allocate over $10m per investment generally consider a broad range of life science opportunities.

Another notable data point from our family office mandates; they’re more likely than other investors to be opportunistic about which phase of development they prefer to invest in.  A full third of these 30 family offices will consider investing in life sciences companies at stages ranging from preclinical development to products on the market.  This flexibility is a huge draw for life science companies raising capital, who need the support of an investor who will be interested in backing them for the long haul. Understanding what a family office wants in this context is the key to successfully courting them for capital. Before you talk to a family office, you’ll have to understand who they are and why they are committed to a particular investment strategy. Most importantly, you must consider whether the family’s goals are aligned with your own.

It’s easy to understand how the personal qualities of family offices make them attractive to fundraising executives.  We often get asked how best to get an investment from a family office. The short answer is that more than anything, it’s about fit. Careful research and a highly targeted approach are the first step towards starting a dialogue with a family office – just do some careful research, pick up the phone, and go outbound.

LSN Deals Database Spotlight: Biotech Licensing Trends in 2014

30 Jan

By Maximilian Klietmann, VP of Marketing, LSN

Max Smile 2Licensing deals comprise one of the most important aspects of the life sciences industry. However, many entrepreneurs fail to properly research the trends around biotech licensing, despite how critical these trends are to anyone seeking partnershipsor capital from big pharma. LSN’s Licensing Deals Database curates publicly available licensing deal data from around the world. A search for information on the past three years yields approximately 100 licensing deals for each year (99 in 2011, 101 in 2012, and 100 in 2013). This allows us to get a sense of some of the trends surrounding big pharma licensing activity, and what the data could mean for emerging biotech executives in 2014.

Increasing Early Stage Focus:

One of the most immediate trends shown by the data is an increased early stage focus as a percentage of deals. This reflects the trend of big pharma relying more heavily on in-licensing to augment R&D pipelines that LSN discussed in late 2012, when it was first emerging. Given the data and conversations LSN Research has had with several big pharma search and evaluation groups, this trend will most likely continue over the course of 2014, as big pharma continues to look at in-licensing as a source of innovative science to shore up pipelines.

chart deals

Oncology and Other Major Indications Remain Hot: 

When it comes to trends surrounding specific indications, oncology is by far the leader. This indication area has consistently represented about 30% of licensing deal activity for the last three years in a row. This is good news for early stage companies in the space, as big pharma isn’t showing any signs of decreasing activity in this disease area. One good angle of attack for emerging biotech companies may be to position themselves with non-traditional approaches to cancer (for example, the increased buzz surrounding immunotherapies for cancer). Runners up in indication popularity are CNS and infectious diseases.

So What Does It Mean?

For early stage companies, this trend is welcome news. Resources and capital that were formerly out of scope for an emerging entrepreneur are becoming tangibly accessible. Also, the consistency of indication focus over the past three years shows stable demand for certain products, giving entrepreneurs some predictable trends to watch. The key is finding the right strategy for targeting these investors, and beating the competition to the punch.


Navigating Big Pharma: A Guide For Entrepreneurs

30 Jan

By Alejandro Zamorano, VP of Business Development, LSN

Alejandro 10*10

Every major pharmaceutical company has a business development team that is in charge of identifying new products and technologies to target for strategic relationships, in-licensing, or acquisition. We’ve discussed the increasing number of big pharma companies targeting earlier stage companies before, and we’ve noted how big pharma is allocating more dollars towards external R&D. These organizations can be extremely attractive to entrepreneurs because they offer a plethora of great resources including technical insight, market expertise, and fantastic infrastructure (not to mention highly sophisticated sales and marketing).

However, for many emerging biotech entrepreneurs, the challenge of navigating a big pharma to find the appropriate contacts is daunting and can be discouraging if approached blindly. This article is intended to share some insight into how to approach these organizations and how to navigate your way through to the right people.


So how should a fundraising executive begin thinking about a big pharma strategy? The first thing to understand is that business development teams are interested in talking to great innovative companies. However, in order to be effective, you must first find all of the big pharmas that are a fit. Often, big pharma sees the world on the basis of indication areas (e.g. an oncology program, or a CNS program), so a focus on a specific indication is typically a good starting point. To find out this information, take a look at press releases, announcements, news articles and of course the company website. With this information in hand, you can narrow down which companies are actively likely to be seeking to in-license or invest in products like yours.

Your next step is identifying the right people in the organization. Big pharmaceutical companies can have tens of thousands of employees around the world, so it’s up to you to do your homework on who to target. Sometimes you can quickly identify the right target on the company website, but usually a little more digging is required. Searching through linkedin or Zoominfo can be helpful in identifying the right people. Try using combinations such as “search & evaluation,” “business development,” or “asset licensing.” A little creativity and patience can go a long way. Aim for a list of at least 20 or so target individuals.

This is where email your email skills come in. We’ve covered the nuances of email marketing previously, but we’ll briefly cover the concept here. The goal of your first email should be used to initiate dialogue, identify the right person to speak with, and hopefully arrange an introductory meeting. Some best practices are keeping your message clear and succinct and clearly state that you have done your research and believe there may be a fit. Be sure to make it clear you’d like a meeting with the appropriate person, and offer some available times.

If all has gone well, you’ll probably get a handful of responses or referrals to other people in the organization. However, don’t forget about those that didn’t reply – you can come back to these with “second attempt” or “final attempt” emails later to create a sense of urgency. The first person you hear back from will often be either a gatekeeper or an information gatherer. These parties will take a first pass on whether or not the conversation should continue. Clearly explain what research you’ve done, confirm your findings, and why you think you are a fit. Big pharma usually has a clear idea of what they are looking for, so explaining why you match their interests is crucial.

If the conversation goes well, you’ll likely be passed on to a navigator (someone who will help guide you through the evaluation process) or an evaluator. The evaluator(s) will examine your data and will ask you questions about your asset to determine whether it should be passed up the chain of command. If your product matches what the company is looking for and has passed the evaluation criteria, you will be recommended to the decision maker. This can be a single person or a group of senior executives. They are the ones with the final authority to get a deal done and write you a check.

Here are few concluding thoughts to help your efforts: First, make sure you are proactive and do not let things sit idle: Always find out what the next steps are and how to get to the next person in the chain. I’ve heard countless stories of entrepreneurs losing focus and letting the conversation go silent. This is almost always the kiss of death, so remember that it is your responsibility to move things forward. Second, do some research on other companies that recently struck a deal with one of your target pharmas. Asking for guidance or insight from them may help you be more prepared. Keep these items in mind and you’ll significantly improve your odds when approaching big pharma.

Hot Life Science Investor Mandate 1: Family Office Seeking Platform Technologies

30 Jan

A single family office in the US is currently seeking to invest in platform technologies. The firm manages approximately $4 billion in assets with $600 million dedicated to life science investing. The family office is currently allocating out of its 7th fund, a $100 million dollar fund that closed in 2012. Typical investments range from $1-$2 million to $25-$40 million depending on deal stage. The firm prefers to make controlling investments and has an average holding period of approximately 8 years.

The family office primarily invests throughout the United States although they have made investments outside the US in the past. Companies In the therapeutic space developing platform technologies are of primary interest. Companies developing single assets or medical devices are not of interest. The family office is open to considering platform companies from all stages, sizes and indications although they are especially interned in areas of Cell and Gene Therapy, Synthetic Biology, CNS, Neurology, and Orphan Indications.

The family office is looking for companies with experienced management teams and is open to investing in both public and privately held companies.  Companies that previously failed a trial or have incomplete management teams and need re-organization are also of interest. The family office is a very long term hands on investor that looks to add value in addition to capital, thus it almost always acts as the lead in any investment rounds.

Hot Life Science Investor Mandate 2: Virtual Pharma Seeking Small Molecule & Peptide Therapeutics

30 Jan

A family office-funded virtual pharma company in the US is looking to make 2 equity investments of $5-$6 million into early stage biopharmaceutical companies over the next 6-9 months. The firm prefers to invest into companies located in the North Eastern United States. The firm also plans to utilize its parent company’s efficient development program to develop a data package that will be the basis for a license/partnership with a larger company.

The firm is primarily interested in Therapeutics companies with particular interest in small molecules and peptides. The firm is opportunistic in terms of indication and will consider orphan and niche diseases however there must be a significant unmet medical need for the product to be considered. In terms of phase of development, the firm is not interested in companies in the discovery stage and will only consider companies that are at least well involved in animal trials and looking to move into human trials within a short timeframe. The firm will also consider investing into companies that are in clinical trials up to Phase IIA. Ideal companies will have a clear path ahead of them in terms of proving biological activity and/or efficacy well accepted endpoints or surrogate markers in clinical trials.

The firm is only looking to invest in virtual companies. The firm is also looking to have an active role on the company’s management team. While the firm is not looking to replace the original management, they are not looking to be a passive investor either.


Hot Life Science Investor Mandate 3: VC seeking early stage companies in US & EU

30 Jan

A venture capital company formed in 2005 with offices in the East and West coast is currently seeking to invest in the life science space. The firm currently manages two funds with its most recent fund having closed at $450 million in 2007. The firm is looking to make equity investments ranging from $10-$25 million over the lifetime of the investment. The firm looks for companies primarily in the United States, and some select opportunities in Europe. The firm plans to make between 1-5 investments over the next year.

The firm is interested in sectors of Biotech Therapeutics, Diagnostics, Medical Devices, Life Science Tools and Healthcare IT. In the Therapeutics space the firm is looking for both small molecule and biologics companies that are 1 year from entering clinical trials or later with a preference for companies that have in human data. The firm is generally open to all indications but is especially interested in areas of Oncology, Immunology and Orphan Diseases. For Medical Devices, Diagnostics and Life Science Tools the firm prefers to make later stage investments into companies that have significant in human data or have already been commercialized.

The firm is looking for experienced management teams and generally requires a board seat. The firm looks to take company through significant value inflection points acting as a very hands on investor. The firm almost always leads or co-leads investment rounds.

See It For Yourself! LSN Investor Database Demo

23 Jan

By Mengwei Hu, Marketing Manager, LSN

Nono 2LSN’s marketing team is proud to release a digital demonstration of the LSN Investor Database! For those in our readership who are unfamiliar, the LSN Investor Database is a web-based matching platform for companies seeking to raise capital in the life science arena.

LSN tracks 5,000 life science investors globally. These investor profiles are maintained by LSN’s research staff, who update these investor profiles through 1-on-1 investor interviews every 90 days. Using LSN’s proprietary search ontology, emerging therapeutic, diagnostic, and medical device companies can quickly target investors that may be a fit for their offering.

Click the video below to see how the LSN Investor Database may be able to help your fundraising efforts.