Archive | December, 2014

Year-End Roundup: Investor Mandates

18 Dec

By Michael Quigley, Director of Research, LSN


This year was by far LSN’s best for new and updated investor mandates. LSN curates information profiles on approximately 5000 global early stage investors. Thus far in 2014 we have been able to add an additional 650 new unique profiles gained through one on one interviews with life science investors.  These investors spanned 33 countries and all 10 investor categories. (See Figure 1.)


Mike Figure 1

Figure 1


As a result of LSN Research’s focus on early stage life science investors, the majority of the firms we spoke with in 2014 were making maximum allocations in a range of $5 million to $14.9 million. (See Figure 2.) However, it is also worth noting that many investors were seeking to make larger and smaller allocations. When seeking funding, understanding the potential investment size investors are looking to make in a given round is a huge factor regarding fit. You don’t want to waste your time chasing investors whose allocation size is way outside the range for your round.


Mike Figure 2

Figure 2


Also crucial to the determination of investor fit are the sectors that investors are looking for and that companies are working in. Consistent with our monthly mandate roundups, medical devices attracted the most interest during this year. (See Figure 3.) However, it is also worth noting that, and as we have discussed previously, 59% of the investors we have spoken with were open to investing in both medical devices as well as therapeutics and diagnostics. This overlap is a result of the many opportunistic investors who wish to cast a large net to ensure they get to see all the best possible opportunities in the life science ecosystem. Although oftentimes investors may not have domain mastery over your type of technology, they more than likely are well connected with people who do. These advisors work with investors to help them vet deal flow for scientific and commercial viability.


Mike Figure 3

Figure 3


Where your company is located is also a factor when determining investor fit. The U.S. garnered the majority of investment interest, followed by investors who were willing to invest globally. (See Figure 4.) Many investors now have multiple locations to help in securing deal flow from around the world, while others use their networks as well as LSN to gain access to deals beyond their backyard. We have noticed the globalization of the investment community for some time now; investors are increasingly realizing that location is not necessarily a proxy for commercially viable scientific innovation.


Mike Figure 4

Figure 4


Investors tend to be less opportunistic regarding the development stage of the product. Investors in both the therapeutic and diagnostic space as well as the medical-device sphere have had the highest level of combined interests in products with some clinical data. (See Figures 5 and 6.) This is likely a result of the massive inflection point that many products experience once they have viable in-human safety data and begin to develop human efficacy data. This can cause the large jumps in a company’s valuation that investors are so attracted to.


Mike Figure 5

Figure 5


Mike Figure 6

Figure 6


Notably, investors’ interest in indications showed approximately only a 6% difference between the most popular and least popular indications. (See Figure 7.) This is a likely result of the large number of venture capital and private equity investors we track in the space who tend to not be as focused on indications as investors in family offices, corporate venture capital firms, and foundations. Despite this fact, it is still intriguing to note variations, however slight, from indication to indication. Neoplasms, cancer, and oncology reign supreme in terms of investors’ interest, with their massively unmet medical needs representing a huge potential market, while pain and inflammation represent the lowest level of interest from investors given a more crowded market and often subjective clinical endpoints.


mike 7

Figure 7


The product phase of development, location, and technology type appear to be the largest determining factors of investor fit although all variables have merit. Of all the life science investors that we have spoken with over the course of 2014, these areas held the most variation.

We look forward to uncovering and keeping you abreast of the new mandates we uncover in 2015, and we wish you all a happy holiday season and a joyous new year!

Year-End Roundup: Pharma Licensing Deals

18 Dec

By Lucy Parkinson, Senior Research Manager, LSN

lucy 10*10In recent years, big pharmaceutical companies have filled their pipelines by turning to smaller partners to find innovative products, and 2014 has been no exception. This year has produced so much dealmaking news that you may have lost track of all the new partnerships. But we’ve dug into the LSN Licensing Deals Platform to examine the key data points from the year’s pharmaceutical licensing activity.

Preclinical and Phase II Deals Dominated

Although about a quarter of the licensing deals LSN tracked involved a drug discovery platform, the rest were focused on one or more clinical assets. Of these deals, most were inked either during preclinical development or in Phase II. (See Figure 1.) It’s common wisdom that most assets find a partner in Phase II, but this data demonstrates that it’s important to think about a strategic partner even before entering the clinic.


Lucy Figure 1

Figure 1


Cancer Was the Top Indication

More than a third of the deals that we tracked involved assets in the cancer space. (See Figure 2.) This is perhaps unsurprising as such a huge amount of innovation is occurring in this field. Although many deals have taken place in other indication areas—such as CNS disorders, infectious diseases, and blood and immune diseases—the number of deals hasn’t even come close to the level in the oncology space.


Lucy Figure 2

Figure 2


Gene therapy and immunotherapy enter pipelines, while antibodies and drug delivery remain strong

The LSN Licensing Deals Platform also includes information on the compound type and technological approach of the assets that the deal concerns. Although a huge variety of innovations—including those in the areas of opioids, antisense technologies, and many different types of inhibitors— have been the basis for partnerships in 2014, a few areas stand out.

Antibodies were the largest single field for pharma dealmaking in 2014, comprising 18% of all deals tracked by LSN. Drug delivery technologies, of perennial interest to pharma companies, were the subject of 11% of deals, most of which concerned oral formulations. The emerging field of immunotherapy also made an impact on the deals landscape, with 8% of partnerships involving immunotherapy or immunomodulation. It’s also exciting to see that gene therapy and mRNA therapeutics are making their way into pipelines; these two technology types were the subject of 7% of deals.

Who Came to the Table?

The names of the most active pharma dealmakers in 2014 are unlikely to surprise you. Among the licensing deals LSN tracked, Merck’s name appears on the greatest number of agreements, closely followed by other familiar names, including Johnson & Johnson, Roche, Sanofi, and AstraZeneca. (Note that LSN’s Licensing Deals platform doesn’t include corporate acquisitions, which account for additional flow into the pipelines of big pharma companies.)

However, behind these well-known strategic partners lies the long tail of dealmaking. LSN recorded deals made by 48 licensees all over the world, of which the majority announced only one licensing deal. Even this figure represents a minority of active licensees; in the LSN Investor Platform, we found 108 groups that are actively seeking licensing opportunities.

If you’re looking for a partner for your therapeutic asset, you would do well to keep your horizons wide and execute a partnering outreach strategy that looks beyond the most active, big-name pharma companies.

RESI Double Angel Panel Announcement  

18 Dec

By Tom Crosby, RESI Conference Manager, LSN

Tom 2Angels represent an extremely important pool of capital for a fundraising entrepreneur, especially now that they have begun syndicating and participating in larger financing rounds. To help RESI attendees better understand how to receive an allocation from an angel, LSN has assembled two top panels of accredited investors — one session focused on biotech investments and the other on medical device opportunities.

The Biotech Angel Groups sessions will be moderated by Bill Whitaker, Managing Director, Co-Chair Life Science Section, Golden Seeds, and will hear from:

Brian Frenzel, Member, Band of Angels

Karl Handelsman, Member, Board of Directors, Life Science Angels

Bernie Rudnick, Managing Director, Mid Atlantic Bio Angels

Barbara Nelsen, Member, Sofia Angels

The Medtech Angel Groups sessions will be moderated by Allan May, Managing Director, Life Science Angels, and will hear from:

Karen Drexler, Founder, Astia

Randy Barko, Member, Hub Investment Management Group

Steven Pollitt, Board Member, Sand Hill Angels

Richard Koffler, Board of Directors, Tech Coast Angels

These sessions will help scientist entrepreneurs understand the perspective of the angel. Angels will explain their investment preferences, and those of their respective syndicates (when angels band together). What sectors are most attractive to angels? How does an angel group filter, evaluate and parse the plethora of deals that surface?

Other topics of discussion will include their criteria for management team, stage of technology, and whether there is a preference for regional or global firms. What is the difference in presenting to an angel group versus a traditional one-on-one investor meeting — and how does the vetting process work? If you’re looking for angel capital to move your technology forward, don’t miss this session of expert insight at RESI.

Hot Life Science Investor Mandate 1: Corporate VC arm of Two Healthcare Providers Seeking Healthcare IT and Tech Enabled Devices

18 Dec

The corporate venture capital firm that is funded by two substantial healthcare providers makes private equity investments of strategic interest to the systems medical centers and affiliated physicians. The firm makes investment ranging anywhere from $1-$8 million over the life of the investment with the majority of allocations falling in the $5-$7 million range. The firm manages an evergreen structure and is actively looking for new opportunities throughout the United States.

The firm is currently interested in healthcare information technology, tech-enabled medical devices and tech-enabled healthcare services. For medical devices the firm is focused on tech enabled devices and is highly interested in areas of patient monitoring and wearables, among other areas. The firm is also interested in highly innovative hospital hardware and devices that have the potential to significantly lower the cost of the point of care process. The firm generally invests in companies in the series A and B rounds.

The firm is looking for companies with experienced management teams. The firm looks to act as a strategic investor generally taking a board seat. The firm is very open to syndication and general invests along with other institutional investors.

If you are interested in more information about this investor and other investors tracked by LSN, please email

Hot Life Science Investor Mandate 2: Angel Group based in Northeastern US Seeking Early Stage Life Science Opportunities throughout the US and Canada

18 Dec

An angel network based out of the North Eastern United States looks to make equity investments in early-stage and selectively seed stage life science companies ranging from $.5 – $1.5 million. The firm is also open to syndication on larger deals and will consider opportunities throughout the United States and Canada. The firm plans to allocate to 10 new companies over the next year. The group is open to sectors in the life science space including therapeutics, diagnostics and medical devices. The firm is generally opportunistic in terms of technology type, indication and is open to both small molecules and biologics. The firm is comfortable in investing in series A, B, C, or D rounds and is willing to invest in technologies that are pre-clinical or in early clinical trials. The group is most interested in investing in companies with experienced management teams though they also consider spinouts from universities in certain situations. The firm looks to invest in privately held companies and generally takes a seat on the company’s board. If you are interested in more information about this investor and other investors tracked by LSN, please email

Hot Life Science Investor Mandate 3: Chinese Venture Capital Firm Seeking mHealth, Gene Sequencing, Immunotherapy, Stem cells, and Antibody Therapeutics

18 Dec

A venture capital firm based in China makes early-growth stage investments in the life science sector, preferably in series A and B; the firm may also consider series C opportunities. The firm typically invests RMB 100 million (USD 16 million) or more per company. The firm prefers to invest in companies based in China, but is open to outstanding opportunities from around the globe. The firm is actively seeking new investment opportunities.

In the life sciences, the firm is most interested in mHealth, gene sequencing, immunotherapy, stem cells, and antibody therapeutics. The firm is indication agnostic. The firm is also opportunistic to other cutting edge technologies in the healthcare industry. The firm is open to investing in companies in the pre-clinical phase of development as well as those that have clinical data.

The firm seeks a strong and experienced management team and generally looks to take a board seat following investment.

If you are interested in more information about this investor and other investors tracked by LSN, please email

Diagnostic Landscape: Imaging and In Vitro Technologies

11 Dec

By Shaoyu Chang, MD, MPH,  Senior Research Analyst, LSN

Shaoyu 10*10The global diagnostics market continues to show robust growth, fueled by aging populations and rising awareness of the value of preventive care. In our recent series of articles, we’ve explored the therapeutic space for cardiovascular diseases, neurology, and oncology. This week, we dive into the diagnostics innovation and investor landscape.

Two major categories stand out in this space: diagnostic imaging devices and in vitro diagnostics (IVD). Diagnostic imaging devices claimed a global market of US$25.7 billion in 2013, with an estimated annual growth rate of 5.7% for the coming six years.[i] More impressively, IVD claimed a US$47.3 billion global market in 2013, with an annual estimated growth rate of 7.3%.[ii]

Practitioners use a variety of diagnostic imaging technologies, such as X-rays, CT scans, MRIs, PET scans, and ultrasounds, to rapidly determine a medical issue with minimal discomfort for patients. A wide spectrum of IVD technologies, such as point-of-care tests, molecular diagnostics, and hematology tests, can be used to detect or monitor various disease indications in both healthcare and home-care settings.

The LSN company database is currently tracking more than 2,500 diagnostic assets globally. As shown in Figure 1, 86% of the imaging assets that we track are approved and on the market. These mature technologies are dominating the imaging market, so innovators are exploring new territories, such as portable and handheld imaging devices and cloud-based digital systems to process, store, and transfer medical images. By contrast, IVD shows more innovation thanks to the past decade’s advances in biology, genomics, and biomarkers for various disease areas.


Figure 1


Diagnosing infectious diseases, such as hepatitis, respiratory infections, HIV, and food-borne illnesses, has created a strong demand for diagnostic tools, which is clearly reflected by the data gathered by LSN’s research team and shown in Figure 2. Recent scientific and technical advances are bringing exciting innovations to this field. Examples include microbiome analytics and point-of-care tests that have a wide variety of applications in healthcare institutions and consumer self-care and low-resource settings.

Cancer accounts for the greatest number of assets in development. Cancer diagnostics innovation is partially fueled by personalized medicine and by companion diagnostics that use novel biomarkers to detect traces of tumor cells and differentiate cancer genotypes.

Neurology is a space with a significant amount of product development underway, led by R&D efforts in Alzheimer’s disease and brain imaging technology. Maternal health and cardiovascular diseases have less innovation. Although these areas may present opportunities for innovative companies, they will face a market saturated by well-established products.



Figure 2


As shown in Figure 3, the U.S. leads other counties in terms of the number of diagnostic companies. Although Western European countries play significant roles in diagnostics, China claims a strong second place with a robust diagnostic industry. As discussed in a previous article, an increasing number of large diagnostic companies in established economies are seeking to penetrate emerging markets though M&A activity. The global diagnostic landscape is changing rapidly, and it is fascinating to watch this space evolves.



Figure 3


Let’s take a look at the investors in this space. LSN analysts have interviewed more than 500 investors who are interested in imaging and diagnostic devices. As shown in Figure 4, many traditional investors, including venture capitalists, private equity firms, and angel groups, find diagnostic devices attractive because of their short regulatory pathway to commercialization. Pharmaceutical corporate venture capital funds are looking for diagnostic assets to diversify their portfolios. Interestingly, several large corporations in industries other than life science, such as telecommunications and industrial supplies, are also considering using diagnostics and analytics as an entry point to the healthcare arena.



Figure 4


Contrary to the common notion that most investors are regional and only invest in nearby assets, globalization is occurring in the diagnostics investment space, as shown in Figure 5.


Figure 5



Global investors—investors who are active in two or more regions—are leveraging their expertise and extensive network to identify and develop new assets in emerging markets. In addition to raising capital, companies that partner with global investors can sometimes receive assistance navigating regulatory systems and gain a stepping stone into unknown markets. Cross-regional cooperation has become increasingly commonplace, and we expect the trend to continue in the future.

[i] Medical Imaging Systems Market (Portable, Handheld X-Ray Devices, CT, Ultrasound, Open and Closed MRI and Nuclear Imaging, Analog, DR, CR, 4D and 5D, Low Slice, Medium Slice, High Slice Scanners) Analysis and Segment Forecasts to 2020, Grand View Research, June 2014.

[ii] Analysis of the Global In Vitro Diagnostics Market, ReportLinker, July 2014.

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