Archive | September, 2015

Seeking Capital? Learn A Little Sales (There I Said It)

24 Sep

By Dennis Ford, Founder & CEO, LSN 

Dennis book

Five years ago, the universally accepted investment path was to write a proposal for grants, hit up a list of friends and family, and canvass the local regional angel groups to help get you on your way to commercialization. After the first wave of funding, the second wave was to canvass the venture capital entities or find strategic partners, each coming with their own unique set of challenges and outcomes.

The good news is the investor landscape has morphed and the goal of enlightened scientist entrepreneur should be to find the investors that are a fit for his or her technologies sector and stage of development. This entails putting aside some of the old dictums regarding fundraising and separating the facts from fiction as it applies to fundraising today. Let’s dispel some of the out-of-date notions regarding fundraising and commercializing technology. Below are some of the old myths that circle in and out of the conversations around funding updated for how the reality has changed. A lot of these items below setback scientists before they even have a chance to get into the game.

The old myths

The funding choices are limited to SBIR grants, friends & family, angels, VCs and strategics.

  • Update: There are 10 categories of investors to go after.

You must limit yourself to regional players.

  • Update:It’s a global marketplace and once you get past the regional angels and VCs, its global.

The average fundraising process takes 6-9 months.

  • Update:After interviewing more than 300 firms, LSN has uncovered that it generally takes 9-18 months from start to finish.

It is not necessary to understand how each category of investor works, just go after them all.

  • Update:Each investor category has its own personality, strategy, and motivations. Knowing the nuances and subtleties of each is imperative.

The science/technology is the only thing that matters to healthcare investors. You can convince or finesse an experienced investor with your science.

  • Update: Investors buy you, your team, and your technology. It is imperative to showcase you and your team in your marketing materials as well as your technology.

Scientist entrepreneurs are smart people; therefore you should scale based on your technical knowhow and prowess (founder blindness).

  • Update:Basic marketing and sales skill-sets are needed.

A scientist’s empirical training should augment and compliment the overall effort when moving into the commercial arena.

  • Update:Some capability translates but you need to augment your knowledge with experienced professionals to build a well-rounded team.

Science is the hard part and it is easy to learn the business side.

  • Update:Both science and business are complex disciplines that need to be learned.

You need to be referred to an investor in order to get a meeting.

  • Update:Investors care about fit for their investment mandates. Referrals help, however being a fit for what the investor is looking for is crucial and enough to get meeting.

Scientists are the rock stars and don’t need the business executive on the team.

  • Update:Having a business person with the technology mavens creates a well rounded team.

The major revelation to understand is that when you step out of the laboratory, you have entered a world that does not necessarily play by the rules of the scientific method or basic and applied research. You are entering a fuzzy world where learning to create dialogue and foster relationships are as important as having replicable data. You leave the analytic domain and head into the world of the” buyer”— potential investors and partners — and the “seller”—you. Like it or not when you are raising capital you have to start by marketing your product, your team, and your company. When you are sitting across the table from a potential investor you are selling yourself. Welcome to fundraising 101!

Call for Innovation: RESI San Francisco, January 12, 2016

24 Sep

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

Shaoyu 10*10

Life Science Nation is calling on innovative early stage companies to present at the next Redefining Early Stage Investments (RESI) conference. RESI will bring together over 200 active early stage investors for a one day partnering event and is accepting applications from emerging companies developing therapeutics, diagnostics, medical devices, and healthcare IT products to participate in a technology showcase on January 12, 2016.

If you are one of the 30 companies selected by our in house scientific evaluation team, you will be given full-day exposure to investors and potential partners in the exhibit hall, through a poster display, allowing for the creation of meaningful dialogues. Unlike traditional 5- to 15-minute pitch presentations that do not allow any real one-on-one interaction and provide no actionable feedback from investors, the RESI Innovation Challenge enables executives to pitch directly to attendees, which can generate more in-depth and frequent conversations with investors throughout the event.

The RESI Innovation Challenge winners are declared by accumulating “RESI Cash” votes. Each attendee receives “RESI Cash” to “invest” in the Innovation Challenge companies with the most exciting technologies. If you are a fundraising entrepreneur work with therapeutics, medical devices, diagnostics or healthcare IT and you think you have what it takes, apply now.RESI-SF-2016-RESI-Innovation-Challenge

Diagnostics Investors Speak to How They Are Looking at Opportunities

24 Sep

By Christine A. Wu, Research Analyst, LSN

chrsitine

What defining elements make a diagnostic company stand out? What do diagnostic investors look for and why should the healthcare marketplace care about diagnostics? What should these companies do to get their foot in the door of these investors? These are the types of questions our Diagnostic Investors panel answered at our RESI Conference in Boston last week.

Moderated by Parker Cassidy, Executive in Residence, RA Capital, the audience got to hear from:

The panel revealed the key elements they seek when evaluating a diagnostic company and the reasons behind them. Together they discussed four main criteria—the impact in the healthcare delivery marketplace, the regulatory and reimbursement pathway, the “push” and “pull” from investors and clinicians, and the ability to prove positive patient impact with the tests results—before closing with advice for fundraising companies.

Diagnostic companies can get their product on the market faster, according to Steuart. The attractiveness of diagnostics is that they “capture a disease before it gets bad and expensive.” Cunningham further explains the general desire in healthcare to invest in huge pain points, yet the difficulty of finding diagnostic opportunities that directly address those pain points and really drive change. There is a big explosion in testing in oncology now, in which predicting difficult cancers early while they are still treatable is huge and will continue to grow in the diagnostics space. The argument of course will always be whether finding certain cancers earlier will improve chances of length of survival, Cunningham points out.

Diagnostic investors look at every obstacle to a successful product. Williams explains that regulatory and reimbursement bodies are not subsiding as much in the diagnostics space, and as an entrepreneur that needs to be expected. Because of the tough reimbursement landscape, investors want to know if the technology will take money out of the system or drive cost. “If the payer thinks it will open a bunch more people up to confirmatory procedures they are going to pay for, then that’s a mountain to climb over,” Cunningham explains.

Then there is the push and pull dynamic, the final hurdle that a company faces that is often overlooked but can actually be the most costly. Companies and their investors push their technologies through reimbursements and regulatory approvals. Yet the “pull” from the clinician that will be administering the test is a keystone to the strategy. “Just because you get the ‘push,’ doesn’t mean the clinicians will ‘pull,’” Williams describes. Williams has worked with a number of companies that have spent far more money on getting key opinion leaders (KOLs) to pull products than on the development of the technology. “If you can get the key opinion leaders and physicians on board, you are golden.”

Summer finishes that among it all, investing in the diagnostics space is all worth it. Companies just have to know how to prove the impact of its worth. Steuart provided the example of Genomic Health, a diagnostic company with an assay that paved its way via studies and endorsements with KOLs that by the time they went to CMS, they had a pharmaco-economic study to prove that they were worth millions of dollars.

To close, here are two pieces of advice from our panelists’ when fundraising:

Come prepared – You must completely understand and follow the money: who owns the patient, who is getting the benefit, and who is paying for the benefit. You cannot just come with better patient outcomes. Once you reach a certain threshold, you need to come prepared with friends, such as clinical advisors and KOLs. Practice your pitch with people who you will never invest in you, then once you’ve mastered it, pitch to those who will actually invest in you.

Most importantly, tell a story – Cunningham describes (followed by applause), “For any of us, you have a few minutes to capture our attention. You must inspire vision and tell the story to get people to see the vision and follow it. I want to go on that journey with you.”

Hot Life Science Investor Mandate 1:Corporate Venture Capital Fund Seeking Therapeutics Investments

24 Sep

A corporate venture capital fund of a large pharmaceutical company is currently investing from its second fund of $100M. The firm invests in early-stage biotechnology companies focusing on discovering and developing human therapeutics primarily in the areas of the current therapeutic interest to its parent company. The firm typically invests (equity) $3-$4M per round with $10M reserved for follow-on investments. The firm seeks companies that are based in the US and Europe. The firm seeks to make about 2-3 allocations in the next 6-9 months.

The firm seeks early-stage companies developing human therapeutics. The firm is seeking companies with products in pre-clinical to phase II. The firm’s therapeutic areas of focus are: Cardiovascular (Acute Coronary Syndromes, Dyslipidemia, Heart Failure); Hematology (Anemia, Neutropenia, Stem Cell Mobilization); Inflammation (Asthma, Bowel Disease, Multiple Sclerosis, Osteoarthritis, Psoriasis, Rheumatoid arthritis, Systemic Lupus Erythematosus); Metabolic Disorders (Diabetes, Osteoporosis); Nephrology (Hyperparathyroidism, Renal Failure); Neuroscience (Alzheimer’s Disease, Cognition, Pain-Neuropathic & Inflammatory, Parkinson’s Disease, Schizophrenia); and Oncology. The firm is also interested in drug delivery therapeutics and Healthcare IT.

The firm seeks a company with a strong and experienced management team or technical experts in the relevant technology.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com

Hot Life Science Investor Mandate 2:Hong Kong Based VC Seeking US Based Life Science Investments

24 Sep

A venture capital founded in and based in Hong Kong, Shanghai, Beijing, and Suzhou, China has invested in nearly 50 healthcare companies in China and the U.S. across all sectors of life sciences from pharmaceuticals and medical devices to healthcare IT and diagnostics. The firm typically leads investments, though is also open to co-investing. The firm typically makes equity investments ranging from $1-$35 million, and currently has $1.7 billion in total assets under management, with their latest fund raised in 2014 at $500 million. The firm seeks to make 20-30 new investments within the next year, with a geographical focus in China. The firm is open to opportunities in the US, as the firm recently closed deals in Boston, San Francisco, and Los Angeles.

The firm is open to all sectors and subsectors in the life science space – biotech therapeutics, medical devices, diagnostics, and healthcare IT. The firm mostly invests in 510K devices due to its faster turnaround, but will also invest in devices in the PMA pathway depending on its stage. In therapeutics, the firm is interested in all subsectors including small molecule, biologics, cell therapy, and biosimilars. The firm invests in therapeutics that are past the pre-clinical stage at Phase I to on the market, as well as medical devices that are either at the clinical stage or on the market. The firm is also interested in lab equipment and drug development enabling technologies, and is open to all indications.

The firm prefers a company with a strong management team with experience in the space. The firm will help the company fill spaces in the team if necessary, and will typically take a board seat after an investment.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com

Hot Life Science Investor Mandate 3:VC Fund Seeking Life Science Companies With Advanced Material Technologies

24 Sep

A VC fund based in the United States The firm invests in advanced materials technologies across several sectors, including life sciences. The firm is generally a lead investor, and commits up to $8 million per opportunity; investments may be tranched, with an initial commitment of $2-3 million. The firm is open to opportunities globally and has a partner based in Japan, but the firm primarily invests in North America.

The firm is interested in life science companies developing advanced material technologies. In the medtech sector, the firm is oriented toward diagnostic and delivery technologies (including both in vivo and ex vivo delivery); the firm is also interested in advanced materials technologies used in biotech R&D. Areas of interest include biomaterials, drug discovery tools, purification and separation techniques, electrochemistry, nanotechnology, microfluidics, and optics. In diagnostics, the firm is interested in new diagnostic applications of materials science including in sample collection, rapid tests, and biosensors used for real time monitoring; microbiomic diagnostics are also of interest. In addition to the aforementioned areas, the firm is interested in ‘blue sky’ applications of materials science in the life sciences.

The firm does not invest in products that are regulated as therapeutics; in the device space the firm is open to investing in 510k devices, but not PMA devices. However, the firm prefers to invest in technologies that do not require FDA approval. The firm invests in companies that have strong proof of concept data supporting their advanced materials. The firm is open to investing in companies that do not yet have products on the market.

The firm favors companies with partner-based business models, eg. companies developing an enabling technology that a larger partner will deploy to develop a new product. The firm has deep expertise in manufacturing; additionally, LPs include large pharma and medical device manufacturing companies, and the firm helps portfolio companies develop relationships with these strategics.If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com

Hot Life Science Investor Mandate 4:VC Arm of Taiwanese Conglomerate Seeking Near Commercial Stage Medical Technology Investments

24 Sep

The venture capital arm of a Taiwanese financial conglomerate with about NT$ 2 trillion (USD 31 billion) AUM is looking to invest in the biotechnology, and medical/healthcare and IT sectors. Typical equity allocations range from US$1-3 million and can be up to US$5 million. Historically the firm mainly invested in early-late stage companies in Taiwan, however currently the firm is actively seeking new investment opportunities from North America and Europe.

Within healthcare, the firm is interested in all sectors of medical technology, including both consumer and non-consumer products. The firm is agnostic to indications. The firm is less interested in therapeutics, but it would consider drug reformulation. The firm looks for products that are ready for commercialization or at the commercial stage and seeking growth/expansion capital.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com