Archive | January, 2017

Canada’s Life Science Landscape

26 Jan

By Cole Bunn, Senior Research Analyst, LSN

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As we look forward to 2017, there is certainly a lot of speculation regarding how the biotech sector will fare in the wake of a lackluster 2016 for public market performance, M&A transactions and venture funding for life science/healthcare companies, not to mention the intense pricing pressure drug makers are now facing. All things considered, most biotech folk are optimistic on what the new year will hold for the life science startups and the healthcare sector as a whole.

One geography that may be uniquely positioned to take advantage of these potential tailwinds is Canada, with its rapidly developing life science hubs. As we gear up for the second RESI conference at the MaRS Discovery District in Toronto on April 4, 2017, we wanted to take a closer look at what’s going on in the Canadian life science scene.

Taking a sample of Canada data from the LSN Company Platform, we can assess the most popular sectors for life science startups in Canada’s top three most populous cities.

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Medtech was the most represented sector. There are a couple of different possible reasons for this: 1) medical technology is a fairly broad term and there tends to be some overlap with digital health given that underlying a lot of medical devices, primarily the newer ones, is a software component; 2) generally speaking, the amount of capital required from inception to commercialization for a medical device tends to be considerably less than for a biopharmaceutical product due to fewer and smaller clinical trials, and given that there are less venture and corporate dollars available for Canadian startups as compared to the U.S., entrepreneurs pursue less capital-intensive opportunities.

Taking a look at the LSN investor platform, the below data shows the percentage of investors in the U.S. and the rest of the world (excluding Canada) that have stated they are actively looking for technology in Canada.

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One thing we hear over and over from early-stage investors, particularly those based in the US East Coast or Silicon Valley, is that Canadian startups are attractive due to their reasonable valuations, as compared to valuations in traditional life science hubs such as Boston and San Francisco. Some U.S.-based investors are going as far as setting up offices in Canadian cities to take advantage of this fact. In addition, well-established VCs in the U.S. hubs see just about every deal out there, and are increasingly looking for innovation in less saturated areas. About half of the U.S. investors and investors in the rest of the world that are tracked by the LSN research team are looking to invest in Canadian startups.

As for the Canadian investors, about half of them are putting money to work only in their own country.

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We’re excited to bring the RESI conference back to Toronto for a second time and get a firsthand look at the innovation that is happening in this rapidly developing life science hub, as well as expose the technologies to a diverse group investors and strategic partners.

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Licensing Deals in 2016: Big Pharma Looks Earlier For New Assets

26 Jan

By Lucy Parkinson, Director of Research, LSN

2016 has been a mixed year for pharma, with new drug approvals well down from the 2015 highs, but major pharma firms continue to search outbound for the drugs of the future. The LSN Licensing Deals Platform provides detailed information on announced pharma deals, and this data allows us to take a look at the overall dealmaking landscape in 2016.

The LSN Licensing Deals platform doesn’t include M&A, and only covers deal announcements in which some financial information was stated, such as upfront and milestone payment amounts and/or a royalty percentage. In 76% of cases, the data includes an upfront payment amount; these varied considerably, with some preclinical deals providing under $1 million in immediate cash, and some Phase II and Phase III deals bringing in hundreds of millions.

Most 2016 Deals Were Preclinical

Among deals in which an asset stage of development was stated, preclinical assets were by far the most common, featuring in almost half of these deals. This figure has shot up since 2015. In an increasingly competitive arena, major pharma firms inked deals early.

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Oncology Remains Supreme, Digestive Interest Increases

In deals in which a single specific disease area was identified, oncology opportunities predominated, exceeding other major fields of medicine by several times over. In surprise second place came the digestive system, with a 50% increase in reported deals over 2015. Other popular fields include neurology, dermatology, ophthalmology and musculoskeletal disorders.

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Both New Innovations And Mainstays Attract Deal Interest

For many deals, the LSN Licensing Deals Platform describes the type of technology involved in the transaction. Some are widespread, while others are in a class of their own. There’s still a considerable amount of interest in antibody innovations, with over 20% of all deals involving an antibody. Antibody technologies were primarily either monoclonal or bi-specific antibodies, with several other types of antibody technologies being shopped, such as antibody-drug conjugates.

T-cell technologies (including CAR-T) continue to attract interest. However, so do kinease inhibitors, proving that this small molecule approach is not yet ‘yesterday’s science’ . Other technologies that remain sought after include RNA therapeutics and drug delivery technologies.

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There’s A Lot Of Fish In The Sea

As ever, you won’t be surprised by the names of the most prolific licensees in the dataset (it’s evens between Roche, Merck and Bristol-Myers-Squibb, with other well-known global pharma firms very close behind them). However, over 70 pharma firms, located in every corner of the globe, announced a licensing deal last year. If you’re looking for a strategic partner for your asset, it’s worth hunting beyond the top 10 or even top 50 largest firms. The LSN data platforms provide detailed information on potential development or exit partners far outside that mainstream.

RESI San Francisco Asia Pacific Investors Panel

26 Jan

By Shaoyu Chang, MD, MPH, Director of Research & Asia Business Development Liaison, LSN

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During JPM this year, close to 1,000 investment professionals from China gathered in San Francisco, according to unofficial statistics. What hot sectors are they looking for? How can you initiate and maintain a relationship with them? At RESI San Francisco, entrepreneurs and investors filled up the Asia Pacific Investors panel room to learn about the nuts and bolts of cross-border investment.

Moderated by Jimmy Lu, Managing Director, WI Harper Group, the panelists include:

Key takeaway points from the panel:

  • Chinese investors are pushed to look overseas by the following forces: asset price, scarcity of high-quality products, and scarcity of exit in the public market. Many of them are seeking one or more of the following factors from US early stage companies: cutting-edge technologies, large sales potential in their domestic markets, and access to the US market.
  • The Chinese government’s new currency restriction has impacted some transactions and created uncertainty in the future. Dual currency funds (firms that manage domestic RMB and offshore USD funds) are less affected.
  • To engage a Chinese partner, it is key to identify a ‘China hook’ of your product. Large patient population is only one factor. Regulatory process, medical practice, and reimbursement should also be considered.
  • A good partnership can come in different forms: direct investment, licensing, joint venture, M&A, etc. Entrepreneurs should work with experienced investors to form a partnership that is most suitable for their product sector and stage.

Hot Investor Mandate 1: Crossborder Fund Invests in Clinical-Stage Life Science Opportunities Across North America

26 Jan

A private investment firm with offices in New York City and in Asia is investing from a US$180 million fund into the healthcare sector. Typical equity investments range from US$5-10 million in businesses from Series A to pre-IPO and public traded companies. The firm is opening to leading or following a syndicated round. The firm is now seeking opportunities in North America.

The firm invests across therapeutics, medical devices, diagnostics, platform technologies, and healthcare IT and is looking for companies that are top 3 in their niche sector. Within therapeutics, the firm prefer clinical stage projects. The firm is opportunistic in terms of disease areas including orphan indications. Within device and diagnostics, the firm prefers post-prototype products with clinical validation.

The firm may request board representation or board observership on a case-by-case basis.

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

Hot Investor Mandate 2: Major Device Firm Looks For Medtech Opportunities, Including Delivery Devices, Biosensors and Healthcare IT

26 Jan

A major firm in the drug delivery device sector is interested in entering into joint ventures and strategic partnerships. These deals are typically accompanied by a minority investment of up to $10M. The firm seeks to be a value-added investor providing their expertise and capabilities in design and manufacturing as well as the resources of a large company while allowing the entrepreneur to drive the development of the technology. The group is also interested in outright acquisitions. The firm reserves a pool of capital from the balance sheet for these strategic investments.

The firm’s expertise lies in drug delivery devices, but has capabilities and is highly interested in all areas of medical technology/devices, biosensors and wearables, B2B or B2C healthcare IT applications including data analytics and cloud computing as well as robotics and AI as it applies to surgery prosthetics, rehabilitation and drug discovery. The firm has a particular interest in the diabetes space and has done work in this area in the past.

The firm is open to working with all entrepreneurs and is open to companies on a global basis. The firm does look for a board seat along with an investment, but strives to not be restrictive in any way and let the management team run the company.

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

Hot Investor Mandate 3: Large PE Firm Invests in Therapeutic Opportunities at Any Stage

26 Jan

The California-based life science venture investment arm of a leading global private investment firm invests across development stages, from early to late stages. The firm’s investment size is highly variable depending on the stage of the company, ranging from $1M to $25M in equity. The firm has a global mandate and is actively seeking new investment opportunities.

The firm seeks compelling investment opportunities in drug discovery and development platforms developing novel therapeutics, and medical devices. For therapeutics, the firm seeks small molecules and biologics and is open to all indications including orphan indications. The firm will consider products in all phases of clinical trials, from pre-clinical to phase III, and also commercial stage therapeutics. The firm is open to both PMA and 510K devices, as long as the device is already being sold at a commercial stage. The firm is also interested in services such as CROs and CMOs as well as tools of genomics and proteomics.

The firm invests for the long term, and is heavily involved in, and committed to, the growth and success of their portfolio companies. The firm, therefore, generally take a board seat/observer rights. The firm only invests in private companies.

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

Hot Investor Mandate 4: Large Pharma Firm Invests Early In Diabetes, Cardiovascular, Infectious Disease and Oncology

26 Jan

A publicly listed large pharma company in China is seeking strategic partnerships which can be in the form of licensing, equity, or acquisition of the asset. The firm’s typical investment depends on the technology, with a max investment of $10M – $15M per company. The firm is primarily seeking companies at growth and pre-IPO stages in fields of pharmaceuticals, biotechnology, and medical devices who have a strategic angle towards China. The firm invests in companies based in the U.S., China, Europe, and potentially South Korea and Israel.

The firm prioritizes biotechnology pharmaceuticals, with secondary interests in medical devices that produce high-value consumables and tertiary interests in diagnostic companies. The firm is not interested in companies that manufacture large medical equipment, such as MRI machines. For purely innovative technology, the firm will look as early as preclinical stage for those with high likelihood to succeed in clinics. In terms of indication, the firm prioritizes diabetes, cardiovascular, infectious disease, orthopedics, and oncology opportunities. However, the firm will look at indications outside of these areas.

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