Archive | August, 2017

40 Top-Tier Companies Selected to Debut at the RESI Innovation Challenge

31 Aug

By Christine A. Wu, Senior Research Analyst, LSN

chrsitineWe are pleased to announce our forty finalists to compete in the Innovation Challenge at LSN’s 2017 RESI in Boston on September 26th. From a pool of over 100 applicants, the LSN Scientific Review Committee has selected a mixture of healthcare IT, diagnostic, therapeutic, and medical device companies, a portion of which have received funding from NIH or partnered with Techstars-Cedars Sinai. The quality of these companies should not go unnoticed, as we have seen nearly 50% of Innovation Challenge finalists from previous RESI events receive funding within one year of their debut.

From a CAR-T therapy for solid tumors to a patient management telehealth platform for chronic diseases, these companies cover a diverse range of life science technologies. Coming from all over the world, the companies will be competing based on scientific merit and investment potential, pitching to RESI attendees and showcasing their innovations. Be sure to meet them and make your “investments” at the RESI Exhibition Hall on September 26th!

Diagnostic

Therapeutic

Medical Device

Healthcare IT

Finding Capital in the Early Stage Funding Gap

31 Aug

By Michael Quigley, VP of Investor Research, LSN

mike-2

The majority of companies that we see at LSN have already secured some SBIR/STTR grant funding and/or have raised seed capital, generally from friends, family and angels (FFA). This funding tends to be used to cover incorporation fees, initial IP costs as well as some additional technical development to further de-risk their technology, making it more attractive for investors in a larger round.

What comes next, and when most companies come to LSN, is referred to as the “Valley of Death”. This is the area between FFA and significant VC investment, a gap that many companies fail to bridge. If you are plugged into daily news on biotech and life science venture rounds (which I would highly recommend for any fundraising entrepreneur) it is not uncommon to see Series A’s to the tune of $20 million or more. What is important for entrepreneurs to understand is that these large rounds represent the minority of Series A investments. In LSN’s Financing Round Database that tracks life science investments we have identified 134 Series A financing rounds that have been made thus far in 2017. Of those identified raises, 85 (or just about 2/3) were under $20 million. 57 were under $10 million. What is also important to note here is that LSN’s data is comprised of financing rounds that have been reported, and in LSN’s experience many of the smaller rounds do not get reported. Therefore, there is a high probability that these stats are underestimating the number of smaller rounds.

Of the rounds that raised $20 million or more, about 75% of them included what can be considered one of the top 25 venture capital firms based on total assets (AUM), investment track record, and name recognition. Many entrepreneurs are familiar with these VC’s, though few have real relationships with them. As a result, these VC’s have unprecedented deal flow allowing them to be extremely selective. Many of them are investing into companies in which they have been tracking the science and team since academia. In other words, unless you have a pre-existing relationship with these groups, truly getting their attention and having them take a hard look into your technology is a challenge, particularly if your technology description doesn’t include a hot topic word like immuno-oncology, microbiome or gene therapy. However, these high-caliber investors do show up at LSN’s RESI Conference events and you can meet them there, either via an ad hoc meeting, at a panel or in RESI partnering.

Companies that land these large rounds with top tier VC’s often discuss how easy it was to raise capital. “I just called my old business partner at fund X and we had a term sheet in two months”. While this is great for companies that can raise capital that way–and if you can then by all means do!–it can create a false sense of what fundraising is like as these are the deals that generally get the most press. Additionally, many of these funds are so large that they look to put significant capital to work in each investment, so this creates an inflated sense of the size of typical Series A rounds. In general, I would suggest entrepreneurs looking to raise capital outside these big players to target whatever is needed to get to the next significant value inflection point. This helps broadcast your grasp on capital efficiency to the investment community, as well as an understanding of the space beyond the headlines.

For companies that cannot raise from the top 25 VC groups, which represents the majority of rounds raised, they have a much bigger task at hand to raise capital then making a few phone calls.

LSN’s Research team is currently in dialogue with over 375 investment groups looking for preclinical – phase II therapeutics companies that fall between angels and the top 25 VC’s. These include what we can call mid-tier or new VC funds, PE groups starting to look earlier, family offices now going direct, strategics, their corporate funds, and venture philanthropy groups. This is essentially LSN’s bread and butter; helping entrepreneurs identify and connect with these more low-profile investment groups. While it is a positive that there are so many of them, it does make fundraising a larger task when you have many more emails, calls and meetings to take before you can find a partner.

For first-time entrepreneurs and those without deep networks into the VC community, the pool of capital represented by these investors outside the big-name VC firms represent your greatest potential chance of securing investment. Many of these VCs don’t have the same name recognition and established deal flow channels as the top 25 funds. If you can connect with relevant strategic groups, you will often find that they have deep scientific experience in your field as well as a need to fill their pipelines. These dynamics can all benefit the entrepreneur when looking to work with these less prominent groups, but identifying who these groups are and which ones are likely a fit for what you are doing is where the challenge lies.

There is indeed life in the Valley of Death, and with the right tools and contacts it is possible to find investment. It’s a challenge, however, as anyone who has gone through the process will tell you. You need to really put yourself out there both on the phone and in person to start dialogues, get meetings, build relationships and ultimately sign terms.

Click here for a PDF of the book “The Life Science Executive’s Fundraising Manifesto”.

Click here to see a list of investors who are signed up for RESI Boston.

Diagnostic Investors Explore Their Strategies at RESI Boston

31 Aug

By Lucy Parkinson, Director of Research, LSN

Personalized medicine, NGS and new biomarkers promise a new age of tailored, targeted medical care. However, diagnostics is a notoriously challenging landscape for both entrepreneurs and investors. Through our research and outreach, LSN has found that many investors are still looking at diagnostic opportunities, with some focusing exclusively or primarily on the sector. At RESI Boston, we’ve gathered five experienced investors from both the venture and corporate worlds to explain what they’re looking for in the sector and how entrepreneurs can improve their odds of finding funding for their diagnostic business.

Moderated by Tom Miller, Managing Director, GreyBird Ventures, the panelists are:

  • Alex Dewinter, Director, GE Ventures
  • Wouter Meuleman, (Director of Investments, Illumina Ventures
  • Diana Saraceni, Founder & Managing Director, Panakes Partners
  • Adam Lessler, Vice President, Canepa Healthcare

In addition to these five experts, nearly a hundred investors attending RESI have an interest in diagnostic opportunities. If you’re looking for investment in this sector, sign up now.

Hot Investor Mandate 1: Global Pharma Firm Looks Worldwide for New Platforms in Cardio, Oncology, Metabolic Diseases, and More

31 Aug

A global pharmaceutical company headquartered in Japan is engaged in the development of treatments for thrombotic disorders and focused on the discovery of novel oncology and cardiovascular-metabolic therapies. The firm is currently looking for partnering and in-licensing opportunities across the globe.
The firm is currently looking for innovative therapeutics targeting the following priority areas: thrombosis & thrombolysis, pain management, cardiovascular disease, CNS, and rare diseases. Other interest areas include metabolic diseases, oncology, organ fibrosis and NAFLD/NASH, neurology, immunology, and mitochondrial disease. The firm is open to biologics or molecular targets, with an increased interest in new platform technologies. The following areas are currently out of focus: diabetes, hypertension, dyslipidemia, psychiatric diseases, and immunodeficiency.

The firm partners with privately held life science companies with experienced management teams and innovative technologies in the abovementioned areas.

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: Corporate VC Firm Invests in Oncology, GI and CNS Drugs and New Platform Technologies

31 Aug

The corporate venture arm of a pharmaceutical company seeks to make strategic investments into early-stage companies that are aligned with its parent firm’s R&D focus. For equity investments, the firm will lead, co-lead, or participate in syndicated financings. The firm benefits from deep connections into its parent firm’s global research and development centers, and is well placed to nurture innovative pharmaceutical companies and to connect these into the parent organization.

The firm’s core focus is on therapeutics. Currently, the firm is most interested in oncology, gastrointestinal diseases, and CNS. The firm is also interested in breakthrough platforms technologies that improve peptide, antibody, cell, and gene based therapies. The firm does not invest in medical devices or diagnostics.

The firm’s primary focus is on start-up/seed rounds, through mid-stage financings – pre-clinical through Phase II. The firm respects the autonomy of the institutions it invests in and seeks standard institutional venture investment terms without special rights or options.

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: Multinational Health Group Makes Strategic Investments in Dental Technologies

31 Aug

A multinational health technology group based in China is interested in strategic investments and M&A opportunities. The firm is looking for later stage opportunities from the USA, Europe, and Israel. For deals, the firm is looking for M&A deals that are no larger than $1Billion USD and prefers that the company has some form of sales in China.

The group is currently focused on medical devices, specifically dental devices. For these devices, they must have CE and FDA approval and they would prefer if the device had CFDA approval as well. The current short-term goal of the firm is to become the largest dental equipment and consumables supplier before expanding into other indications.

The firm requires companies that have revenue and would prefer a company with net profit and a good annual growth rate.

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: Venture Investment Firm Focuses on Early Stage Biotech, Personalized Medicine and Novel Devices

31 Aug

A venture investment firm based in the Mid-Atlantic region of the USA is focused on bridging Eastern and Western innovations and investment opportunities. The firm invests in early to mid-stage biopharma and medtech projects. With its own R&D facilities in China, in-licensing assets from the U.S. and Europe to China would be an important consideration although not requisite for their investment opportunities. With additional strategic investing partners in China, the size of investment can vary depending on the deal. The firm is currently looking for new opportunities globally.

The firm is generally interested in preclinical to phase 1/2 stage assets in biotech and medtech. The firm is open to all therapeutic modalities. Within medtech, the firm is more interested in personalized medicine/companion diagnostics and novel devices. In terms of disease areas, the firm is interested in therapeutics in most therapeutic areas, including autoimmune diseases, cancer, metabolic, liver and gastrointestinal conditions, but the firm generally avoids behavioral illnesses.

The firm is seeking strong management teams with products that could address large unmet medical need. The firm has R&D facilities in China that can facilitate product development and registration both for China local and global market. The firm is open to negotiating regional rights with flexible terms.

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