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LSN Summer Reading Series Chapter 9: “Global Target List—Match Your Firm with Investors That Are a Fit”

4 Aug

By Nono Hu, Director of Marketing, LSN

Last week, we provided an overview of the infrastructure required to execute an outbound campaign.  This week, we take a deeper look at how to build your target list of investors.

Chapter 9: “Global Target List—Match Your Firm with Investors That Are a Fit” explains the importance of finding alignment between your life science company and an investor’s interests.  Here we outline how to use information on past financing rounds to uncover potential investors, and how to screen these leads to find active investors that may be interested in your company’s technology.  Finally, we’ll anatomize an investment mandate, and examine the factors that determine fit, including your location, the type of product you’re developing, and the stage of development your asset has reached.

Click here to download/print the PDF.

Next week, join us for Chapter 10: “Phone Canvassing.”

Enjoyed the preview? Buy now from Amazon.com or Barnes & Noble

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Drug Development: What Does It Cost, and Who Has The Capital?

28 Jul

By Caitlin Kramer, Research Analyst, LSN

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Each phase of drug development offers its own unique challenges. The generation of lead compounds that may advance through the pipeline of FDA approval is a costly process, and new molecular entities that are advanced as leads through the process of FDA approval face abundant chances of failure: the likelihood of a given compound making it from Phase I through to approval is only 11.8%*.

Entrepreneurs and researchers developing drugs outside of big pharma will need to understand the costs facing an asset at every stage, and have a plan for how to efficiently structure their capital raises and outreach.

Figure 1 shows a breakdown of FDA-filing costs, estimated costs for each phase of FDA approval, and the likelihood of advancement between phases. The data portrayed in the figure come from the latest (published Feb 2016) in a series of research papers examining R&D costs in the pharmaceutical industry, authored by researchers at Tufts Center for the Study of Drug Development, the Department of Economics at Duke, and the Simon Business School at the University of Rochester. The data comes from a survey of 10 top multinational pharmaceutical firms which conducted in-house discovery and pre-clinical programs. The R&D costs incurred per approved drug in these settings were calculated to be $430 million, a figure which is likely larger than development costs incurred in academic settings. Once an IND is filed ($550,000), each subsequent phase of approval is more expensive. The estimated likelihood of advancement, or success in the phase, is lower in Phase II than other phases, making a Phase II success an important inflection point from an investment perspective.

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Figure 1. Estimated non-capitalized costs for new drug development and advancement between phases of FDA approval.

The LSN Investor database contains data about the phases of development that firms have expressed interest in. A breakdown of this data is shown in Figure 2. Venture capital firms have expressed the most interest in funding pre-clinical and Phase I therapeutic leads. Private equity firms, being more risk averse, express increasing interest in later phase assets. Interestingly, large pharmaceutical and hedge fund firms step in for the riskier Phase II trials while their corporate venture arms are more interested in earlier phases of development. Family offices express similar levels of interest across all phases of development.

Knowing the distribution of capital amongst the different firms can help entrepreneurs plan their raises to bring them through the various phases and hurdles of development.

Distribution of capital amongst investor types at different phases of development

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Figure 2. Data retrieved from LSN’s Investor Database on 27 July 2016. Representative of active mandates that are open to investment in the Therapeutics sector.

RESI on MaRS: The Family Offices Investor Panel

28 Jul

By Cole Bunn, Senior Research Analyst, LSN

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Due to their recent trend toward making direct allocations (as opposed to fund investments) family offices have certainly caught the attention of biotech and medtech entrepreneurs, with many early stage companies keen to add one to their cap table.

Viewed as deep-pocketed, patient capital sources, entrepreneurs tend to have a lot of misconceptions surrounding family offices. Family offices are notoriously heterogeneous; they come in many shapes and sizes and no specific investment characteristics apply to them all. At our most recent RESI event at the MaRS Discovery District, representatives from four different family offices spoke to how they like to be approached, what they look for in an entrepreneur and the importance of the relationship, the types of deals they like to do and what they avoid.

Moderated by Dennis Ford, Founder & CEO of Life Science Nation and the RESI Conference Series, this session featured the following:

Key takeaways from the panel include:

  • Tailor your message based on who you’re approaching – do your homework

This point goes for all investors, but goes a bit deeper and is even more important for the family office. First off, you want to make sure you are talking to the right investor or else you’re wasting everyone’s time – it’s unlikely that an investor whose only ever played in the therapeutics space will be interested in looking at an investment opportunity in a medical device or health IT project. That being said, if your technology isn’t in the same sector but is addressing the same indication as one of their portfolio companies or there is synergy between your project and a portfolio company, this should be noted in the outreach. These types of things can go a long way and can’t be uncovered if you don’t research the investor you’re targeting.

  • A strong relationship is crucial to securing funding from a family office

Some family offices have professionals manage their money and add structure to their investment process while others are more informal. Either way, since the money is not coming from an institutional fund and family offices typically have longer investment timelines, it is key that the entrepreneur and investor have a good relationship. One investor added that a lot of the deals he’s done begun with a dialogue with the entrepreneur long before the deal was formally presented as an investment opportunity, mentioning that it takes a while to get to know someone and naturally people like to do business with people they like and trust.

  • Finding a family office takes work

Family offices are a highly sought after investors for good reason and typically don’t always advertise their investment activity thus uncovering which groups are family offices is not as easy as finding angel groups and VCs. As one investor puts it, “You can’t just expect to wake up and know which family office is interested in the sector you are in.” He further notes that the best way to find a family office is by going to relevant conferences and networking events.

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LSN Summer Reading Series Chapter 8: “Leveraging a Cloud Infrastructure to Manage an Outbound Campaign”

28 Jul

By Nono Hu, Director of Marketing, LSN

For those that have been following the summer series thus far, you now have a firm hold on the legal landscape for fundraising as well as the importance of and what constitutes a strong set of marketing materials. In order to organize your outreach and keep track of whom you are sending those materials to, we have found that the proper utilization of cloud infrastructure is the best method to maximize your campaign’s efficiency.

Chapter 8 of The Life Science Executive’s Fundraising Manifesto, “Leveraging a Cloud Infrastructure to Manage an Outbound Campaign,” provides a framework for and describes the key functionality that makes some of today’s cloud infrastructure so valuable in any type of outbound campaign. From task management to content delivery and large-scale email campaigns with metrics and tracking, this chapter provides an in-depth look at the value these cloud based products can provide.

Click here to download/print the PDF.

Next week we introduce Chapter 9: “Global Target List—Match Your Firm with Investors That Are a Fit,” where the importance of having a global list of relevant investors and the process of creating this list will be discussed.

Enjoyed the preview? Buy now from Amazon.com or Barnes & Noble

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Top Tier Early Stage Investors to Attend 10th RESI Conference in Boston on September 13th

21 Jul

By Dennis Ford, Founder & CEO, LSN

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RESI was founded to provide scientist-entrepreneurs with a venue to connect with a diverse range of active investors who are a fit for their opportunities. With almost two months to go, over 60 of the top life science investment firms in the world are already confirmed to be at RESI Boston (LSN is expecting another 250) to meet with medtech and healthcare IT entrepreneurs.

The reason RESI has powered its success through 10 events is that the event serves a need for both investors and entrepreneurs. RESI is a focused, compelling event that’s become a hub for investors to find great technology assets, as well as being able to network with other likeminded investors.

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There are only two days left to register for RESI Boston at the Earlybird rate, so if you want to book up to 16 face to face meetings with these top tier life science investors, you can register online now.

Confirmed RESI Boston Investors 

As of July 18, 2016    Click to Learn More

RESI Boston Early Bird Special Ends Tomorrow: Seeking Fundraising CEOs for RESI Innovation Challenge (View Past Winners Here)

21 Jul

With RESI Boston coming up soon, LSN’s scientific team is preparing to review the RESI Innovation Challenge applications from biotech, medtech and healthcare IT companies.  We’re excited to receive applications from companies at the cutting edge of biomedical science.  On September 13th, all RESI attendees will have the opportunity to vote on the 30 Innovation Challenge finalists.  See below for the past winners – a diverse group of startups from every area of the life sciences.

Every 90 days, RESI gathers hundreds of active early stage life science investors for a one-day partnering event. RESI Innovation Challenge finalists are provided with an all day showcase to attract the attention of those investors using their branding and messaging. It’s a unique opportunity to be a featured company in the life sciences industry. All applicants are vetted by LSN’s scientific review team, with a view to not just the quality of the company’s scientific work, but also the strength of the management team and how well-positioned the company is to receive investment.

What makes the RESI Innovation Challenge so valuable?  We’ve included a few words from previously successful participants below, but in short, being part of the Innovation Challenge provides startups with a new way to get attention and start dialogues with the investors who attend RESI.  Participants can share their message all day in the exhibit hall, with their Innovation Challenge display providing a starting point for a meaningful conversation about the opportunity.

Here is what our previous winners are saying about the RESI Innovation Challenge:

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“It was an absolute pleasure to participate in the RESI conference held at MaRS in Toronto. The unique structure of the conference facilitated creating new relationships with potential investors and partners. In particular, the Innovation Challenge pushed us to introduce ourselves to new people, which will be useful as we look towards a future financing round. I definitely recommend the RESI conferences to entrepreneurs seeking financing in the bio / health space.”
 
– Raymond Shih, President, Co-Founder, QoC Health
3rd Place, RESI on MaRS, June 23, 2016

“I love the RESI Innovation Challenge because it is a great way to give our pitch to practice it and try to obtain a scarce resource from these investors. Practicing with these investors is a great way to build relationships and continue that on to the real investment conversations.”

– Niko Skievaski, Co-Founder, Redox

1st Place, RESI@TMCx, June 8, 2015

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“The RESI Innovation Challenge is a really good opportunity to meet investors and other companies in the space.  It’s a good showcase to reach that audience.”

– Jessica Ching, CEO, Eve Medical

2nd Place, RESI San Francisco, January 12, 2016

“The RESI Innovation Challenge is a unique way to pitch, and provides a great opportunity to see what other companies are doing in the industry, while allowing you to meet with potential investors and strategic partners outside of the partnering meetings.”

– John Connolly, VP Corporate Development, Rna Diagnostics

1st Place, RESI Boston, September 16, 2015

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“RESI offers small companies like GeneSegues a direct line to potential partners and potential investors in a small setting conducive to relationship building and conversation. The Innovation Challenge was a particularly great way to introduce our company to a broader audience than I could meet with personally which allowed us to leverage the showcasing of our technology more efficiently.”

-Laura M. Brod，Chief Executive Officer，GeneSegues Therapeutics

-1st Place, RESI @TMCx, April 11, 2016

RESI on MaRS June 23, 2016

1st Place
Paul Weber, President & CEO, Perimeter Medical Imaging
2nd Place
Geoff Fernie, CEO & CTO, Bresotec Inc
3rd Place (Tie)
Chancellor Crawford, Co-Founder & CEO, QoC Health
Ilana Odess, CEO, Woven Orthopedic Technologies

RESI@TMCx April 11, 2016

1st Place
Laura Brod, CEO, GeneSegues
2nd Place
Austin Dirks, CEO & CO-Founder, GreenLight Medical
3rd Place
Alexander Schüller, President, Adhesys

RESI San Francisco January 12, 2016

1st Place
 Shravanthi Reddy, COO, ClearSight
2nd Place
Jessica Ching, CEO, Eve Medical
3rd Place
Jonathan W. Gunn, JD, PhD, CEO & Co-founder

RESI Boston September 16, 2015

1st Place
Jonathan W. Gunn, JD, PhD, CEO & Co-founder, Rna Diagnostics
2nd Place
Matthew R. Gevaert, Ph.D. CEO & Co-founder
3rd Place
Kenneth J. Slepicka, CEO & Director

RESI@TMCx June 8, 2015

1st Place
Niko Skievaski, Co-founder, Redox
2nd Place
Wade Lange, CEO, NeuroFx
3rd Place
Laura Bosworth, CEO & co-founder, TeVido BioDevices

RESI San Francisco January 13, 2015

1st Place
Shawn Iadonato, Ph.D., CEO, Kineta
2nd Place
Eric Goslau, CEO, Transverse Medical
3rd Place
Robert Thompson, President & CEO, Amorphex Therapeutics

RESI Boston September 17, 2014

1st Place
Robin Smith, CEO, ORIG3N
2nd Place
Jeff Missling, CEO, SpineThera
3rd Place
Kurt Dieck, President & CEO, Biosortia

RESI Boston March 24, 2014

1st Place
Pam Randhawa, Founder & CEO, EMPIRIKO
2nd Place
Marcia Fournier, CEO, BIOARRAY
3rd Place (Tie)
Magdalena Leszczyniecka, President & CEO, STC Biologics
Tasos Smeros, Founder & CEO, Multineurons

Apply today for the chance to join!

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10th RESI Marks Milestone with Asia-North America Investor Track

14 Jul

By Shaoyu Chang, MD, MPH, Senior Research Manager & Asia Business Development Liaison, LSN

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Asia-based drugs, devices, diagnostics and healthcare IT companies all have a cross-border strategy. These entities have demonstrated impressive growth in recent years in terms of talent, research capacity and capital. Now on both sides of the Pacific Ocean, investors and entrepreneurs have set out to find opportunities and form new partnerships. At the Boston-Cambridge biotech hub, the tenth RESI Conference is poised to become the go-to platform for US-Asia early stage life science investments.

Life Science Nation has teamed up with a committee of highly experienced investors and organizations to implement the new Asia Track at RESI Boston. Interested attendees will have the opportunity to learn about the Asia-North America investment landscape and meet face-to-face with potential partners in biopharmaceuticals, medtech, and diagnostics.

The steering committee is composed of representatives from Wuxi Apptec, Simcere Pharmaceutical, Lyfe Capital, MP Healthcare Venture Management, Korea-Seoul Life Science Fund, Chinese-American Biomedical Association (CABA), and Sino-American Pharmaceutical Professionals Association (SAPA). The committee brings together diverse backgrounds and deep experience in early stage life science investments.

The LSN team has traveled to innovation hubs such as San Francisco, Houston, Toronto, and Boston. Everywhere we went, we were greeted by a growing number of Asia-based investors, fund managers, pharmaceutical corporations, and big corporations that are looking outside their local region for investable life science technologies. However, geographic and cultural barriers often limit their ability in deal-sourcing, evaluation, negotiation, and post-investment management.

On the other hand, many US and Canadian entrepreneurs are looking at the other side of the Pacific for capital, strategic partners, and business growth and expansion. They are faced with a different set of challenges: ignorance of risks and benefits in these new marketplaces, inability to identify a good fit from a wide array of advisors and consultants, and difficulty in establishing and maintaining long-term cooperative relationships.

The Asia Track at RESI Boston aims to address all of the above issues. Past RESI events have stressed the globalization of early stage life science investments. This time, the Asia Track will bring to you seasoned investors who understand your sector and can pinpoint emerging opportunities in China, Japan, Korea, and other Asian countries. Next Phase will announce these Asia investors panels in the coming weeks.

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