Next Phase Newsletter

By Dennis Ford, Founder & CEO, LSN

Up to two hundred early stage life science investors will converge on MaRS Discovery District on June 23^rd in Toronto. The Redefining Early Stage Investments (RESI) conference series continues to match up fundraising CEOs and scientist-entrepreneurs with global investors who are a fit for their sector and stage of development.

LSN created RESI to fill a hole in the early stage arena by connecting investors and startups at events held every 90 days throughout North America. RESI on MARS is shaping up to be a very compelling event. RESI continues to receive great support from the global early stage life science investor community because investors find great technology assets and startups at RESI, as well as being able to network with other likeminded investors.

Quotes I Heard at RESI Events

Family Offices

An investor representing a large family office who has been to last 5 of our conferences stated he had 16 partnering meetings at a recent RESI event. The one thing he appreciated most was that majority were from outside the traditional biotech hubs – with far more realistic on valuations than those elsewhere.

An investor from a California-based family office who had never been to RESI before said “I go to many conferences across various industries and this was a great combination of useful topics and the kind of opportunities I want to see.”

Corporate VC

A corporate VC investor said he made one investment in a company he met at RESI last year, and this year he found 2-3 he said he was very interested in pulling the trigger on.

A new corporate venture fund from the insurance industry said he needs venues like RESI where he can find next generations solutions for all future applications, and also meet investors and strategic partners for corporate initiatives.

Another corporate VP described RESI as a great venue for finding technology assets. The corporation invested in a company that was sourced from a previous RESI event.

Seed Fund

Funded by Chinese pharma firms looking for early stage investments, this fund’s partner postponed a trip back to China to come to RESI to find regional healthcare technology startups.

Pharma

A U.S. Pharma BD and Licensing lead said “RESI is great for showing what great resources are in second tier regions. I have met several companies at RESI that I will continue to investigate.”

A VP of Outsourced Technology said “I need to find companies before they get tied up with long term VC relationships. RESI enables me to broaden my view of companies in a region I need to canvass. I need to get to know these companies at an early stage.”

By Lucy Parkinson, Director of Research, LSN

Over the past through years, breakthroughs in personalized medicine and mobile technology, along with aging populations and the need to decrease healthcare costs, have fueled a trend toward greater patient involvement in healthcare. Many investors are looking for consumer health opportunities, and Toronto is home to a significant number of startups in the sector; these companies are developing new apps and products for patients that solve problems ranging from booking medical appointments to making positive health changes.

To explore the developing investment trends in this field, RESI on MaRS will present a panel of five speakers who are seeking consumer health opportunities. The moderator, Reda Jaber, Partner, IncWell Venture Capital, will be joined by:

• Veronika Litinski, CEO, Konona Health
• Stuart Browne, CEO, Pycap Venture Partners
• Neil D’Cruz, Vice President of Marketing and Sales, Dynacare
• Lori Casselman, Assistant Vice President of Integrated Health Solutions, Sun Life Financial

The panelists will discuss what kind of technologies they’re seeking in the consumer health sphere, and how they assess direct-to-patient healthcare products to look for the breakthrough opportunities. If you’re developing a consumer health technology and are looking to raise capital, you can register for RESI and meet these investors face to face.

By Nono Hu, Director of Marketing, LSN

Welcome to the second installment of the LSN Summer Chapter Series. This week we’ll finish up the legal section of The Life Science Executive’s Fundraising Manifesto by covering the rest of the necessary regulatory underpinnings for your fundraising campaign: how to market your offering and potentially tap the crowd for capital.

Chapter 2, “The Legal Landscape — Crowdfunding and IPOs,” was contributed by Robert H. Cohen, Esq. This chapter provides a comprehensive look at the possibilities created for life science companies by the JOBS Act of 2012, including crowdfunding, publicizing a private offering under Regulation D, and new regulations for IPOs. Cohen takes the reader through the nuances of what is and is not permitted in terms of publicizing your offering, and also explains the different types of securities that might be offered.

Click here to download/print the PDF.

We hope you enjoy this chapter. Next week, join us for “Chapter 3: Going It Alone or Choosing a Fundraising Partner.”

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

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

Medical robotics technology is changing the paradigm of surgery, prosthetics, rehabilitation, and many other medical disciplines. Entrepreneurs and investors are eyeing on the game-changing potential in both physicians’ practice and patients’ homes.

One example is the development of bionic limbs and exoskeletons. Such technology can be applied in various fields including amputees, persons with disability, and emergency response. The US Defense Advanced Research Projects Agency (DARPA) has recently launched new initiative to develop prosthetic limbs that feel and function like natural limbs for amputees. One of its grant awardees is a Utah-based company with an implantable wireless device that aims to increase reliability of prosthetic limbs and create a more natural movement.

Another highly anticipated area is bionic eyes and artificial organs. The world’s first bionic eye received FDA approval in 2013. Thanks to advanced microelectronics and material science, the next generation of the bionic eye, artificial urinary sphincter, and other life-supporting implantable devices are underway and are expected hit the market in the foreseeable future.

The investment community has also shown strong appetite for medical robotic innovations. A search on the LSN Investor Platform for investors interested in ‘Active Implantable Devices,’ ‘Electro Mechanical Medical Devices,’ and ‘Technical Aids for Disabled Persons’ yielded 625 results. We see interest from throughout the investor spectrum; the majority are VC/PE firms, and we also see interest from angel groups, family offices, and corporate VC funds (Figure 1).

Many of the 625 investors are opportunistic, meaning that they are spread across sectors from MedTech to diagnostic to biotech to healthcare IT. However, 79 investors we have spoken to specifically indicated their mandate to find only novel devices that address unmet needs, including VCs and large medical device companies (Figure 2).

A growing trend is that traditional IT investors are seeing medical robotics as an entry point to the healthcare field. For example, we recently spoke to a California-based evergreen fund backed by founders of a major telecommunications company. The fund manager told us that he is seeking data capturing, data analytics and instruments/robotics application in healthcare. With no expertise in drug development, his team avoids therapeutic projects. However, they are happy to take on $250K – $1M investment in early-stage companies in the medical robotics field.

Medical robotics have truly attracted global interests (Figure 3). The USA clearly leads the field with 385 investors. Canada, the UK, Germany, France, and Netherlands are also very active. Asia-Pacific countries, including China, Taiwan, Singapore, Hong Kong, Japan, and Korea, are seeking medical robotics to help with their rapidly aging populations and rising rate of chronic diseases.

For example, in January this year a Beijing-based investor led a $17M round for a Massachusetts-based bionic prosthetic startup company. The company is developing lower-limb prosthesis that mimics normal ankle movement and offers powered propulsion for persons with disability. The capital is intended to form new strategic partnerships and expand into the China market.

Strategically, many China-based investors are eager to turn their traditional manufacturing powerhouse into high value-added healthcare innovations. A manager of new VC fund from Beijing said that his team is most interested in minimally invasive surgical instruments, artificial intelligence and robots, diagnostic tools, and mobile health innovations. His fund is backed by one of China’s largest TMT companies, and his mandate is to find solutions that can capture large healthcare market share and are compatible with the founder’s IT background.

Medical robotics entrepreneurs are entering an exciting time when a growing number of investors from various backgrounds are jumping in to the intersection of computer science, material science, and medicine. It is imperative for entrepreneurs to think strategically when building alliances globally that will propel their products to the next stage.

By Cole Bunn, Senior Research Analyst, LSN

As we are preparing for our first ex-U.S. RESI event, on June 23^rd in collaboration with Johnson and Johnson Innovation (JLABS) at the MaRS Discovery District in Toronto, we wanted to take the pulse of the early-stage investment community in Canada by taking a look at some data from the LSN investor platform.

One thing that distinguishes Canada’s venture landscape from the U.S. and elsewhere is the high level of involvement from the Canadian government in the venture world. This is underscored by injections of capital into two separate fund of funds that will invest in several Canadian venture funds as well as venture funds in the U.S. which invest in Canadian companies.

The level of life science innovation in Canada, Toronto in particular, is impressive, with 50% of the country’s life science companies located there, among several other statistics that highlight the economic capabilities of the industry. Major investments in the Toronto Discovery District’s infrastructure from the private sector and the provincial government will also help bolster the early-stage life science ecosystem by adding to and improving the existing resources available to life science startups, including everything from hospital systems and access to patients to incubators and mentorship-type services.

Below is some data on the Canadian investment vehicles, from the LSN investor platform, with the majority of the funds being in $100M-$300M range, arguably the right size for a venture fund to produce the best returns.

The Canadian investors we’ve spoken to have fairly evenly distributed interests, with the most widespread interest being in medical technology.

Another interesting feature of Canadian investors is that 56% of Canada’s therapeutic investors are interested in pre-clinical assets, and 57% of medical device/diagnostic investors will look as early as products in early development (that is, not yet in the clinic). This bodes well for the entrepreneurs working to commercialize technologies in this region, given that a large portion of the projects are early in their life-cycle.

It seems that Canadian investors recognize the vast amount of opportunity in their backyard, with nearly half of the Canadian investors in the LSN platform being focused solely on Canada.

We’re excited to bring the RESI conference to Toronto 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.