By Lucy Parkinson, Director of Research, LSN

The LSN Licensing Deals data platform logs all pharma licensing deals provided that financial information regarding on the deal has been announced. Taking a quick look at 2016’s announced deals thus far, we found that while many new technologies are making waves through pharma – such as T-cell technologies and RNA therapies – antibodies are currently the most wanted technology in pharma.

As over a quarter of the licensing deals logged in 2016 involve antibodies, we decided to take a look into the LSN Company Platform to find out what antibodies are currently being used for. For this article, we look at a sample of development-stage antibody products, ranging from preclinical-Phase III. We found that an overwhelming number – over half – of development-stage antibody drugs are in the oncology space. Other top indications for antibodies include infectious disease, musculoskeletal diseases and immune diseases, but oncological use of antibodies dwarfs all these.

Within cancer, many of the antibodies in development are targeting a specific type of the disease. Here’s a closer look at which areas of cancer are seeing the most antibody innovation at present:

As is typical in drug development, we find that a plurality of the development-stage antibodies are still in the pre-clinical phase of development, with a drop-off occurring at each stage.

While there’s a lot of excitement about new drug technologies such as gene and cell therapies, antibodies are still highly sought after by big pharma in 2016 and much innovation is taking place within the world of bispecific and monoclonal antibody development. The LSN Company Platform is keeping both LSN and our clients abreast of the latest new technologies out there, and how big pharma is driving demand.

By Lucy Parkinson, Director of Research, LSN

When speaking to life science companies about their financing progress, there’s often a sense of ‘grass-is-greener’ problems. Medtech CEOs think it’s easier to raise money in biotech; early-stage CEOs think it’s easier to raise money for later-stage companies with human proof of concept data; neurology companies think it’s easier to raise money in oncology or cardiology. We hear a lot of these stories at LSN and they often contradict each other! Realistically speaking, most of the investors that an entrepreneur will speak to will decide not to invest in their company. It’s therefore easy to read too much into a rejection note. This week, we’ll therefore take a look at the data in the LSN Company Platform on what’s really getting financed right now, and at what stage.

The LSN Company platform records a wide range of financings, but this article focuses on data on equity investments into privately held companies in biotech and medtech during 2016. Not all financing rounds are announced when they occur, and the platform only records financing rounds for which some data is available; that said, the platform includes data on about twice as many biotech financings as medtech financings. Financings in other sectors, including healthcare IT, instrumentation, industrial biotech and biotech R&D services were also recorded.

In some of the rounds it was possible to identify the stage of equity financing that occurred. This isn’t always cut and dried, as many life science companies raise bridge rounds or issue convertibles, and seed financing in the life sciences may come in the form of a grant rather than an equity investment. However we’ve found that where stage data is clear and available, most of the recorded financings occurred at the seed stage, with a drop-off that steepens beyond the second-stage (Series B) financings. This data covers equity rounds into privately held companies only, so those that obtained financing by other means (such as a major partnership, venture debt, or an IPO) aren’t included in this data set.

In biotech, we’re able to identify the indication areas in which the companies are operating. Many life science companies are working on assets in multiple indication areas, and some assets cut across multiple indication areas; for example, a company targeting HIV may be counted as both an infectious disease company and an immune disease company). The below chart shows the top indication areas: oncology remains the most financed area by far, followed by CNS, infectious disease and immunology.

Where are life science companies receiving equity investments in 2016? Looking solely at biotech, medtech and healthcare IT companies, we found that our dataset mostly consisted of financing rounds in the USA. However, biotech and medtech investment is occurring all over the world, with many companies getting funded throughout Europe and Asia. Here are all the countries in which we have data on more than one financing round in 2016:

While capital is more abundant in some areas than others, we see investment occurring worldwide in a wide range of life science technologies. We also see new names continue to surface in the fine print of these financing rounds, and by identifying the participants from the data, LSN can begin to build relationships with new investors in the space. Keeping an eye on financing round data is crucial for raising money in the life sciences – both to know the current landscape, and to keep your mind open to the potential investment sources out there.

By Lucy Parkinson, Director of Research, LSN

One of the greatest difficulties in raising early stage financing in the life sciences is that many investors balk at the development timelines involved in biotech and medtech opportunities.  VC investors in particular are driven by short term fund lifecycles; particularly if you are receiving an investment late into a fund’s investment period (which may extend 2-3 years after the fund is closed), the VC will be often looking for the possibility of an exit in under 3 years. Angel investors and evergreen funds may also operate under similar horizons, as they rely on successful exits to generate capital to make further investments. Beyond structural constraints, from an investor’s perspective, time is money; their rate of return is directly governed by how long their capital is tied up in your company.

Everyone knows that it takes a long time to develop and commercialize a new drug, medical device or diagnostic. It’s estimated that it takes 11-14 years to move a drug from preclinical testing to the marketplace. Yet many investors step into this marketplace with a 2- or 3-year investment horizon. Early stage companies must therefore learn how to get in step with investors when it comes to timelines.

It’s important to understand that early stage investors most often don’t intend to remain invested in a company all the way to commercialization; rather, they want to deploy capital to enable a company to reach an important milestone that can be used to generate an exit opportunity.  If your company has a long development path ahead, it’s therefore vital to identify these milestones and provide investors with a map that will demonstrate your near term opportunities for value inflection.  A company can also look for potential ways to accelerate their development path.  Recently one LSN client created a new clinical development plan that would provide significant results much sooner than their original plan; this has improved their investor traction tremendously.  In the biotech world, many companies look for potential applications of their products in orphan diseases so that they can pursue an accelerated plan.

Alternatively, a company can focus on investors who are looking for longer term opportunities. This may include family offices or strategic investors; however, it’s important to reach out to every possible category of investors, and having a timeline that can provide value to both short-term and long-term investors is important for increasing your potential to receive investment.