By Michael Quigley, Director of Research, LSN

Last week we used the LSN Company Database, which covers over 30,000 life science companies across the globe, to see what kinds of emerging therapeutics assets were being developed in European countries. This week we again utilized the database, this time to take a look at the emerging medical devices coming out of Europe, and we were able to identify over 400 products in development (see Figure 1). These devices all have yet to reach market approval and, as such, can likely indicate where the most innovation is currently taking place.

In analyzing the data for the companies that we track, we found that reusable instruments, active implantable devices, and electromechanical medical devices are the most prevalent subsectors of in-development medical devices in Europe. By looking at the same cross section of medical devices in the U.S., we can observe how the innovation landscape compares across the pond (see Figure 2).

In the U.S., active implantable devices are the definitive leader by number of products in development; however, the rest of the landscape looks fairly similar to that of Europe. This similarity might indicate a global trend in terms of where the most innovation is occurring in the medical device space. In the coming years, it will be very interesting to see how these charts correlate with the types of medical devices that reach market approval in both of these geographies.

It is also worth noting where in Europe these new devices are being developed (see Figure 3).

Just as it led in our European-based therapeutics report last week, the United Kingdom is home to the largest number of in-development devices, although in the medical device space, it appears that there is a more even distribution of early stage technology across Europe than there is in the therapeutics sector. This is likely because the medical device sector is more nimble than therapeutics, which requires more capital, infrastructure, and existing expertise to support development of products. Medical device innovation is not limited to “innovation hubs” where all innovation follows the existing resources. While many local governments in Europe and around the world are pushing to develop themselves into one of these hubs, it takes a significant amount of time and resources to be able to attract and support innovation.

Finally, we can see the types of investors who are interested in early stage medical device development in this part of the world (see Figure 4).

Just as with our previous dissections of investor types, we notice a breadth of different investor classes with interest in this stage, sector, and geography. Venture capital again represents the most significant investor category; however, it is only just over one-third of the total capital pool. This is why it is vital to cast a wide net when fundraising. It not only will increase your odds of getting the capital you need, but also will allow you to hear valuable feedback from various viewpoints regarding your opportunity, ultimately helping you find the most strategically valuable investment partners.

By Natasha Eldridge, Marketing Manager, Life Science Nation

As cost concerns in healthcare rise and medical device technology advances, LSN has encountered a large number of investors who take an interest in the convergence of medical devices and software. Many investors are interested in the potential of this new wave of connected medical and diagnostic devices, which will collect and transmit biological data in order to monitor chronic conditions and warn of complications before they occur.  The Internet of Medtech has the potential to change how healthcare is delivered, with data bridging the gap between providers and patients.

At RESI @ TMCx, LSN has introduced a new panel session devoted to investment in this rapidly developing field of innovation.  Moderated by Michael Greeley, General Partner, Foundation Medical Partners, the audience will hear from:

• Alexander Suh, Founding Managing Director, California Technology Ventures
• Lucian Iancovici, Investment Manager, Qualcomm Ventures
• Matt Otterstatter, Partner, Vilicus Ventures
• Nancy Green, Global Lead – Healthcare Vertical, Verizon Healthcare

The five investors will share their approach to the Internet of Medtech, discussing important fundraising issues such as: How can you demonstrate that your connected device has the potential to provide clinical benefits?  What areas of healthcare are most in need of connected device innovation?  How should an Internet of Medtech entrepreneur build a market for their new device?

By Dennis Ford, Founder & CEO, LSN

BOSTON – April 9, 2015 – Johnson and Johnson Innovation, JLABS (JLABS) is collaborating with Life Science Nation’s RESI @ TMCx, June 8th, Houston conference.  JLABS is a co-sponsor and will be hosting a Sunday evening cocktail reception on June 7th to kick off the RESI @ TMCx event on the 8th.

“The JLABS event will provide a great venue for scientist-entrepreneurs and investors to get some additional networking time,” said Dennis Ford, CEO, Life Science Nation.

Senior representatives from JLABS also will be participating in RESI’s panels and workshops as well as the RESI investor partnering forum.

“JLABS has a close relationship with the Texas Medical Center (TMC) and will be opening an incubator at the TMC Innovation Insitute, called JLABS @TMC, in early 2016. JLABS @TMC is dedicated to the early stage life science arena, so collaborating with Life Science Nation and TMCx for this event makes a lot of sense,” said Chelsea Hewitt, Director of Marketing for JLABS.

The Redefining Early Stage Investments conference also takes place in Boston in September and in San Francisco in January.  Now with RESI @ TMCx on June 8th, fundraising CEOs have a venue to meet early stage investors that are a fit for their sector and stage every 4 months, providing a great ROI for cost conscious CEO’s.

About Johnson & Johnson Innovation, JLABS

JLABS, part of Johnson & Johnson Innovation LLC, provides the tools and resources needed to help life science startups thrive. Residents have access to turnkey, state-of-the-art infrastructure as well as year-round commercialization curriculum and networking events, onsite team for operations and business services, all with no-strings attached. JLABS links regional entrepreneurs with the full breadth of Johnson & Johnson Innovation, including opportunities to discuss funding, access third-party services, attend educational events and meet with R&D experts from our medical device technology, consumer healthcare product and Janssen pharmaceutical teams. The new JLABS @Texas Medical Center (JLABS @TMC) incubator will be located within Texas Medical Center’s new Innovation Institute at the TMCx facility, located at 2450 Holcombe Boulevard, Houston, TX. The 30,000-square foot JLABS facility will accommodate up to 50 life science startups. JLABS @TMC will also follow the same no-strings attached approach currently in operation at the California and Boston-based JLABS facilities.

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By Lucy Parkinson, Senior Research Manager, LSN

In March, LSN Research spoke with the investment staff at 90 firms that directly invest in life science companies. As always, we reached out to a wide variety of investors; many were from the venture capital or private equity space, but we also gathered mandate information from investors of every type that LSN tracks. Figure 1 shows the range of investors we contacted in March.

These 90 conversations represent a truly global dialogue. In addition to speaking to investors in the U.S., Canada, and throughout Europe, LSN Research also spoke to investors from as far away as Korea and New Zealand. (See Figure 2).

As Figure 3 shows, we found that the largest sectors of focus for these investors were the diagnostics and medical technology sectors, with 65 investors interested in each of these fields. We also spoke to many investors looking for therapeutics opportunities, and also those with an interest in other life science opportunities, such as engineering and healthcare IT, biotechnology R&D services such as CROs, and other biotechnology fields, including industrial biotechnology and agricultural biotech.

LSN’s focus is on early stage opportunities, so we have concentrated on cultivating relationships with investors that have demonstrated interest in the preclinical and early clinical phases of development. However, many investors take an interest in companies at a range of stages. A large number of the therapeutics investors we spoke to in March were also looking at later stage opportunities, as Figure 4 shows.

We see a more even distribution in the medical technology and diagnostics fields, perhaps due to the shorter timelines involved in bringing a product to market. A slight preponderance of the investors we spoke with in March are interested in medtech and diagnostics products undergoing clinical trials, as Figure 5 demonstrates.

Over a third of the investors we contacted are interested in accessing life science opportunities all over the world. The rest have particular areas of focus, from a single city or region to one or more entire continents. The majority of these non-global investors have an interest in opportunities in the U.S., but we also spoke to investors who focus on Europe, Canada, Asia, the Middle East, and Oceania (see Figure 6).

LSN Research finds that there is continuing investor enthusiasm for direct life science opportunities, and also a great deal of nuance in the specific details regarding what investors are looking for. These reports show general trends among life science investors, but every investor is different and has their own unique approach to the field, whether it’s focusing on a certain inflection point or a specific area of medicine. No one opportunity could spark the interest of all 90 of these investors; therefore, it’s important to thoroughly vet each life science investor and assess whether they are a fit for your company before pitching your opportunity.

By Michael Quigley, Director of Research, LSN

Over the past few months, we have examined the innovation landscape of early stage life science companies and investors across the Northeast, Southwest, and West Coast regions of the United States. This week we aim to shed light on life science investment and innovation in the European Therapeutic sector.

Using both the LSN Investor and Company Platforms, we have been able to identify over 350 investors and nearly 5000 therapeutic assets—from over 1000 companies—that have yet to reach commercialization. Figures 1 and 2 below show the number of European therapeutic assets LSN tracks by country of origin as well as the location of those European investors to whom LSN’s research team has spoken.

The United Kingdom is a clear leader in both the number of unique assets and investors who call the island home. This might be attributed to a combination of the significant large pharma presence in the country and the growing number of government initiatives and regional funding groups that operate there. Germany comes in as a close second for therapeutic assets, again fueled by a significant presence of large pharma. However, despite being number two on the list for investors based there as well, Germany along with the rest of the European countries fall significantly lower in terms of the number of investors based there than in the UK. While this may be partially due to the language barrier between the research team at LSN and non-English speaking countries, the difference appears too significant to be attributed to that alone.

Figures 3 and 4 respectively show the current phases of development of the European therapeutic assets, and the overall level of interest investors in this region have in each stage of the pipeline.

It is in the preclinical phase of development that most European therapeutic assets currently fall, however, much to the bane of fundraising entrepreneurs, it is the second least popular stage for investors. Fundraising at this point in the development cycle can be an uphill battle, though once a company begins to generate in-human data in phase I, supply and demand appears to tip more in favor of the entrepreneurs.

As the life science fundraising arena is a highly competitive space, particularly for early stage companies, it is vital that an entrepreneur identifies and then contacts all the different types of investors and capital providers that are a fit for the company’s investment profile. In Europe, just as in the U.S., there is a growing diversity of life science investors, and to focus your efforts on only one or a few of them does a great disservice to your campaign. Figure 5 below shows the diversity of European investors by class that LSN’s research team has uncovered and spoken with.

 

While venture capital and private equity lead the charge when it comes to investor types, the other categories also represent a significant percentage of total investors in the region and a very significant amount of capital. Since fundraising is a numbers game and the odds are often stacked again the entrepreneur, it is crucial to be able to identify and attract as many firms as possible that could be value-adding investors in your opportunity. Join us again next week for a comparative dive into the European medical device innovation and investment landscape.

By Michael Quigley, Director of Research, LSN

Back in January, at our RESI Conference, I gave a presentation describing the tools and methods used by LSN’s Research team to identify, profile, and initiate dialogue with investors in the life science space. The response was overwhelmingly positive, with attendees praising the tactical nature of the information, and Medmarc requested I host the presentation as a webinar for their monthly series. The entire webinar can be downloaded here, however with this article I wish to elucidate one simple tool that can be used immediately and will drastically improve your effectiveness when researching investors.

While Google remains the most common search engine in the world, many people underutilize it. The following two images feature a few Boolean operators that can be used in the Google Search bar as well as a screen shot of a sample search using them that shows how effective they can be.

 

Thanks to the use of Boolean operators, the search above yields only web pages that have “life science” in the title, include both “invest” and “early stage” somewhere in the text, and do not include the word “public.” As shown, this one simple search yields a number of early stage life science investors on just the first page of results. When using these operators for your own fundraising campaign, you should tailor the search to include keywords that describe the profile of your opportunity. These include your stage of development, indication, technology type, and any other information that can be associated with your company or product. You can also narrow your search based on the type of investor you are interested identifying. Whether you are seeking Family Offices, Corporate Venture Capital, Venture Philanthropy, Venture Capitalists (VC), or any other class of investor, you can focus on them by including the investor class in quotations in your search.

Experiment through multiple searches; you can go from very narrow to broad by varying the number of keywords and operators you use. Consider who might be interested in your opportunity from a number of angles, including geographic regions with government initiatives, people affected by the condition, potential strategic benefactors of your technology, as well as financially motivated investors looking strictly for a strong ROI. By doing this, you can build a strong target list of people to contact who may want to work with you directly or can refer you to someone else in their network who does.

For over two years, LSN has been using these methods to identify and profile capital providers in the life science space with outstanding results, both in finding new investors and successfully matching companies with investors. The webinar offers more information for those entering the capital fundraising landscape, including details on the different categories of investors that can be found, how to determine whether an investor is a good fit, and how to structure the initial outreach to increase the odds of a meaning dialogue. I hope you can use this information to better identify investor leads and I wish you all the best in your campaigns!

By Lucy Parkinson, Senior Research Manager, LSN

We’ve previously taken a dive into the LSN Company Platform and the LSN Investor Platform to assess the life science landscape in America’s Northeast and Southwest regions. This week, we will examine current product development and investor activity on the West Coast.

Using the LSN Company Platform, we took a sample of biotech and medtech assets being developed in West Coast states. While the bulk of these assets are in California, the state of Washington also makes a significant contribution to the data, and the LSN Company Platform also tracks several companies based in Oregon and Hawaii. In total, the sample drew from the pipelines of 493 companies, which collectively are developing 187 medtech products and 1529 biotech products. In the case of the biotech assets, we track the specific target indication in 1399 cases, as is shown in Figure 1:

While many of the assets under development on the West Coast are in the cancer sector, we also see significant numbers of pipeline assets in other fields. In addition, although the clinical areas with the most assets—oncology, diseases of the nervous system, and endocrine and metabolic diseases—also have solid pipelines nationwide, the numbers in other indication areas illuminate distinct regional differences. Compared to the Northeast, we see more innovation in blood and immune disorders, but less in the musculoskeletal field.

Beyond this top-level data, we can also look more specifically at the breadth of the assets in each indication area. If we look deeper into the field of oncology, we find that these West Coast-based companies are developing cures for a wide variety of cancers. Figure 2 shows the top 20 subtypes of cancer in terms of the number of assets in development. Several cancers that currently have very high mortality rates, such as pancreatic, lung, and ovarian cancers, are represented in this group. In these areas, scientists are advancing new products that could have a significant impact on patient outcomes in the future.

The West Coast is also a hotbed for life science investors. The LSN Investor Platform tracks investors throughout the region, and Figure 3 provides a breakdown of those that we have discovered have an interest in development stage life science companies:

In addition to the many life science venture capitalists based on the West Coast, LSN Research has found that there is a significant number of West Coast angel groups that are interested in life science companies. Corporate venture capital is also a major force in the region, with many VC arms of major West Coast tech companies looking for strategic opportunities in the healthcare field.

LSN’S RESI Conference series now includes regular annual stops in three regions of the U.S.: the Northeast, Southwest, and West Coast. All possess significant life science innovation ecosystems and a host of local investors interested in opportunities both locally and globally. As RESI tours these three corners of the U.S. life science universe, we welcome you to join us and connect face-to-face with like-minded individuals who are a match for your product, or for your investment criteria. Meet like-minded individuals who can work alongside you in bringing new cures to market.