By Mimi Liu, Research Analyst, LSN 

The global market for cancer drugs and treatments is truly massive and continues to grow. According to the IMS Institute for Healthcare Informatics, global oncology spending hit $91 billion in 2013, and it is growing at a 5% clip annually.[1] In previous articles, we’ve analyzed new products and investor interest in the cardiovascular and neurology sectors. Today, let’s look at what LSN data shows in the oncology sphere.

LSN tracks more than 4,500 therapeutic assets for the neoplasms, cancer, and oncology areas, including 1,025 assets that are in the preclinical stage, 2,202 assets that are in the clinical stage, and 517 assets that are on the market. For some of these therapeutics, LSN is also able to track the type of cancer they target. Although this is a subset of the total, it is useful to analyze. (See Figures 1, 2, and 3.)

Several types of cancer, such as breast, prostate, and pancreatic, are clearly some of the hottest and most competitive areas, representing large patient populations and substantial unmet medical needs. Companies developing therapeutics for these cancers likely find it more challenging to differentiate themselves from competitors than do companies targeting other cancers. It is interesting to note that certain disease areas, such as solid tumors and brain cancer, have attracted significant R&D efforts in the preclinical and clinical stages, yet there are relatively few available products on market. This may reflect a large prospective market but significant R&D challenges.

Companies targeting cancer therapies are spread across the globe. The U.S. has the largest number overall, while the UK, Germany, and France are the European countries with the most. North America and Europe are the two areas with the highest concentration of cancer therapeutics, while several Asian countries, such as China, Japan, and South Korea also have a significant number. (See Figure 4.)

With the growing number of cancer therapies and the expansion of the cancer market, there are a large number of investors with this interest. LSN has interviewed biotech investors across a wide range of categories who are interested in funding companies targeting neoplasm, cancer, and oncology therapeutics. (See Figure 5.)

Venture capital is the largest group among the ten categories of investors. Private equity firms, angel groups, and family offices also show a high interest in cancer companies. When looking for funding, companies should keep an eye on various categories of investors and the development stage they are interested in.

An analysis of investors’ exposure preference by region is strikingly similar to the regional distribution of oncology companies. (See Figure 6.)

Most investors are looking to allocate their capital to U.S.-based companies, which corresponds to the concentration of assets in the country. Although investors are attracted to established markets in North America and Europe, a significant portion will consider emerging markets in Asia and Latin America. Since the oncology investor landscape is rapidly shifting, it is important to note that global investors are the third largest group of investors.

For fundraising entrepreneurs, keeping track of all the different types of investors in an indication like this given the global nature of so many investors today, is no small task. However limiting your research and outreach to only a few classes of investors or just within your local geography will undoubtedly hurt your chances for a successful fundraise. In an indication with as much competition as oncology, investors have to focus on technology and management in order to be successful. More and more they are looking overseas for the best possible opportunities  and as an entrepreneur, you should be doing the same.

[1] “Cancer-drug market zooms toward $100B, thanks to costly targeted therapies,” May 6, 2014, FierceMarkets.com.

By Tom Crosby, RESI Conference Manager, LSN

This week, LSN announces two panels for the upcoming Redefining Early Stage Investments Conference: Big Pharma & Large Biotech, and Diagnostic Investors.

Panel Announcement #1: Big Pharma

Panelists will discuss in-depth the key motivators behind big pharma’s shift towards an early stage strategy as a way to fill the gaps in their pipelines. What indication areas are currently most sought after? How does an early stage entrepreneur interface with business development executives from pharmaceutical companies? LSN’s Big Pharma RESI Panelists will shed light on these questions and more.

Moderated by Tomas Landh, Director, Novo Nordisk, the audience will hear from:

Kevin Lynch, VP, Search and Evaluation, Abbvie

Imran Nasrullah, Director, Innovation Sourcing, Boehringer Ingelheim

Thorsten Melcher, Senior Director, New Ventures & Partnerships, J&J Innovation

Shafique Virani, Global Head, Partnering (Neuro), Roche / Genentech

Hear from big pharma executives as they explain how they engage with early stage startups, and how they like to be contacted. The speakers will help the audience understand their timeline for contact, and give advice on how to create a dialogue that leads to a relationship and an eventual alliance. If you need to understand the timeframe and limitations of how big pharma corporate works, this expert session is crucial for you to attend.

Panel Announcement #2: Diagnostic Investors

In addition to drug developers and medical device engineers, LSN also welcomes diagnostic startups to RESI, and for the first time, RESI 4 will present a discussion panel exploring the challenging landscape of the diagnostics sector. The investors joining this panel are highly diverse, representing both nonprofit and for-profit interests in the diagnostics field.

These panelists will discuss what an entrepreneur needs to know about raising capital for an innovative diagnostic product. The panel will explore how to pitch a diagnostic opportunity, how to navigate the strategic challenges in diagnostics, and what will differentiate your product from the pack.

Moderated by Steven Young, President & COO, Addario Lung Cancer Institute, the audience will hear from:

Bill Cadwallader, Senior Commercialization Officer, Diagnostics, PATH

Momei Qu, Senior Associate, Baird Capital

Gary Kurtzman, Senior Vice President and Managing Director, Healthcare, Safeguard Scientifics, Inc.

Nola Masterson, Founder and Managing Director, Science Futures

By Dennis Ford, Founder & CEO, LSN

Today, Life Science Nation (LSN) accelerates the funding of early stage life science firms via a Match.com-like sourcing platform for private investment, making CEOs more efficient in their capital raising efforts. The FreeMind Group (FMG) specializes in assisting life science organizations secure non-dilutive funding from US Federal Agencies and Private Foundations. LSN and FMG are experts in early stage private and non-dilutive funding respectively, and this complementary expertise fully supports the early stage financing needs of life science entrepreneurs.  As both of these financing sources are vital to early-stage financing, CEOs benefit from understanding both domains:  LSN’s 10 categories of private early stage and FMG’s governmental non-dilutive funding.

LSN and FMG have been working side by side for years, and recently saw that combining both pools of attendees at their respective conferences could transform each from a one-day event into a two-day conference offering dynamic partnering and compelling financing content to the early-stage CEOs visiting San Francisco during the JP Morgan Healthcare Conference.

Dennis Ford, CEO, LSN, stated “FreeMind and LSN give scientist entrepreneurs a 360 degree view of all the funding options available today.  Both the private and governmental capital landscape has morphed over recent years and I think this is a fabulous opportunity to help early stage CEOs get up to speed on both financing options. A savvy entrepreneur will go after all the capital available to them, both non-dilutive and private.  Indeed, most early stage companies already have a hybrid of each type of funding.  It’s part of the early stage gestalt.”

Ram May-Ran, Managing Partner, FMG, explained “Raising capital is fundamentally a numbers game.  Each financing option needs to be thoroughly explored, and that means both private and non-dilutive.”  Ram went on to say that many government funders offer matching funds for private capital brought into a company.  “It makes total sense for the CEOs to investigate and become knowledgeable on all the funding alternatives as this can greatly reduce the time spent raising capital.”

LSN owns and operates the Redefining Early Stage Investments (RESI) conference series.  The next RESI will be held on January 13^th in San Francisco, at the Marines’ Memorial Club and Hotel. FMG owns and operates the Non-Dilutive Funding Summit, which will be held on January 14^th in San Francisco at the Nikko Hotel. By virtually connecting these two events, attendees at LSN’s RESI will automatically be registered for FMG’s Non-Dilutive Funding Summit, and in turn Summit attendees will be able to get a discount coupon to register for RESI.  Executives from each firm agree that this may become an ongoing relationship, as creating these venues for partnering and fundraising can support a groundswell to aid in the commercialization of science.

For more information on LSN and RESI:

http://www.resiconference.com/

For more information on FMG and Non-Dilutive Funding Summit:

http://www.freemindconsultants.com/10th-annual-non-dilutive-funding-summit-2/

By Lucy Parkinson, Senior Research Manager, LSN

Here at LSN, we’re getting ready to go home for Thanksgiving.  But first, we’d like to thank all our readers, supporters and friends across the global life science industry.  We wouldn’t be here without you.

In the spirit of the season, LSN Research welcomes you to the table to share the mandates we’ve gathered from our recent conversations with investors across the world.  This cornucopia of investors are from 6 different nations, and cover every niche of the life science sector – from agriculture to therapeutics to devices to healthcare IT.

Click on the mandates below to see what’s cooking in the rest of the world

1. Private Equity Firm Seeks AgBio and Sustainable Bio Opportunities
2. Early Stage VC Seeks Healthcare IT Opportunities
3. Global Firm With Patient-Centric Strategy Invests In Oncology, Cardiovascular, Anti-infectives, CNS/pain, and Women’s Health
4. Taiwan-based VC Investing In Innovative Early-Stage Medtech 
5. South American Corporate VC Interested in Orphan Drugs
6. UK-based Fund Group Seeks Medical Devices, Diagnostics, Lab Equipment, and Healthcare IT
7. Cross-Border VC Looking At Healthcare Technology for Emerging Markets 
8. Global Health Organization Funds Diagnostics, Vaccines and Women’s Health
9. European PE Invests in Drug Development, Diagnostics, and Medical Devices
10. Dutch Firm Investing In Medtech, Healthcare IT, and Biotech R&D Services

By Shaoyu Chang, Research Analyst, LSN

Coming from a scientific background, I thought I knew well enough about using slides and making presentations, whether in laboratory journal clubs or at hundred-attendee conferences. However, as I start to help fellow scientists on their fundraising campaigns, it has become apparent to me that academia and business speak very different languages.

Looking at the concept scheme (Figure 1), scientists are used to a standard structure that emphasizes on literature background, study design, and interpretation of data. However, building a successful investor pitch deck requires a different set of considerations, framework, and skills than an academic presentation. In addition to scientific merit, an investor pitch deck must showcase the superiority of the management team, market potential, business model, and competitive landscape, among other factors.

Unfortunately, many scientists who become life science CEOs often assume pitching investors is the same or similar to presenting at an academic conference, and they begin a fundraising campaign on the wrong foot. This article summarizes as 11 tips the recommendations for building a successful pitch deck from experienced industry veterans and investors who we interact with on a daily basis.

1. Keep it simple. Pitch decks serve as a vehicle to initiate a conversation. Try to draw a smooth and intriguing story line about where your invention came from and where you are planning to go. Ideally your pitch deck should be anywhere from 10-15 slides. Far too often do we come across entrepreneurs with pitch decks of 20 or more slides and while the data may be compelling, the reality of the matter is that investors do not have the time to review that amount of material on every opportunity they are presented with. Do not try to answer all possible questions in your pitch deck, simply aim to provide the investor with enough information to convince them that it is worthwhile to hold an in-person meeting.
2. Begin with the conclusion. Academic presentations describe a journey of scientific investigation that leads to a discovery or a conclusion. By contrast, a pitch deck should open with a high-level overview of the entire pitch. Time is of the essence. Investors want to know within the first two slides why they should care about this innovation, what is your solution, and what are the opportunities and risks.
3. Showcase your team. Standard academic presentations do not mention teammates until the last slide; however, when pitching investors, you and your team are as important as your science. Who are you? What is your contribution to the company? What credentials do your teammates have? Are they award-winning scientists or seasoned business professionals? Showcase the members of your team. Remember, investors fund the science and the team.
4. Describe the “pain” in the market. Explain where the current problem is, how it impacts people’s lives, what the commercial opportunities are, and how you got started. This section should be a shorter version of the background section in academic presentations. Many entrepreneurs waste their time preaching common knowledge, such as telling investors that breast cancer is one of the top killers in women or orphan drugs are a big business. Remember that your job is to get investors’ buy-in by defining a pain specifically and providing a compelling case for how your technology will alleviate it.
5. Explain your technology. Where did it come from? How does it work? How will it make an impact? What phase of development is it in? How is your technology different from others? What is your “secret sauce”? Tell a succinct story of the journey you have been through to get to where you are today. Sell your science by carefully laying out data and results from studies and prototype-testing that support your claims. A lot of data is not necessarily a good thing, as it may be difficult to explain and comprehend. (Remember, this is not a thesis defense.) However, some scientists cut back on key data and only speak about the big picture. This approach makes their claims look groundless and untrustworthy. Try to get feedback from industry experts or veteran investors before you make your pitch. It may take a few tries to strike the right balance for your specific financing round.
6. Describe product pipeline and address the risks. Early stage R&D is risky, especially in life sciences; every investor knows that. Still, investors appreciate pitches that acknowledge the risks associated with the ongoing project and lay out risk management and mitigation plans. Provide a roadmap to risk reduction that includes milestones, such as filing patents to protect intellectual property, establishing a safety profile, and demonstrating superiority over competitors. Risk mitigation does not need to be a stand-alone slide, but it should be addressed in a presentation or during a Q&A.
7. Propose a roadmap to future exits. What are the potential value-inflection points and how long will it take to get there? Are you aware of potential acquisitions and recent exit valuations in your sector? Many investors will obtain this information during due diligence. That being said, they appreciate entrepreneurs who know such information, as it demonstrates a level of preparedness.
8. Present the finances. How much capital have you raised to date? How much more are you raising now? What is the planned use of these funds? What are the milestones you want to achieve (such as chemistry, manufacturing, and controls (CMC); animal toxicology tests; and first-in-human trial)? Although life sciences are notorious for high uncertainty, it is still recommended to have a two- to five-year financial projection so that investors know you will adhere to your budget and can be trusted with their money.
9. Choose graphics and language that are suitable for your audience. A common mistake made by first-time life science entrepreneurs is to overwhelm the investor with too much data and unnecessary jargon. Use crisp and easy-to-understand visuals to display data and save the details for an appendix to provide to investors upon request. Try to explain abstract ideas in a language that a layperson can understand and use analogies when appropriate. For example, instead of saying “the chelating agent binds to heavy metal ions and therefore reduces their concentration in circulation,” try saying “the specially designed molecule acts like a magnet that attracts metal ions and takes them away from your body.”
10. Touch on intellectual property and the competitive landscape. While having IP protection and a competitive advantage are strongly emphasized in IT and other industries, these factors are seldom the make-or-break points when it comes to investing in early stage life science projects. Given LSN’s experience and the expert opinions we received, these points can be addressed in the flow of a presentation, but they should not occupy too much valuable time that could be used to explain the science or introduce the management team.
11. Ensure continuity in branding and messaging. As Dennis Ford discusses in The Life Science Executive’s Fundraising Manifesto, a company’s communication flow should be seamless. A company’s tagline should lead into its four- to six-sentence elevator pitch, which dovetails into its one- or two-page executive summary and its 15-slide pitch deck. When new information is added, it must be fully integrated into the flow to build a consistent and easy-to-understand message.

It is important to note that this article aims to provide a starting point of building a pitch deck instead of a one-size-fits-all template. Every life science company is different. The pitch deck for an early-stage biotech start-up seeking seed capital to develop small molecule cancer therapy should look very different from that for a medical device manufacturer seeking growth capital to scale up operations.

Good luck pitching!

 

 

By Lucy Parkinson, Senior Research Manager, LSN

In last week’s newsletter, we presented an overview of innovation and investment in the cardiovascular space. This week, we continue this series, analyzing LSN data on the neurology sector. Investors often tell us that neurology is a challenging space, particularly when it comes to evaluating early stage opportunities; some investors feel that it’s harder to assess animal data or prototype studies in this space than it is in many others. Here, we take a look at the competitive landscape for neurology and the investors.

LSN tracks therapeutic assets for two areas of neurology: diseases of the nervous system and mental and behavioral disorders. The former is a far more robust area of innovation at present, with 646 assets in clinical trials. We have been able to determine the specific disease areas that 437 assets are targeting. (See Figure 1.)

For many severe neurological disorders, there is tremendous competition among treatments at present; more than one hundred Alzheimer’s cures are presently in clinical trials, as are dozens of potential treatments for Parkinson’s disease, multiple sclerosis, and epilepsy. However, the pipeline is limited or dry for many rare neurological disorders. Leigh syndrome, a severe pediatric disorder, has only one asset in the clinical stage. For some other indications that we track, including Charcot-Marie-Tooth disease and Steinert disease, no drugs are currently in clinical trials. Potential treatments for these rare diseases could qualify for an orphan drug designation, so an early stage investment could yield not only a life-changing result for thousands of patients but also an opportunity for an investor to benefit from limited competition and a long period of exclusivity after the treatment has received approval.

Less innovation is taking place to address mental and behavioral disorders; only 164 therapeutic assets are in clinical trials. We have been able to determine the disorders that 144 assets are targeting. (See Figure 2.)

There are fewer medtech neurology products in the development stage because they have a shorter development cycle. We have identified and categorized 119 such products that are aiming to treat neurological, psychiatric, and spinal disorders, and in 100 cases we were able to identify the type of device being developed. (See Figure 3.)

Some areas of innovation are seeing markedly more new products than others; electromechanical devices (such as neurostimulation devices) form a crowded competitive field, as do various forms of implantable devices, many of which are targeting the spinal care market. There is also a wide variety of neurological diagnostic and imaging technologies in development. By contrast, few inventors are developing technical aids for patients suffering from neurological disabilities.

Neurology innovation is occurring worldwide. The U.S. has the largest number of neurology companies in both the biotech and medtech sectors, while in other respects the distribution of biotech companies is quite different from the distribution of medtech companies. (See Figures 4 and 5.)

The UK, Japan, and France are among the top five countries that have the highest number of biotech neurology companies, but these countries fall behind Germany, Spain, and Switzerland when counting the number of medtech neurology companies in each country. Canada is a leader in both sectors.

Now, let’s take a look at the investors interested in the neurology space. LSN has spoken with the investment staff at 290 organizations that are open to investing in therapeutics in the clinical stage. (See Figure 6.) We also spoke with 386 organizations that are interested in neurotech devices that are in the development or clinical stages.

It’s interesting to see that if we look at investors interested in neurology therapeutics in the preclinical stage, we find a different pattern. (See Figure 7.)

Venture capital is the largest category of investors in both cases. But at the preclinical stage, angel groups, corporate venture capital funds, and foundations—all of which may be more prepared to take on risky neurology assets in return for the possibility of developing a new cure in the future—play a more prominent role.

On the medtech side, private equity firms show more willingness to get involved in products that have yet to achieve approval. (See Figure 8.) In many cases, these firms are interested in providing funds to companies that are close to receiving approval for their products and need capital for commercialization.

Where are these investors willing to allocate their capital? While many neurology investors are focused on the U.S. and Western Europe, a large number are looking globally, particularly those interested in the biotech sector.

In addition to the multitude of global neurology investors, LSN researchers have spoken with investors who are interested in investing regionally around the world.

Both global and local capital provide possibilities for companies in the neurology space. No matter where your company is based, we’ve found investors who would like to see what you’re working on.