By Lucy Parkinson, Senior Research Manager, LSN 

This week, we are featuring four additional investor mandates, focused on Therapeutics, Medical Device, Diagnostics, and Healthcare IT. LSN Research has seen investors from all across the globe looking for investment opportunities and would like to share more of a sample of the types of information that we gather.

 

1. Therapeutics: US Based Venture Arm of Chinese Family Office Seeking Preclinical Biologic Opportunities

A private investment group that was founded by a single family out of Hong Kong has four operations based in Shanghai, Beijing, Hong Kong and the US. The US-based venture investment arm is actively seeking new investments in the life sciences across the US, and it occasionally invests in companies in Europe. The group focuses on pre-clinical and clinical stage companies. The investment size will vary and typically it ranges from $2 million -$10 million. The group has no set number of allocations over the next 6-9 months.

In the life sciences the firm is looking for new investments primarily in the biotech therapeutics sector. The group will also look at medical devices and diagnostics opportunities, however, which are not their current focuses. For therapeutics, the group is most interested in biologics. The group invests in a variety of therapeutic areas with a focus on oncology. The group generally invests in pre-clinical stage companies without clinical data, and it also syndicates with other investors for clinical-stage investments.

The group invests in privately held life science companies. The group is generally not interested in commercial-stage companies.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com

2. Medical Device: Family Office Fund Seeking Early Stage Medical Devices

A family office/venture capital firm based in New York firm manages an evergreen fund that seeks to make seed, venture, and growth equity investments in early to mid-stage medical device companies, but will also consider secured debt to help revenue generating companies with short term cash flow issues. The firm will also consider pre-seed investments. The firm can allocate anywhere from $1M to $10M per company, but generally allocates around $8M. The firm typically does 3 rounds of financing with an initial investment of around $3M. The firm is geographically agnostic, but highly prefers to invest in companies that are based in the US. The firm seeks to make about 3-4 allocations in the next 6-9 months.

The firm is currently looking for medical device companies with a strong emphasis on products with a 510(k) regulatory pathway. In terms of subsectors, the firm is looking for products specifically in the areas of interventional radiology and cardiology, spine/orthopedics and minimally invasive surgery. The firm is generally opportunistic in terms of indication.

The firm is looking to invest in companies with a management team with a track record of success in the healthcare industry. However, the firm is generally flexible and does not require a full management team. The firm can assemble the management team over the course of the investment.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com

3. Diagnostics: Global Diagnostics Firm Looking to Make Strategic Investments

A global diagnostics companies is looking to form partnerships and make investments in emerging life science companies. The firm is highly flexible about the structure of its investments, and primarily invests in North America and Europe. The firm looks to act as a long-term, highly activist investor.

The firm primarily invests in the diagnostic imaging sector, including imaging devices and agents, CT and MR technologies, and angiography. The firm prefers to invest in companies at or near the market approval stage but is open to considering investments in earlier-stage companies. In addition to imaging technologies, the firm is also interested in cardiology devices, and other interventional devices including delivery devices.

The firm does not provide passive financing; the firm only invests in companies developing products that the firm would eventually market and sell.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com

4. Healthcare IT: VC Arm of Large Conglomerate Seeking HIT and Software Enabled Device Opportunities

The venture and expansion capital arm of a large conglomerate has approximately $270 million in total assets under management. In 2014 the firm closed a fourth venture capital fund at $185 million. The firm is current seeking new opportunities in the life science space. The firm’s initial equity investment range from $3-7 million, but are typically $12-$15 million total through subsequent rounds. The firm will only consider investment into US based firms.

The firm is most interested in the medtech, diagnostics, and information providers spaces. The firm is specifically looking for healthcare IT firms within the information providers space. Medical Devices with a significant software component are also of high interest. The firm is very opportunistic within the areas of diagnostics and medtech, and with that being said the firm would be willing to look at firms that fall within the full gamut of medtech and diagnostics subsectors.

The firm is most interested in early to growth stage companies generally investing in series A and B rounds. For HCIT businesses, the firm typically looks for companies with $3 million or more of revenue. For med tech the firm generally invests in businesses post design freeze and typically does not take product development risk.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com

By Michael Quigley, Director of Research, LSN

In order to provide our readers with a glimpse into the big pharma internal review process for collaborations and in-licensing, I recently sat down with an ex-sourcing executive from such a group. He stated that the process generally takes from 6 to 9 months from the initial contact, but can last longer as the company goes through a series of both internal meetings as well as meetings with the external innovators. The primary sources for innovation include both partnering and scientific conferences, (particularly for early stage technologies) as well as investors and bankers (particularly for later stage technologies that have already garnered some clinical data). It is generally members of both the scientific or technical review and business development teams who attend these events, speak directly with external partners, and are responsible for identifying these new opportunities.

Once an initial contact is made, if there is interest on the pharma company’s end, they will ask to review the pitch deck and executive summary, which should provide a clear description of the technology. This process of review is led by the business development team, and they manage the technical team that actually reviews the scientific merit of the innovation. Also during this time, there often is another scientific management team that is reviewing the strategic value that the innovation holds, given the pharma company’s current pipeline and strategy. Late stage assets generally get into this process sooner and involve a bigger team on behalf of the pharma company than preclinical opportunities, but that timeline can also be a function of the pharma’s interest in the technology.

If sufficient interest is garnered at this stage, the review will also include legal teams looking into the IP of the technology, regulatory teams evaluating clinical challenges and advantages, as well as a commercial viability team looking into commercial market factors. A solid pitch deck should provide information relevant to all of these teams who might be a part of this process. From here the pharma company will schedule a call (generally led by the business development team along with a technical scientist or others) to plug any holes that the pitch deck may have. If all goes well in this call, a face-to-face meeting will be arranged as a next step. These often take place at conferences where both parties are in attendance or mutually agreed-upon locations.

This face-to-face meeting will serve to answer any additional questions either party may have, as well as to give the big pharma company a stronger feel for the management team, especially in cases when a collaboration is being considered. At this point, at least several weeks from the initial contact, the pharma company may look to set up a data room and, if necessary, sign a CDA for the opportunity. By having a data room already set up with the relevant materials, you can help to expedite this process. Due to the number of opportunities that a pharma group may review in a given year, they often are not willing to sign a CDA until they have achieved this level of interest, to avoid excessive legal liability.

From here the internal review team will pull together a formal report on the opportunity to present to upper management, who will ultimately be making the final decision. The drafting and review of this report can be laborious, further lengthening the time required to finalize a deal. Often, in reviewing the strategic relevance of the opportunity, upper management will ask their internal review team to gather more information from the company, adding more weeks to the process. Once upper management has given the green light, lawyers from both sides will begin drafting the contract, a document that can be hundreds of pages in length and can take weeks or months to finalize.

If there is one key takeaway from this piece, it should be that the time this process requires is lengthy, so patience is necessary. This also speaks to the importance of entrepreneurs starting dialogues with potential investors early. As there is a very real possibility that, even toward the last phases of the process, the deal will fall through, it is an astute business practice to engage with multiple potential pharma partners simultaneously.

The more you can understand the internal process a pharma company maintains to review technologies, the better your chances of success. I hope this article was able to provide you with some new insights into that process, and I wish you the best of luck in your endeavor!