By Lucy Parkinson, Senior Research Manager, LSN

Last week, the LSN research team closed out the first month of the last quarter, tallying and analyzing the investor mandates gathered throughout October. Our researchers spoke with 109 deal-sourcing executives last month. As usual, these investors were highly diverse, hailing from 20 countries and representing 9 investor categories; 12 of the 109 were investors from family offices and private-wealth funds. (See Figure 1.)

LSN analysts continue to find that investors are showing slightly more interest in medical technology than biotech therapeutics and diagnostics. (See Figure 2.) However, most investors are open to funding a variety of life science companies, including those in the supplier and engineering sector (which includes software companies) and R&D service providers. Some are also open to biotech opportunities we class as ”Other,” which includes industrial biotech and agricultural biotech start-ups.

What stage of product development must a company be in to attract these investors? Of the therapeutics investors we interviewed, the greatest number are interested in products that have entered Phase I trials, but many will consider drugs that are earlier or later in the pipeline. (See Figure 3.)

The results were similar for medical devices: most investors are interested in products that have entered the clinical phase. However, we also spoke with many investors interested in devices that have already received FDA approval and are now on the market; many medtech investors see opportunities for devices that have already been proven scientifically and now require capital to build market share. (See Figure 4.)

Finally, where are these investors looking to invest? We found that more than a quarter of the investors we spoke with are willing to invest anywhere in the world. (See Figure 5.) The rest are focusing on one or more specific regions, with the U.S. and Western Europe being the most popular, unsurprisingly. Our researcher at our new office in Thailand, however, reached a number of investors with a specific focus on life science opportunities in Asia or Oceania.

Month after month, LSN researchers connect with a diverse group of investors who are interested in funding life science research, technology, and products. These investors differ greatly in terms of strategy and risk profiles, but all have an appetite for new technologies in the biotech and medtech sectors. If you’re a fit for a firm’s mandate, they may be the right partner to move your company toward commercial success.

By Tom Crosby, RESI Conference Manager, LSN

At the next RESI Conference in January, LSN will expand its Medtech Track. One of several new panels, Commercializing Medtech Innovation will focus on investors who consider later-stage opportunities, such as devices that are about to reach commercialization or those that have recently been approved and begun shipping. In keeping with the goals of the RESI Conference, this session will be compelling for earlier-stage device entrepreneurs as well, as panelists will discuss the nuances of emerging companies building relationships with investors.

Moderated by David Cassak, Managing Partner at Innovation in Medtech, the audience will hear from:

Dennis Purcell, Senior Managing Partner, Aisling Capital

Garheng Kong, Managing Partner, Healthquest Capital

Janice Borque, Managing Director, Hercules Technology Growth Capital

Michael Bianco, General Partner, Life Science Equity Partners

Mark Chin, Vice President, Longitude Capital

Panelists will introduce and cover the areas of the medical technology field where they see the greatest opportunities, and they will discuss how they work with medical technology companies ready to launch a product. How and when should you approach investors who are interested in the product commercialization stage? How do such investors assess your product’s market opportunity? How do you create a path from launch to profitability? Panelists will also discuss preferences for investment structure, region and team requirements, and how to better identify organizations that are actively investing in device companies that are near, or have reached, commercialization.

By Michael Quigley, Director of Research, LSN

At the beginning of October, LSN established a presence in the Asia-Pacific region so we could increase the number of mandates from investors who are unreachable during our normal business hours. Since that initiative began, we have interviewed more than 25 deal-sourcing executives interested in the life science space. These investors are based in several countries, including Australia, China, India, Japan, Korea, New Zealand, and Singapore. A significant reason for this success could be that the investors in these countries tend to be much more responsive to cold calling, which is less common in the region, and emailing. However, when analyzing the mandates from these investors, it appears that their desire for quality deal flow from U.S. and European companies is also motivating them to share their investment criteria with us.

Of the investors we have spoken with in the Asia-Pacific thus far, over 50% are global in their investment mandate. This is a higher figure than we have seen throughout North America and Europe, where about 30% of investors we’ve contacted are open to investing globally. Asia-Pacific investors maintain broad investment horizons to focus on the best opportunities available. In other respects, Asia-Pacific investors have broadly similar interests to investors in other parts of the world, with a slight advantage in overall interest in devices over therapeutics, and opportunities with early clinical data showing the strongest level of interest. . Unlike U.S. and European investors, however, many of the investors in this region are looking for companies with technology that is being developed for their local marketplace or could be adapted to it—a strategy worth considering if you haven’t already.

The Asia-Pacific region represents a massive pool of capital that entrepreneurs in the highly competitive market for life science venture capital should not be ignoring. If your company is in therapeutics, diagnostics, or medtech-devices, and if it is looking for a lead investor or the last member of a syndicate, be aware that Asia-Pacific investors are looking for such opportunities. LSN looks forward to uncovering more mandates from this region and will keep you updated on our findings.