Leaders in Pharmaceutical Business Intelligence (LPBI) Group

12:30AM – 10/1/2014: Company Presentations @14th Global Partnering & Biotech Investment, Congress Center Basel – SACHS Associates, London

Reporter: Aviva Lev-Ari, PhD, RN

 

Real Time Media Conference Coverage  –  Business and Scientific Channels by:

https://pharmaceuticalintelligence.com

Early Stage Investment

• Hakan Goker, Director MS Ventures

– Participation of Corporate creation: 48% of new corp creation in Europe is via VCs

– early stage investment – Entrepreneur

– Serial Investors – what is the valuation process

– large institutions – where are the good fits, challenges in early stage funding?

– early stage involve understanding very complicated Science, acquisition in Pharma – Mechanism effect on Disease in the  past

– in the present public pressure on big Pharma in a therapeutics area – leverage focused R&D via a lower cost investment is done externally

– cash is available

– Pharma Ventures invest NOT in what VCs invests

– BIOTECH is the faster and cheaper pharma

– If financial are sufficient is taking additional external financing smart to do? – Mix sources of finance — are not successful since the 2009. On the venture side it did not apply.

– In Europe companies do get valuation like in the US sometime

• David Sabow: Head of Life Sciences, Silicon Valley Bank

– trend in Europe

– Super Angels

– Venture Debt – is never welcomed, what are the drivers a reaction to later stage pipeline, or R&D

– Capital is available – concerns: Competitive insight

– increasing value is the name of the game any method works, mix financing source is included

Panelists:

• Bernd Goergen

– Life sciences engage Super Angels, trend declined corporate

– comparison in financing Europe vs US/UK on information asymmetry

– VCs feel better if a corporate investor is involved

– without European investor hard to get US money

• Frank Kalkbrenner

– Boston, SF easier to get Early stage investment

– Europe, mainland – Corporate venture funds are active in Netherlands and Germany

– Venture arms of Pharma involved in early stage

– UK and Boston fund are very LOCAL in proximity, no investment is more than 100 miles away

– no shortage of opportunities in Europe, some investments overseas, In UK, In US — so missing in Germany – less experience in commercial negotiation with Universities, Scientific base, Money, People – success requires Professional management — is not abundant in Europe vs UK, US – different cunture in Europe, CEO who failed in Europe is doom, in the US is hard

– 100% of all products and Phase IIa is from internal research, Gene therapy, cant cover internally, investing in external venture gives access to innovation not to be provided inside

– access external innovation, equity investment is one tool, Early investment to become an equity relations

– Big Pharma Venture Arm is a strategic instrument rather than an ROI strategy

– two corporate ventures, two institutional ventures

– later stage development requires ofter institutional investment

– time is money, get additional financing to get to market as soon as you can, even if you are able to finance operations

–

• Soren Moller

– difficult market for early investment

– shareholder in Scandinavia: Private investment can be a hurdle

• Ulf Grawunder, CEO, NBE Therapeutics, GmbH

– difficult to fund Early stage concepts

– Conventional VCs: funding by VCs are worry of the long tern to ROI – ten years on average – pay to Limited Partners

– Private VCs that reinvest in ventures may consider Early Stage

–  Seeking government grants, non diluted, Patents from Universities, Team up with Academic institution to help in value creation, for proof of concept,

– compelling data, academic collaboration, IP protection

– corporate structure need to allow all types of investments: Partners requires equity for very small investment in Switzerland – non dilutive is very important

– partnering to early on requires sharing equity to early

– Option of first refusal not a strategy

– GSK – no interference with pipeline

– Entrepreneur has concern of IP in due diligence  – internal to Pharma research input on external is important

Questions from the Audience

– asset financing vs VCs

– differential valuation

#biotech#startup #investing #venturecapital #pharmanews

@SachsAssociates@pharma_BI @BiotechNews