10:45AM – 9/30/2014: Keynote Speech by Reinhard Ambros, Global Head, Novartis Venture Fund @14th Global Partnering & Biotech Investment, Congress Center Basel – SACHS Associates, London
Real Time Media Conference Coverage – Business and Scientific Channels by: http://pharmaceuticalintelligence.com
Dr. Rosenberg:
List of acquisitions from 2003 to 2014 reviewed.
LEARNINGS:
1. Synergies are overestimated
2. Preserving Culture very important
3. Business drivesrs
4. Bolt on acquisition
5. Flexible deal structure
6. Prepare to take risk within financial responsibility
TRANSFORNING Novartis
Science dominates: six divisions: pharma, Sandoz, Alcon — each a Leader and a growth engine in their sectors
Three smaller division
OTC
Animal Health
Vaccines \: Maningitis — lacking global scope
Market attractiveness
competitive position
Synergies across division — hard to campture
NEW focus on smaller divisions: Global Scall Growing, Partnering or Diversing
Acquisition of Oncology, selling the Diagnostics. Adjustment of values very difficult.
SUMMARY
– M&A vital continues
– other deal structures – precision M&A vs Mega deals
Leadership in key areas of portfolio: Oncology, CHF – early stage partnering with IB, various Groups needs partnerships to maintain strategy outlined.
DISCUSSION
Early investment with UPenn, Therapeutics unit, Oncology and autoimmune diseases,
Tracking CHF, Immunology, oncology, Opthalmology — no dogmatic view. NOT active in HIV, HTN, advances not clear
11:00 AM Investment
Reinhard Ambros, Global Head, Novartis Venture Fund
Investment vs Reserves, active VCs, if a deal is made, imitation by other investors. VCs to be chosen if they can carry a transaction throughout the cycle.
US Inverstments in 2013 30 Billion
Healthcare: 5 Billion
In 2013 Series D declined 2011 – 2012 – 2013, same trend with Series F 77% decline
- European investments are ~30 – 50% smaller vs US Investments
- Return multipis of Healthcare VC funds over time
- Cash-on-Cash multiple performance Health Care VC: 12 years to get your money nback, 34% never get their money back.
- 2013 in the target zone – 5% returned x2 on original investment.
- Why is it so hard? BENEFIT/RETURN: Innovation for Patients must be Superior
- Unmet need/Therapeutic Impact; Management Experience: Novel proprietary Science/understanding the Mechanism: Capital efficiency
- 5+ New Investments per year 2011-2014: Therapeutics, Diagnostics and Devices
- 2/3 US, East Coast and West Coast
- UK and Switzerland in Europe
- NVF – EXITS 2012, 2013, 2014: Oncology – Celegene; Oncology -Inflammation: Takeda-Millenium; TTR amyloid: Pfizer; Vaccines: Takeda- Millenium
- Novartis Venture Fund: Innovative and Successful
- NVF Structure:
- – evergreen fund structure: >55 private companies; $900 M
- CONCLUSION
- INVENTORS: Biotech great: INVESTORS: endurance, differential advantage – matters
Chaired by:
Genghis Lloyd-Harris, Partner, Abingworth LLP
NOW LIVE: Creative Destruction – 7 Panel Members of the Panel
1. First time investment, market was 13 billion, one investment was 11Billion, undervaluation of Pharmatech, How many in Europe
2. Pace of new companies formation, if too many companies, not enough finance available
3. Is early stage very risky, yet?
4. Distructive technolotion, why they are distructive?
5. CEO first time – vs. a decade of experience – how to handle a VC?
Panelists:
- Barbara Dalton, VP Venture Capital, Pfizer Inc. #6
Last 3 years 15 investments, 1/2 in Europe, no 1st rounds, After 2008, slow revival, 2009, or 2013 — new comapnies were form, the system will sort, if biotech are started, more time to incubate. Distructive Category: Not therapeutics, but in PLATFORMS, EpiC, STCS – diagnose of Cancer, Celegyne – gene therapy in large populations, Manufacturing technology – Global manufacturing, shipping containers, vs stainless steel, plug and play mobile for manufacturing, parts for this platform. Big Iron, MRI, radiation treatment and Oncology treatment not in sequence but in same time – Chemo therapy development will benefit.
– Pitch — first time CEO, sales person, not Car salesman, in depth in the Science, finance is not enough. Scientists, needs to realize that they are tested by VCs, 1st time CEO, after PostDOcs, Microfluidics from Stanford represent success.
– Importance of the CEO, changing CEO occurs frequently, , Former CEO to become CSO and stay in the company, bring a new CEO, understand pharmaceutical development, coaching CEOs by VCs -firing CEO, on a regular basis provide feedback.
- Björn Odlander, Founding Partner, HeathCap #7 – 1 Billion
Majority in Europe 2 out of 7 start ups
– #3 in Europe, per capita, Sweeden, UK, in Europe behind the US – syndication business, more VCs are needed in Europe
more VCs to form an ecosystems, Risks in Biologics exists. – NO platform and No diagnostics. In Therapeutics: opportunities: Pre R&D, regulatory not a constraints
- Carole Nuechterlein, Head of Roche Venture Fund Basel #1
Basel, S. SF,
3 never had investment 2 in Europe, one tools, one diagnostics
– do not be in a hurry, investment is like drops, in the US the amount of money is more generous
– focus on chemistry, sindicate, we expect companies to fail, part of the risk equation
– best in class, first in class innovative technology — they are distructive, revolution of the technology
– trust, transparency, communicate with VCs by CEOs, partnership is really important, ability to listen
- Christopher Earl, Sr. Advisor, MERCK Research Fund, US, #5 Early Stage
Series A deals but nor originations, hoping VPs to build resumes, geographic concentration, pull resources to get $100Million
CEo needs ability to pick up and put up with VCs
- Deborah Harland, General Partner, SR One #3
12 transaction 9 Early stage, 3 in Europe, not UK
– Advice to companies – you are nor yet ready, in Europe we need more VC to do Early Stage
– In the UK, Progenitor Cells generation, Progenital Therapeutics, discover cells for novice therapeutics
– CEO vs. the Founder, does not be the same, Mentorships, relations wiht Board sensitive
- Janis Naeve, Managing Director, Amgen Ventures #4
Eight investments since 2011 2 Europeans
– 100 companies formed , not enough capital is not an issue, Management is a bottle neck
– Citros Biotech, next generation protein manufacturing, biochemical reaction, fast mix test on structure of proteins
– CEO, experience vs Enthusiasm – some go together not always. Don’t ever surprise your Investors or Board Room Members
- Markus Hosang, General Partner, BioMedPartners AG #2
Europe focus, 6 investments, 10-11 mezzanine
EU is a considerations
– if the start is too small, management needs scrutinized
– first indication, Must be Oncology, some platform are not all
– Well balanced iwth VCs, Partners, no surprise by bad news, CSO vs CEO, some young postdocs do grow into CEOs
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