Is traditional life science venture capital a resource for cell therapy companies yet? Edmond de Rothschild Investment Partners

Transcription

1 Is traditional life science venture capital a resource for cell therapy companies yet? Gilles NOBÉCOURT Partner, Life Sciences Edmond de Rothschild Investment Partners PRIVATE EQUITY

2 Content 1) Venture Capital in life Sciences 2) Status of the biotech food chain 3) How Cell Therapy fits in 4) Conclusion 2

3 Content 1) Venture Capital in life Sciences 2) Status of the biotech food chain 3) How Cell Therapy fits in 4) Conclusion 3

4 Venture Capital in Life Sciences 4

5 Venture Capital in Life Sciences What VCs actually do Provide Limited Partners with a proper return on investment Transform liquidities seeking return into ressources for companies developping new therapeutic approaches Share the risk by buying shares of these companies Participate into the value creation by supporting the company from early stages to late clinical phases Take part in strategic decisions through BoD participation Expose the company to key players (pharmas, biotechs, KOLs, other investors ) Professionalize the structure of the company Hiring key talents Bring expert knowledge about market dynamics and historic cases Help in the M&A and IPO processes Supporting companies to turn their technology & products into successful businesses 5

6 Venture Capital in Life Sciences Hype Curve in biotechnology Expectations «This stuff should be in drinking water» «Interesting» «I hear there are some problems» «When used appropriately this is valuable» «Never heard of it» «I wouldn t give it to my dog» Time 6

7 Venture Capital in Life Sciences Hype Curve in biotechnology Technology trigger Peak of inflated expectations Trough of disillusionment Slope of enlightment Plateau of productivity Expectations Scientific discovery. Early in vitro PoC. First publications in specialized journals. Some start-ups set up. Some specialized VC funding. First preclinical successful stories. Publications in top scientific journals. General media interest «cure of cancer». Pharma R+D. Many start-ups set up. Alliances and acquisition deals. Specialized and unspecialized VC funding. Efficacy and toxicity concerns of clinical candidates. Delays. Pharma quit internal R+D. Other promising technologies arise. Little VC funding. Liquidation of companies. Survivors stand. Technological improvements allow for better efficacy and toxicity profiles. 2 nd and 3 rd generation drugs in clinical phases. New targets and uses for the same technology. Alliances deals. VC funding cautiously comes back. Clinical validation. Platform validation. Acquisition deals based on clinical benefits. VC exits. IPOs. Regulatory approvals. Products hit the market. Blockbusters. Time 7

8 Content 1) Venture Capital in life Sciences 2) Status of the biotech food chain 3) How Cell Therapy fits in 4) Conclusion 8

9 Status of the biotech food chain Our model Funding Funding + Value creation Pipeline Large companies Limited Partners Venture Capital Start-ups Pipeline Financing IPO 9

10 Status of the biotech food chain Our model Proceeds Funding Funding + Value creation Pipeline Large companies Limited Partners Venture Capital Start-ups Pipeline Financing IPO Distributions Proceeds 10

11 Status of the biotech food chain How tough is it? 11

12 Status of the biotech food chain Number of venture capital funds active in life sciences US EU Concentration of the players in Europe and in the US Source: Nature Biotech, May 2012, Volume 30, Number 5 12

13 Status of the biotech food chain Financing and IPOs in US US biotechnology IPOs by year Source: Ernst & Young, Capital IQ, Biocentury, Medtrack and Venture Source, Elsevier Business Intelligence figures correspond to data available until October 31st. 13

14 Status of the biotech food chain M&A Number of deals and transaction values 14

15 Status of the biotech food chain M&A Stage of lead program and time to sale Source: HBM Partners 15

16 Content 1) Venture Capital in life Sciences 2) Status of the biotech food chain 3) How Cell Therapy fits in 4) Conclusion 16

17 How Cell Therapy fits in Financing deals (private placements +IPOs) Number of deals 1800 Total raised (USm$) Source: Elsevier BI 17

18 How Cell Therapy fits in Acquisition deals Number of deals 1000 Average total deal value (US$m) Source: Elsevier BI 18

19 How Cell Therapy fits in Alliance deals Number of deals Source: Elsevier BI 19

20 How Cell Therapy fits in Global pipeline: Number and origin of compounds Number of compounds per phase Technology origin 109 7% 14% North America Europe+Israel % 51% South Korea +Japan Other Phase 1 Phase 2 Phase 3 Launched/registered Source: Citeline Pharmaprojects 20

21 How Cell Therapy fits in Indications in advanced pipeline Registered/Launched Phase 3 3% (1) 12% (4) 19% (6) 66% (21) 39% (10) 19% (5) 19% (5) 23% (6) Source: Citeline Pharmaprojects 21

22 How Cell Therapy fits in Global pipeline: autologous vs. allogeneic Autologous vs. Allogeneic therapies 33% 36% 38% 42% Allogeneic Autologous 67% 64% 62% 58% Source: Citeline Pharmaprojects Launched/registered Phase 3 Phase 2 Phase 1 22

23 How Cell Therapy fits in Cell Therapy listed companies* Company Product Sipuleucel M-Vax Cvac Remestemcel-L Diabecell Dasiprotimut-T Technology Autologous dendritic cells Autologous modified tumor cells Autologous dendritic cells Allogeneic mesenchimal cells Encapsulated porcine pancreatic cells Autologous modified tumor cells Indication Prostate cancer Melanoma Ovarian Cancer Transplant rejection Diabetes non-hodgkin lymphoma Year approved / registered Countries approved / registered October 2010 July 2000 October 2011 May 2012 December 2010 December 2013 US/EU Australia (withdrawn) Dubai Canada Russian Federation EU Source: Citeline Pharmaprojects *US public companies with marketed or registered non-graft/regenerative products. 23

24 How Cell Therapy fits in Cell Therapy listed companies: stock price evolution NASDAQ BIOTECH NASDAQ-100 LivingCell Dendreon Avax PrimaBiomed Accentia 24

25 How Cell Therapy fits in Current pipeline Approved/registered therapies Mostly tissue / bone regeneration / grafts Approved in small markets, pursuing clinical studies in larger ones Mosty autologous Companies underperforming in public markets Pipeline candidates Large pipeline in development Moving towards allogeneic approaches Diversification of indications 25

26 Content 1) Venture Capital in life Sciences 2) Status of the biotech food chain 3) How Cell Therapy fits in 4) Conclusion 26

27 Conclusion VCs transform liquidities seeking return into ressources for companies, thus need to generate high returns to LPs in a reasonable period of time Oppportunities must acquire commercial value within the investment timeframe through Clinical efficacy and acceptable therapeutic window IP Manufacturing Favorable cost/benefit ratio for the healthcare system Only then can Cell Therapy applications become investment opportunities for VCs 27

28 Venture Capital in Life Sciences 28

29 Thank you 29