Johan Cardoen 15052017 Financing life cycle of a biotech company CASHIN TIME VCs AcquisitionsMergers amp Strategic Alliances Angels FFF Seed Capital Early Stage Later Stage Mezzanine ID: 1022770
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1. Scale up eventNovember 21, 2017Johan Cardoen15/05/2017
2. Financing life cycle of a biotech companyCASH-INTIMEVCs, Acquisitions/Mergers &Strategic AlliancesAngels, FFFSeed CapitalEarly StageLater StageMezzanine3rd2nd1stIPOPublicMarketSecondaryOfferingsPublic CompanyOperating Cash FlowConceptPrototype/ResearchProduct developmentProductintroductionProduct supportAdditional clinical dataSalesTT fundsPOC in placeFound NewCoValidate conceptComplete business plan
3. Value creation process in therapeuticsLong term, high risk* and capital intensive*overall POS: 8%Value inflection point
4. Biotech start-ups: business modelsPlatform companiesAsset-centric companiesDrug Discovery platform: LLC modelCombination of assets
5. Biotech platform companiesDiscovery/Technology platform is the differentiator and back boneRisk spreading: many shots on goal, suitable for deal makingLong timelines towards main value inflection pointFirst platform development and validationDevelop proprietary pipelineHigh capital needsTherapeutics, diagnostics and agbio
6. Asset-centricAsset is the differentiator and key value driverSingle shot on goalBinary: high risk, high gainLess capital intensive – but still long timelines“Build to Buy model”
7. Company age at time of acquisition per sub-sectorSource: Kempen 2017
8. Biotech in Europe: current financing climateStart-up financing: overall positiveMany VC funds raised successfully new funds over the past 3-4 years Many VC funds (also US based) scout actively for dealflow in EUDespite more IPO activity in the US (at higher valuations) – there are several biotech-friendly stock markets in EU (Euronext, LSE, Swiss Exchange, CSE...)
9. Scale-ups in Biotech: challengesSignificant capital required to finance a biotech (therapeutics) company towards a ‘cashflow-positive’ position Biotech investors are mainly VC funds-most closed-end funds (typically 10 yrs)High financing needs push sometimes companies pre-maturely towards exit mainly through a trade sale Biotech-friendly stock market is key for biotech companies to fuel path towards sustainability EU lack growth equity funds compared to the USMore and more EU biotech have dual listing
10. Scale-ups in Biotech: opportunitiesAvailability of growth equity in EU could contribute to move many EU biotech companies towards a sustainable biopharma company (e,g, in US Amgen, Celgene, Gilead, Vertex, Biogen etc...)Increasing liquity on EU stock markets for listed biotech companies prevent the risk of shifting the strategic decision center to the US