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Slideshow of July 17, 2012's presentation at the Donald Danforth Plant Science Center about VC funding for the life sciences in Missouri.

Slideshow of July 17, 2012's presentation at the Donald Danforth Plant Science Center about VC funding for the life sciences in Missouri.

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  • 1. Life Science VC Gap in Missouri July 17, 2012
  • 2. 2012 BIO Benchmarking Class Senator S. Kiki Curls Representative Sue Allen Kansas City - Democrat 
 Town & Country - Republican Majority Caucus Secretary
 Representative Anne Zerr Representative Mike Kelley St. Charles - Republican 
 Lamar - Republican 
 Representative Casey GuernseyRepresentative Shelley Keeney Bethany - Republican 
 Marble Hill - Republican 
Majority Caucus Chair Representative Gail McCannRepresentative Marsha Haefner Beatty St. Louis - Republican 
 Kansas City - Democrat

  • 3. 2012 BIO Benchmarking ClassRepresentative Margo McNeil Representative Pat Conway Florissant - Democrat 
 St. Joseph - Democrat 
Representative Jeanne Kirkton Representative Steve CooksonWebster Groves - Democrat 
 Fairdealing - Republican 
 Representative Bart Korman High Hill - Republican 

  • 4. AnnouncementsJuly 19, 2012 - The JOBS Act, Reg A, Small Cap IPO and Crowdfunding The Federal Reserve Bank of St. Louis Information about the event is available as you exit.Sept. 13, 2012 - Next PLSN Meeting Details coming soon!
  • 5. PanelDan Broderick – Senior Fellow, BioGenerator and Vice President, BioSTLKaren Spilizewski – Vice President, RiverVest Venture PartnersJ. Joseph Schlafly III – Senior V.P. & Director of Public Finance, Stifel Nicolaus and Co.
  • 6. The Venture Capital Industry and How it Affects BioSTLDAN BRODERICK
  • 7. Plant and Life Science NetworkJuly, 2012D. J. Broderick
  • 8.  NYSE.com Investment Company Institute (12/31/2010) Hedge Fund Reports (12/31/2010) Thomson Reuters (12/31/2010) PWC MoneyTree (12/31/11) NVCA Angel Capital Association Thanks to John Taylor, V.P Research, NVCA
  • 9. $16,700 $18,000 $16,000 $14,000 $12,000 $10,000 Venture capital $8,000 $5,666 = 0.2% of US GDP $6,000 $4,000 $1,917 $800 $2,000 $177 $0 NYSE Mkt Equity Mutual Hedge Funds Buyout Venture Value Funds Funds (Est) CapitalUS GDP is $12.5 Trillion
  • 10. 1,200 $1,2001,000 $1,000 800 $800 600 $600# 400 Firms $400 200 $200 $B Assets Un 0 $0 1985 1988 1991 1994 1997 2000 2003 2006 2009 1986 1989 1992 1995 1998 2001 2004 2007 2010 1987 1990 1993 1996 1999 2002 2005 2008 # Firms AUM $B Active Firms
  • 11. 120100 80 60 40 20 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $B 10 12 18 31 58 107 38 4 11 19 31 32 31 26 16 14 18
  • 12. 300 250 200 150 100 50 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011# LS FF 153 192 202 166 192 167 173 165 185 206 268 259 242 157 188 153
  • 13. 180% 170% 160% 150% 140% 130% 120% 110% 100% 2003 = 100% 90% 80% 2003 2004 2005 2006 2007 2008 2009 2010 2011EUS All FF 100% 123% 138% 163% 176% 166% 103% 135% 155%US LS FF 100% 112% 124% 159% 152% 139% 94% 113% 91%
  • 14.  Uncertain regulatory environment – FDA Higher cost of development ◦ Due to regulatory  Cost of pre-IND/IDE studies  Cost of human trials  Increased numbers, tests and length of follow up “Allowing” Angels to “de-risk” the deal ◦ To raise money today most companies need…  at least drug safety data – or  first in man device studies
  • 15. 60% 50% 40% 30% 20% 10%% of0% total VC investment $ 1981 1984 1987 1990 1993incl. Pharma 2001 2004 2007 2010 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 1983 1986 1989 1992 1995 1998 2002 2005 2008 1H11 % Disk Drive % Cln Tch % Bio 1996 1999 % Software
  • 16.  Iowa, Indiana, Illinois, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, Oklahoma, South Dakota, Wisconsin
  • 17. % of Deals Done 4Q 2009 through 3Q 2011 Healthcare Services, 11, 5% Biotech, 118, 49% Medical Devices, 110, 46%# of Deals roughly even between devices and biotech,
  • 18. $ Invested 4Q 2009 through 3Q 2011 OK,KY,ND,NE IN KS MO 3% MI 2% MNWI 6% 3% 2% 27%9%IA9% OH IL 15% 24%
  • 19. $7,000 700$6,000 600$5,000 500$4,000 400$3,000 300$2,000 200$1,000 100 $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 9M 0 $M Inv 673 931 1,186 2,009 3,222 5,970 2,310 1,248 1,053 1,091 1,203 1,169 1,645 1,756 1,197 1,692 1,362 # Deals 204 263 341 340 407 611 364 285 224 231 212 249 314 340 261 300 266
  • 20. $ Invested 4Q 2009 through 3Q 2011 HC Services 4% Other 10% Bio Bus Products 26% 5% IT Svcs 8% Ind/Energy Devices 8% 15% Media/Ent SW 10% 14%41% of $ invested in life science related companiesAg not a category by itself – yet!
  • 21.  With R$D budgets being cut corporations are turning to alternative sources for new products like start-up companies Corporate VC will be a more important source of funding Need to understand strategic needs of the investing corporation
  • 22. 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Q1 Q2 Q3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2011 2011% Deals w/CVC $ 17.3% 14.9% 16.5% 16.3% 16.5% 18.1% 18.8% 12.8% 13.6% 15.1% 14.4% 15.6% 15.2%% of Ttl $ from CVC 9.1% 6.9% 6.9% 6.7% 7.6% 8.1% 7.7% 7.3% 8.4% 8.6% 9.4% 9.2% 7.3%
  • 23. Source – Angel Capital Association
  • 24. Life SciencesLife science investing is popular with Angels
  • 25. Percentageof Groups Angels clearly like investing at the stages important to BioGenerator
  • 26.  Angel investors are an increasingly important source of capital for start up companies ◦ Amount of invested capital in 2011 about 21 billion dollars!* ◦ Almost equal to Venture Capital Firms This is not going to change in foreseeable future * Burrill and Associates
  • 27.  Existing ◦ VC  MHIN, NVCA, Past co-investors ◦ Angels  Arch, FTL Capital Emerging ◦ Other VC’s – new relationships developing ◦ New Angels  M-COIN, Hyde Park – Many more  Seek new Angels – Locally – most important ◦ Corporate investors
  • 28.  Careful evaluation of financing risks Thoughtful, (expert) design of seed funding milestones – value drivers Deal selection – needs to be “special” ◦ Solve a big problem ◦ Extraordinary team ◦ Reduced financing risk – quick to human data ◦ Pre-series A value proposition  Data, fill out team, human data, IDE/IND (or equiv.) ◦ Some deals requiring VC funding will not be done
  • 29.  BG is a credible source of deals – life blood of VC’s Amount of NIH and other Government sources of grants (RO1 and SBIR/STTR) ◦ Washington University, St. Louis University, UMSL, Donald Danforth Plant Science Center Infrastructure – existing and emerging ◦ Bio STL – very impressive, momentum builder ◦ BAL – best in class, nothing else like it ◦ Deal pace – 26 deals, ~30 months ◦ i6, EDA grants, local cooperation/coordination ◦ BG, TREX, ITEN, Helix, Arch Grants etc.
  • 30. Venture Capital in the Midwest. What Works?KAREN SPILIZEWSKI
  • 31. Plant and Life Sciences NetworkJuly 17, 2012Karen Spilizewski
  • 32. 2011 US Venture Investing Total VC investment in 2011 = $32.5 billion VC investment in Healthcare = $9.1 billion
  • 33. Total US Healthcare Financings $M invested$7,000$6,000$5,000$4,000$3,000$2,000$1,000 $- 2005 2006 2007 2008 2009 2010 2011 Medical Devices and Equipment Biopharmaceuticals Healthcare Services & IT
  • 34. Midwest Health Care Venture Investment (By State)State 2011 2010 2009 2008 2007 $ Millions # of Cos. $ Millions # of Cos. $ Millions # of Cos. $ Millions # of Cos. $ Millions # of Cos.Minnesota 223.3 24 138.7 20 199 23 318.9 22 296.1 25Ohio 177.8 67 147.2 47 105.4 40 189.1 43 295.5 44Missouri 168.7 9 19.9 9 65.8 8 50.2 11 69.6 7Western PA 67 25 86.2 20 37.8 24 126.2 33 101.4 17Wisconsin 53.8 9 51.3 9 16.2 10 48.5 8 56.2 12Illinois 44.2 9 160.9 11 38.9 8 97.3 13 125.5 7Michigan 30.8 16 76.3 12 102.2 14 105 12 56.2 5Kansas 18.5 2 14.5 13 4.3 5 16.9 9 56.6 6Indiana 14.1 9 25.05 16 76.3 14 75.4 7 135.6 10Kentucky 11.5 7 11.4 4 97.3 7 19.2 6 32 4Iowa - - 7.3 1 36.8 3 4 1 - -Total 809.6 178 738.9 161 780 156 1,050.5 165 1,224.7 137 Data compiled by BioEnterprise from various sources
  • 35. 2011 Missouri Healthcare Deals• Advanced ICU Care - $8 million• Cardialen – $0.74 million• Endostim - $5.55 million• Essence Group Holdings - $61 million• Nawgan - $6 million• Pulse Therapeutics - $1.33 million• Venti - $15.1 million• Veran Medical Technologies - $15 million• HealthMEDX - $56 million
  • 36. Midwest Health Care Venture Investment (2011 - By Sector) $251 $295 Medical device Health care IT and service Biopharmaceutical $259Data compiled by BioEnterprise from various sources
  • 37. How Ohio Started in 2002• Private/Institutions – Focus on entrepreneurs and innovation – Technology transfer – Venture firms and professional services• Philanthropy – Fund For Our Economic Future: $90 million – Investments for capital formation• Public – State of Ohio: $2.3 Billion+ Capital, Operating Support, Business Attraction
  • 38. 2002: Ohio Commitment• $1.3 Billion, 10-Year Technology Initiative – Ohio Third Frontier – Funding for: • Research distinctiveness and translation • Capital formation and attraction (seed and venture) • Entrepreneurial infrastructure (inc. BioEnterprise) • Company acceleration – Collaboration required, nationally assessed• Capital – Ohio Capital Fund – $250 million to invest as LP – High-tech growth loan fund• Annual general operating support• Plus related business attraction and physical development
  • 39. Result: Growth in InnovationCleveland Healthcare Equity Investments$ Millions Avg.142COMPANIES FUNDED: 5 6 13 21 16 22 28 26 21 33 35
  • 40. MOBIO Plans and StudiesJ. JOSEPH SCHLAFLY III
  • 41. PANEL DISCUSSION AND Q&A

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