Selling the Vision Early stage financial communications for life sciences

The situation

Crowded space 66 62 76 39 404 118 700+ companies in Canada and US

Looking at biotechs 1,400 biotechs in US 532 in Canada 1,570 in EU Growth sector in India, China and Brazil

1,400 biotechs in US

532 in Canada

1,570 in EU

Growth sector in India, China and Brazil

Life sciences venture capital 31 VC firms in Canada (1:45) 85 VC firms in US (1:16) 220 VC firms in EU (1:7) Canada - $583 million in financings ‘07 US - $10 billion in financings ‘08

31 VC firms in Canada (1:45)

85 VC firms in US (1:16)

220 VC firms in EU (1:7)

Canada - $583 million in financings ‘07

US - $10 billion in financings ‘08

Looking ahead to 2009-2010 “ Dark Age Ahead for European Biotechs” “ Canadian IPO Market Worst in 10 Years” “ US Biotech Financing to Reach Record Decade Low” Expect “Darwinian change.” - Mark Heesen, President, NVCA

“ Dark Age Ahead for European Biotechs”

“ Canadian IPO Market Worst in 10 Years”

“ US Biotech Financing to Reach Record Decade Low”

Financing

Capital for the life sciences R&D is capital-intensive Biotechs are ‘cash pigs’ Burn rate – rate of consumption of cash Time to failure = cash reserves + expected raises ÷ burn rate Seed capital Private equity Private equity, partnership IPO Discovery Pre-clinical Phase I Phase II

R&D is capital-intensive

Biotechs are ‘cash pigs’

Burn rate – rate of consumption of cash

Time to failure = cash reserves + expected raises ÷ burn rate

Applications Private equity – seed to late stage financings Initial public offerings Follow-on/secondary financings D ebt financings M ergers & acquisitions activity G overnment financings/grants P artnering

Private equity – seed to late stage financings

Initial public offerings

Follow-on/secondary financings

D ebt financings

M ergers & acquisitions activity

G overnment financings/grants

P artnering

Communicating effectively

My ‘theoretical orientation’ This is about marketing At the end of the day it’s a sales pitch We are selling a stake in the future financial benefit of intellectual property “ Upside potential” “ Nothing happens until something gets sold.” - Bob Metcalfe, founder, 3Com

This is about marketing

At the end of the day it’s a sales pitch

We are selling a stake in the future financial benefit of intellectual property

“ Upside potential”

Tools Website Investor presentation – the ‘pitch document’ C ollateral materials – the ‘leave-behind’

Website

Investor presentation – the ‘pitch document’

C ollateral materials – the ‘leave-behind’

Goals Hook the audience on your story Spark a conversation Set the stage for your investment bankers to close the deal

Hook the audience on your story

Spark a conversation

Set the stage for your investment bankers to close the deal

Principles Know your audience Develop a compelling story C hoose the right spokesperson U se all available/suitable tools to tell your story C reate opportunities for your story to ‘echo’

Know your audience

Develop a compelling story

C hoose the right spokesperson

U se all available/suitable tools to tell your story

C reate opportunities for your story to ‘echo’

Know your audience You will be talking to: Investment bankers F und managers Research analysts Financial media In life sciences many will have PhDs in scientific or medical disciplines Many will have had industry experience Often sit on advisory boards for portfolio companies Tailor each presentation to suit the audience’s level of knowledge Be prepared to supplement presentation information

You will be talking to:

Investment bankers

F und managers

Research analysts

Financial media

In life sciences many will have PhDs in scientific or medical disciplines

Many will have had industry experience

Often sit on advisory boards for portfolio companies

Tailor each presentation to suit the audience’s level of knowledge

Be prepared to supplement presentation information

Build a compelling story Start with the elevator pitch … if you are on an elevator with a potential investor how would you describe your opportunity in the time it takes the elevator to reach the ground floor? Use broad strokes, not exhaustive detail Trim your presentation to 25 minutes or less Typical hooks Unmet medical need – Genzyme’s portfolio Superior technology – drug-eluting stents First – Medtronic and the insulin pump ‘ Cool’ factor – Hemosol’s artificial blood

Start with the elevator pitch … if you are on an elevator with a potential investor how would you describe your opportunity in the time it takes the elevator to reach the ground floor?

Use broad strokes, not exhaustive detail

Trim your presentation to 25 minutes or less

Typical hooks

Unmet medical need – Genzyme’s portfolio

Superior technology – drug-eluting stents

First – Medtronic and the insulin pump

‘ Cool’ factor – Hemosol’s artificial blood

Executive personality

Create the right public face C hoose the right spokesperson/people Is the CEO, founder, president the right person to tell the story? What about the Chief Scientific Officer? Remember that senior executives should be present – part of the roadshow exercise is allowing investors to eyeball management Invest heavily in speaker preparation – some people have natural charisma, the rest have to learn to be compelling Think of building the ‘leader brand’ (see article on executive visibility on RosettaPR.com, ‘Perspectives ’ section)

C hoose the right spokesperson/people

Is the CEO, founder, president the right person to tell the story?

What about the Chief Scientific Officer?

Remember that senior executives should be present – part of the roadshow exercise is allowing investors to eyeball management

Invest heavily in speaker preparation – some people have natural charisma, the rest have to learn to be compelling

Think of building the ‘leader brand’ (see article on executive visibility on RosettaPR.com, ‘Perspectives ’ section)

Use a variety of tools We tend to gravitate to low tech presentations and text Consider animation and video – ‘show don’t tell’ Be creative – this is about selling! Make the presentation part of a web of story elements – links to website, additional content etc. Help your audiences dig as deep as they want to into your story

We tend to gravitate to low tech presentations and text

Consider animation and video – ‘show don’t tell’

Be creative – this is about selling!

Make the presentation part of a web of story elements – links to website, additional content etc.

Help your audiences dig as deep as they want to into your story

Make the story resonate C reate opportunities for your story to ‘echo’ Not powerful in themselves but reinforces main thrust Media coverage, interviews Investment and other conferences Website(s) Supplementary materials (e.g. white papers) Social networks

C reate opportunities for your story to ‘echo’

Not powerful in themselves but reinforces main thrust

Media coverage, interviews

Investment and other conferences

Website(s)

Supplementary materials (e.g. white papers)

Social networks

Typical presentation structure Snapshot – “ABC Company is …” Details – how it works Growth plan Market opportunity and size Financial projections Risks and uncertainties Comparables Valuation Use of proceeds Key people Management Board of directors Advisors Summary

Snapshot – “ABC Company is …”

Details – how it works

Growth plan

Market opportunity and size

Financial projections

Risks and uncertainties

Comparables

Valuation

Use of proceeds

Key people

Management

Board of directors

Advisors

Summary

Paul McIvor 416.516.7095 416.906.1276 C [email_address] 179 Fern Avenue Toronto, ON, Canada M6R 1K2 Contact