Alternative Funding for Life Science Companies- Webinar Slides

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Reviews alternative funding for life science companies beyond venture capital. Covers angel networks, government grants, fundraising in the middle east, and more. Lists several resources for fundraising as well as actionable steps to take.

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Alternative Funding for Life Science Companies- Webinar Slides

  1. 1. Don  Stewart,  PhD   President  &  CEO   PlantForm  Corpora4on   Toronto,  Canada   don.stewart@plan4ormcorp.com   Looking  beyond  VCs:  Alterna5ve   funding  routes  for  early-­‐stage  life   science  companies  
  2. 2. About SecureDocs   AppFolio SecureDocs is a virtual data room for sharing and storing sensitive documents both internally and with outside parties. AppFolio, Inc. Company Basics: •  Founded by the team that created and launched GoToMyPC and GoToMeeting •  Backed by leading technology companies and investors •  Web-based business software for financial and legal professionals
  3. 3. PlantForm  Summary   •  Canadian  private  corpora=on  established   2008   •  Plant  expression  technology  licensed   from  the  University  of  Guelph   •  $3.5  million  in  funding  from  Founders  &   Angels   •  $2.0  million  in  funding  from  Government   •  $2.1  million  contract  revenue  in  2013   •  4  families  of  patents  filed     Innovator  of  the  Year   Guelph,  Canada,  2010   Mind  To  Market  Finalist   Ontario,  Canada,  2011   Winner  Most  Promising  Technology     2012  Venture  Forum  (New  York)   Dr.  Chris  Hall.  Co-­‐founder  &  CSO    
  4. 4. PlantForm  Pipeline   Pipeline  Drugs   Biosimilar   Hercep5n®   Biosimilar   Avas5n®   Biosimilar   Erbitux®   HIV  an5bodies   Butyryl   cholinesterase   Poten5al  Market  Size   $  7bn   $  6bn   $  4bn   Market  Entry   2016   2017-­‐019   Ongoing   revenue   stream  U.S.  Defense  Advanced   Research  Projects  Agency  
  5. 5. More  that  20  years  experience  in  drug  development  and   approval.  Worked  with  Cangene,  which  grew  from  a  10-­‐‑ person  start-­‐‑up  to  an  800-­‐‑employee,  $250  million   biotechnology  company.    Experience  in  all  aspects  of   drug  development  and  regulatory  approval  of  parenteral   drugs. Don  Stewart  PhD President  &  CEO Co-­‐‑founder Director  R&D President  and   owner Consulting   company   founded   in   2007;     supporting   Biotech   and   Pharma   in   translation   of   parenteral   manufacturing   processes   from   the   laboratory   bench   to   GMP   manufacturing   facilities.     Opening   sales   opportunities  in  Canada  for  international  companies Presenter  
  6. 6. Polling  Ques=on  #1  
  7. 7. Finding  Angels   §  GUST  database    (h^p://gust.com)   §  Example  —  Los  Angeles:   •  Angel  Groups   –  AngelVision  Investors   –  PCN  Los  Angeles   –  Icon  Angels   •  Venture  Funds   –  Kline  Hawkes  &  Co   –  Rivenrock  Capital   –  Macquarie  Allegiance  Capital   –  Barre^   •  Business  Plan  Compe==on   –  UCLA  Knapp  Venture  Compe==on   •  Your  network  of  other  start-­‐ups   •  Conferences   •  Trade  commissions   •  State  agencies  
  8. 8. Angel  Networking  Conferences   –  SoCalBio  Investor  &  Partnership  Conference   •  6  November,  2013  @  Omni  Hotel,  LA   •  h^p://www.socalbio.org/   –  Keiretsu  Forum  San  Diego   •  h^p://www.keiretsuforum.com/global-­‐chapters/san-­‐diego/   –  Beer  &    Partners   •  Investment  Fair,  London,  UK  (Spring  and  Fall)   •  h^p://www.beerandpartners.com/   –  Biotrinity,  UK   •  May  2014,  London,  UK   •  www.obn.org.uk   –  Bright  Buffalo  Niagara  Venture  Forum     •  h^ps://gust.com/r/sessions/via_group/25737  
  9. 9. Angels:    GUST  home  page  
  10. 10. GUST  Experience     –  Searchable  internet  portal  to  access  angels:   h^p://gust.com/   –  Need  to  load  detailed  informa=on   –  Video  helps   –  Business  plan  helps   –  Detailed  financials  help   –  Requires  effort  to  be  useful   –  Entrepreneur  needs  to  drive  the  process   –  Not  everyone  responds   –  Use  by  spam  organiza=ons  to  mine  for  start-­‐ups  
  11. 11. GUST  PlantForm  home  page  
  12. 12. Angel  Funding  Process   •  Many  groups  have  their  own  applica=on   format  in  addi=on  to  GUST   – Time  consuming   •  Angel  groups  like  to  provide  mentoring  for   pitch   – Time  consuming  and  not  always  helpful   •  Angel  groups  due  diligence  can  involve   considerable  educa=on  on  your  area   – Time  consuming  
  13. 13. Angels:  Third-­‐Party  Finders   Professional  finders   •  Upfront  fees  +  expenses   •  Fees  to  present  at  conferences   •  Success  fee  (Cash  and  Warrants/Op=ons)   •  East  Coast  Group   –  $17,000  fees   –  2  Conferences,  Stamford  and  New  York,  USA   •  No  personal  commitment   •  For  PlantForm:  No  investment   Ad  hoc  finders  (investors)   •  No  upfront  fee,  pay  expenses   •  Success  fee  (5-­‐7%    Cash,  5-­‐7%  Op=ons)     •  Well-­‐connected  individuals  do  groundwork,  organize  groups  in  a  home  or   restaurant   •  Prospec=ve  investors  want  to  meet  CEO   •  For  PlantForm:  4  events  =  $500,000  investment  
  14. 14. Polling  Ques=on  #2  
  15. 15. §  Objec=ve:  obtain  non-­‐dilu=ve  funding   -­‐  Pharmaceu=cal,  Agricultural  and  Biotechnology  Companies   -­‐  Government  contracts  and  grants   -­‐  Founda=ons   §  Core  project  support   -­‐  Directly  advances  companies  objec=ves   §  Non-­‐core  project  support   -­‐  Reduces  burn  rate   -­‐  Increases  “cri=cal  mass”  in  organiza=on   -­‐  Can  advance  IP  por4olio   §  Must  have  demonstrate  capability   -­‐  Lab  opera=ons   -­‐  Equipment   -­‐  Personnel   Market-­‐driven  Development  Contracts  
  16. 16. §  United  States   •  DARPA,  $1.8  million  R&D  Contract   •  www.so.gov   •  h^p://www.darpa.mil/Opportuni=es/Solicita=ons/ DARPA_Solicita=ons.aspx   •  h^ps://www.dtrasubmission.net/SignIn.asp   •  h^p://www.grants.gov/   •  Gates  Founda=on,  $750,000  Development  Contract     •  h^p://www.iavi.org/   •  h^p://www.gatesfounda=on.org/   §  Canada   •  Undisclosed  >$1  million  contract   •  h^p://www.merx.com   PlantForm  Development  Contracts  
  17. 17. §  Government  and  Founda=on  proposal  process:   -­‐  Funding  cycle  or  open  =meframes   -­‐  Specific  topics  or  white  paper  proposals   -­‐  General  stages  of  applica=on  process:   •  LOI  >  Summary  >  Full  Proposal   §  Pharma,  Ag  and  Biotech  proposal  process   -­‐  Website  applica=on,  ini=al  review  of  interest   •  Syngenta  (www.syngentathoughtseeders.com)   -­‐  Network  Contacts   -­‐  Industry  associa=ons  support   •  MaRS,  Toronto  (www.marsdd.com)   Securing  Development  Contracts  
  18. 18. Conferences:   §  Examples   -­‐  BIO,  San  Diego  2014  (conven=on.bio.org)   •  One-­‐On-­‐One  Partnering  a  must   -­‐  Bio-­‐Europe,  Vienna,  Nov  2013  (www.ebdgroup.com/bioeurope)   -­‐  Bio-­‐Europe  Spring,  March  2014,  Turin  (www.ebdgroup.com/bes)   -­‐  BioPharm  America,  Sept  2013,  Boston  (www.ebdgroup.com/bpa)   -­‐  Sachs  and  Associates  Forums  (www.sachsforum.com)   -­‐  Conference  strategy  (advance  research/game  plan)   §  Approach   -­‐  Extensive  use  of  partnering  systems   -­‐  Set  up  other  mee=ngs  prior  to  conference   -­‐  Take  advantage  of  networking  events   Securing  Development  Contracts  
  19. 19. §  Networking  with  Contacts   §  Trade  Commissions   §  Industry  Associa=ons   §  SBIR/STTR  (www.sbir.gov)   -­‐  SBIR:    support  Small  Businesses  to  engage  in  Federal  R&D  with   commercial  poten=al   -­‐  STTR:    support  coopera=ve  R&D  between  Small  Business  and   Research  Ins=tu=ons  for  project  with  commercial  poten=al   -­‐  Phase  I,  the  startup  phase,  makes  awards  of  "up  to  $150,000  for   approximately  6  months  support  for  explora=on  of  the  technical   merit  or  feasibility  of  an  idea  or  technology."   -­‐  Phase  II  awards  grants  of  "up  to  $1  million,  for  as  many  as  2  years  in   order  to  facilitate  expansion  of  Phase  I  results.”     Securing  Development  Contracts  
  20. 20. Securing  Development  Contracts   Government  support   •  Canada   –  h^p://www.tradecommissioner.gc.ca   –  (Not  the  same  as  US  FTC)   •  Cheryl  Rogers,  San  Diego;  Chris=ne  Sarkisian,  Boston   •  Benjamin  Eliasoph,  Technology  Partnering  Officer,  DC   –  Connected  PlantForm  to  partners  in  Italy,  USA,  Australia     •  USA   –  Organiza=ons  such  as  Interna=onal  Trade  Center  (www.intracen.org)   –  Missions   •  States   –  Establish  a  presence  in  other  countries   •  North  Carolina  Biotechnology  Center  (www.ncbiotech.org)   –  Missions  
  21. 21. Development  Contract  Issues   §  Cau=on   §  You  are  sharing  data  and  ideas  with  your  compe==on   §  Mi=ga=on   §  Must  have  a  Non-­‐Disclosure  Agreements   §  Must  track  and  record  all  informa=on  provided   §  Use  secure  data  rooms  on  internet   §  Control  who  views   §  Record  of  what  was  viewed   §  Use  to  gauge  interest  level  
  22. 22. Development  Contract  Issues   §  Pros   –  Provide  non-­‐dilu=ve  funding   –  Advance  companies  products  or  core  technology   §  Cons   –  Not  necessarily  aligned  with  primary  corporate  direc=on     –  Requires  significant  use  of  resources   –  May  require  addi=onal  non-­‐core  hires  (project  or  customer   rela=onship  management)  
  23. 23. Partnerships  to  advance  business  development/financing:   §  Objec=ve:  Secure  $7  million  project  cost  to  next  significant   financing  milestone   §  Summary  diagram   Crea=ve  Financing  Partnerships   Cash  investment   Contract  manufacturing     Preclinical  services   Clinical  Services   Government  Grants   Government  Loans  
  24. 24. $7  million  project  cost   §  Equity   –  $2,000,000  from  Angels  and/or  Service  Providers   §  Upstream  Greenhouse  services   –  50%  of  cost  (not  disclosed)   –  Business  synergy   §  Downstream  Purifica=on  services   –  50%  of  cost  (not  disclosed)     –  Business  synergy   §  Preclinical   –  100%  as  equity,  Technomark  Lifesciences   –  www.technomarkls.com   §  Phase  I  clinical   –  20%  as  equity,  Cato  Bioventures   –  www.catobioventures.com   Crea=ve  Financing  Partnerships  
  25. 25. Blended  Funding  Model   Project   Poten5al  External  Funding   Ac5vity   Cost   Source   %age   Amount   Manufacturing  Process  Scale-­‐up   $696,051   Service  providers   50%   $348,025   Manufacturing  3x  GLP  Processes   $1,392,102   Service  providers   50%   $696,051   Manufacturing  1x  GMP  Process   $696,051   Service  providers   50%   $348,025   GLP  Mouse  Efficacy  Study   $139,210   GLP  Pk  Study   $69,605   Technomark,  Equity   100%   $69,605   Safety  and  Toxicity  Rodent  Study   $278,420   Technomark,  Equity   100%   $278,420   Safety  and  Toxicity  Monkey  Study   $1,113,682   Technomark,  Equity   100%   $1,113,682   Safety  and  Toxicity  Other  Studies   $139,210   Technomark,  Equity   100%   $139,210   Characteriza=on  Studies   $500,000   Ontario  program,  Loan   100%   $500,000   Stability  Study   $250,000   Ontario  program,  Loan   100%   $250,000   IND  Submission   $100,000   Ontario  program,  Loan   100%   $100,000   (Grant)   $0   Ontario  Program,  Loan   100%   $650,000   Phase  I  Clinical  Trial   $1,392,102   Cato  Bioventures,  Equity  20%   $278,420   TOTAL  PROJECT  COST   $6,766,433   SUB-­‐TOTAL  EXTERNAL   $4,771,440   EQUITY  RAISE   $2,000,000  
  26. 26. Summary  of  issues   •  Pros   –  Access  to  investment  in  a  =ght  money  market   –  No  change  in  control  of  the  Company   •  Cons   –  Hard  to  find  opportuni=es   –  Large  amount  of  due  diligence   –  Difficult  to  bring  different  par=es  together  at  the  same  =me   Crea=ve  Financing  Partnerships  
  27. 27. Polling  Ques=on  #3  
  28. 28. Financing  from  the  Middle  East  
  29. 29. Financing  from  the  Middle  East  
  30. 30. Financing  from  the  Middle  East   §  Sources   -­‐  Sovereign  Funds   •  >$500  million   -­‐  Investment  Funds   •  >$100  million   -­‐  Private  Funds   •  >$10  million   -­‐  Zakat  Funds   •  >$10  million   -­‐  Strategic  Investors   •  $10-­‐30  million   -­‐  Private  Banking   •  $4-­‐6  million  and  $1  million   §  Total  ask  and  tranches  larger  than  in  USA   -­‐  ENBD  minimum  $30  mm  for  Series  A  
  31. 31. Financing  from  the  Middle  East   Issues   §  Funds  for  financing  are  available   -­‐  Abu  Dhabi  GDP    $248  billion  in  2012,  largely  from  oil   -­‐  Qatar  GDP  $189  billion  in  2012,  largely  from  natural  gas   •  Abu  Dhabi  Investment  Authority,  ADIA  (www.adia.ae)   •  Abu  Dhabi  Investment  Council,  ADIC(www.adcouncil.ae)   •  Qatar  Investment  Authority,  QIA  (www.qia.qa)   •  Ras  Al  Khaimah  Investment  Authority,  RAKIA  (www.rak-­‐ia.com)   §  Sophis=cated  investors  with  general  knowledge  base   §  Commitment  to  partnerships   §  Interest  in  investments  that  commit  to  local  ac=vi=es   -­‐  Job  crea=on   -­‐  Facility  builds   §  Tawazun  Holding,  an  offsets  program  which  can  be  used  to  assist   with  financing  (www.tawazun.ae)  
  32. 32. Financing  from  the  Middle  East   Issues   §  Synergy  with  Government  objec=ves  in  diversifica=on   -­‐  United  Arab  Emirates  Vision  2021   •   (www.vision2021.ae)   •  “UAE  drives  toward  economic  diversifica=on  less  reliant  on  oil.   Expanding  new  strategic  sectors  to  build  long-­‐term  compe==ve   advantages.”   -­‐  Abu  Dhabi  Economic  Vision  2030   •  (gsec.abudhabi.ae/Sites/GSEC/Naviga=on/EN/publica=ons,did=131400)   •  “Comprehensive  plan  for  the  diversifica=on  of  the  Emirate’s   economy  and  a  significant  increase  in  the  non-­‐oil  sector’s   contribu=on  to  GDP  by  the  year  2030.  
  33. 33. Financing  from  the  Middle  East   §  Man  on  the  ground   -­‐  Important  to  have  a  knowledgable  and  locally  experienced  contact   -­‐  PlantForms  contact  is  a  Canadian  who  operates  a  management   consul=ng  business  in  Dubai     §  C-­‐level  presence  on  the  ground   -­‐  CEO  must  be  on  the  ground,  supported  by  CFO  and  other  C-­‐level  staff   -­‐  PlantForm  aims  to  be  in  the  region  every  month   -­‐  This  takes  =me  and  resources  away  from  other  ac=vi=es   §  Embassy/Trade  commission  support   -­‐  Useful  for  general  connec=ons  and  trade  missions   -­‐  Embassy  of  Canada  to  United  Arab  Emirates   •  h^p://www.canadainterna=onal.gc.ca/uae-­‐eau   -­‐  Embassy  of  the  United  States  to  United  Arab  Emirates   •  abudhabi.usembassy.gov  
  34. 34. Polling  Ques=on  #4  
  35. 35. PlantForm  Timeline  in  the  Middle  East   Year   Month   Ac5vity   2011   October   Healthcare  conference  in  Abu  Dhabi   November   3  mee=ngs  with  investment  group   2012   January   Term  Sheet  presented  by  Investor  ($10  mm)   February  –  March   Due  Diligence  and  discussion   April   Investor  withdraws  (lost  $170  mm  on  another  deal  in  USA)   May   Investor  introduces  Company  to  Emirates  NBD  Bank,  Dubai   June  –  October   3  Dubai  visits  with  ENBD,  developing  understanding  at  bank,   securing  posi=ve  opinion  from  risk  group   November   Mee=ngs  with  10  poten=al  investor  groups,  Abu  Dhabi,  Dubai,   Qatar  to  test  waters   December   Execute  Mandate  agreement  with  ENBD   Con=nued….  
  36. 36. PlantForm  Timeline  in  the  Middle  East   Year   Month   Ac5vity   2013   January   Mee=ngs  in  Dubai   Selec=on  of  lawyers,  Dubai   Due  diligence  by  ENBD  and  Lawyers   February   Mee=ngs  in  Dubai   Company  posi=on  papers  wri^en   Market  evalua=on  by  consultant   March   Mee=ngs  in  Dubai   Consultant  review  of  drug  product   Consultant  reviews  (2)  of  animal  studies   Presenta=on  materials  dra~ed   April   Mee=ngs  in  Dubai   Final  Offering  Memorandum  and  Term  Sheet   Final  Presenta=ons  (15  and  80  slide  versions)   Con=nued….  
  37. 37. PlantForm  Timeline  in  the  Middle  East   Year   Month   Ac5vity   2013   May   Introduc=on  of  project  to  marke=ng  to  ENDB   Investment  Banking   Investment  Banking  ini=ate  marke=ng   June   Mee=ngs  in  Dubai   Introduc=on  of  project  to  marke=ng  to  ENBD   Private  Banking  Rela=onship  Managers   Private  Banking  ini=ate  marke=ng   Mee=ngs  with  Investors  in  Abu  Dhabi,  Dubai,   Ras  Al  Khaimah  &  London  UK   July   Ongoing  marke=ng  
  38. 38. Financing  from  the  Middle  East   Summary  of  issues   •  Posi=ves   –  Financing  available   –  Tranches  much  larger  than  in  US   –  English  language  in  the  business  and  social  environments   –  UK  law  for  business   •  Issues  to  address   –  Time  required  on  the  ground  to  generate  and  advance   leads   –  Need  to  understand  local  business  culture   –  Need  to  be  flexible  and  use  locally  accepted  business   prac=ces  
  39. 39. Which  Road  to  Travel   Where  would  PlantForm  focus  for  early  financing   knowing  what  we  now  know…..   1.  Founda=ons  and  Family  Offices  ($500-­‐$2,000,000)   1.  Project  financing   2.  Milestone  driven   3.  Do  not  want  control   2.  Individual  Angels  ($25-­‐100,000)   1.  Day  to  day  funding   2.  Steady  influx  of  capital   3.  Can  make  a  special  drive  for  an  intermediate  milestone   3.  Middle  East  ($10  million  plus)   1.  Significant  capital  depth   2.  Increasing  interest  in  diversifying  investment  por4olios   3.  Board  presence/shareholder  control  but  opera=onal  control  remains  with   Company    
  40. 40. Discussion   Don  Stewart,  PhD   President  &  CEO   PlantForm  Corpora4on   Toronto,  Canada   don.stewart@plan4ormcorp.com  

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