20110706 Private Equity Summit Allen Lin


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VC Investment in Biotech Industry

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20110706 Private Equity Summit Allen Lin

  1. 1. Exploring the Business Opportunities in Taiwan- Perspectives on Biotech Investment Allen Lin ( 林群倫 ) YFY Biotech Management Company/ Taiwan Global Biofund July 6, 2011 4F, 51, Sec 2, Chung Ching South Rd. Taipei, Taiwan, R.O.C. Email: [email_address]
  2. 2. Outline <ul><li>Who are We? </li></ul><ul><li>Capital Market in Taiwan’s Biotech Industry </li></ul><ul><li>The Trends in Biotech Investment </li></ul><ul><li>Cases in Biotech Industry </li></ul><ul><li>Future Perspectives </li></ul>
  3. 3. <ul><li>Who are we? </li></ul>
  4. 4. About Us <ul><li>Established in Nov 2003, YFY biotech Management Company is one of the leading biotechnology investment companies in Taiwan. </li></ul><ul><li>We focus on companies involved in biotechnology, pharmaceuticals, diagnostics, medical devices, medical services, medical informatics and related medical technologies with a potential to become an industrial leader. </li></ul><ul><li>We currently manage Taiwan Global Biofund (TGB), with a fund size of US$75 million and SME fund with US$45 million. </li></ul>
  5. 5. Portfolio Companies Company name : TaiMed Biologics http://www.taimedbiologics.com.tw/ Company name : NeuroSky Inc. Website : http://www.neurosky.com/ Company name : CMS Website : http://www.cmsholdings.com/ Company name : Medigen Biology Cor. http://www.medigen.com.tw/
  6. 6. Private Equity Finance in Biotech Seed Fund ( Angel ) Corporate Partner ( VC ) Mezzanine round ( IB, Securities ) IPO 、 M&A 、 Licensing ( VC, PE, IB, HF )
  7. 7. Price is What You Pay, Value is What You Get – Warren Buffet
  8. 8. <ul><li>Capital Market in </li></ul><ul><li>Taiwan’s Biotech Industry </li></ul>
  9. 9. Deal flow by Industry, US Source : PwC MoneyTree, Thomson Reuters (2009~2010)
  10. 10. US Biotech Financings ($M) Source : Burrill&Company 2010 report
  11. 11. Stock Market in Biotech (2010) <ul><li>Source : Nature Biotechnology v29, p.102, 2011 </li></ul>The biotech index were all up >15%, outperforming the Dow Jone and S&P 500
  12. 12. Global Biotech IPOs <ul><li>Nature Biotechnology </li></ul><ul><li>Volume: </li></ul><ul><ul><li>28 , </li></ul></ul><ul><li>Pages: </li></ul><ul><ul><li>793–799 </li></ul></ul><ul><li>Year published: </li></ul><ul><ul><li>(2010 </li></ul></ul><ul><li>Source : Nature Biotechnology v28, p.793~799, 2010 </li></ul>2010: 30 2011(April): 33 filed to IPO
  13. 13. Biggest M&A in 2009 & 2010 $68 billion Wyeth (WYE) Pfizer (PFE) $18 billion Genzyme (GENZ) Sanofi-Aventis (SNY) $28 billion Alcon (ACL) Novartis (NVS) $47 billion Genentech (DNA) Roche (RHHBY.PK) $48 billion Schering-Plough (SGP) Merck (MRK) Deal Number Merged side Merging side
  14. 14. Top 10 Licensing or Partnership in 2009 <ul><li>Source : Nature Biotechnology v28, p.793~799, 2010 </li></ul>
  15. 15. Biotech Market in Taiwan Unit: NT $100 M (Pharmaceuticals) (Emerging Biotecholgy) (Medical Devices) (Total) (Sectors) (Years) (Revenue) (Numbers of company) (Employee) (Export) (Import) (Import : Export) (Domestic Market)
  16. 16. Biotech Investment in Taiwan 資料來源:經濟部生物技術與醫藥工業發展推動小組, 2010 年生技白皮書。 Unit: NT $100 M Amount Pharmaceuticals Emerging Biotechology Medical Devices Total
  17. 17. Bio IPO Windows in TW <ul><li>2010 年興櫃轉上市公司 (2) : </li></ul><ul><li> 中化合成 (CCPG) 、華廣 (Bionime) </li></ul><ul><li>2010 年興櫃轉上櫃公司 (3) : </li></ul><ul><li> 曜亞國際 (DMT) 、泰博生技 (TaiDoc) 、美時化學製藥 (Lotus) </li></ul><ul><li>2011 年興櫃轉上櫃公司 (3) : </li></ul><ul><li> 德英生技 (G&E) 、盛弘醫藥 (ShareHope) 、 KY 馬光 (MA Kuang) </li></ul><ul><li>2011 年興櫃轉上市公司 (1) : </li></ul><ul><li> 台耀化學 (Formosa Lab.) </li></ul><ul><li>申請上櫃生技公司 (2) : </li></ul><ul><li> 合一生技 (Oneness) 、豪展醫療 (AviTA) </li></ul><ul><li>2010 及 2011 年登錄興櫃公司 (13) : </li></ul><ul><li> 科妍生技 (SciVision) 、台灣神隆 (ScinoPharm) 、國光生技 (Adimmune) 、中裕 </li></ul><ul><li>新藥 (Taimed Biologics) 、國鼎生技 (GoldenBiotech) 、立弘生化 (Allied Biotech) 、豪 </li></ul><ul><li>展醫療、 KY 繁葵 (Ever Growing) 、商之器 (EBM) 、雙美生技 (Sunmax Biotech) 、 </li></ul><ul><li>強生化學 (Jhonson Chemical Pharma) 、東生華製藥 (TSH Biotech) 、和康生技 (MBI) </li></ul>
  18. 18. <ul><li>The Trends in Biotech </li></ul><ul><li>Investment </li></ul>
  19. 19. Life Science Investment Thesis Source : Burrill&Co. 2008 Report Building sustainable businesses K Biopharmaceuticals Seeds Food ingredients Bio Fuels Biomaterials Bio Processing Tools Agriculture Addressing major market needs Therapeutics Traits Diagnostics Wellness Enhancers Medical devices Services Human Health Care “ Sustain & Nourish the world” FEED THE WORLD FUEL THE WORLD HEAL THE WORLD
  20. 20. Historical Trends in Biotech Fields Source: National Center for Biotechnology Information, PubMed Proteomics RNAi Gene therapy
  21. 21. New Trends in Biogenerics Lonza Teva Imclone Eli Lilly MedImmune AstraZeneca Sandoz Novartis GlyFi+ IsMed+ Merck Bioventures Merck Strategy alliances or subsidiaries Company
  22. 22. Chinese Traditional Medicine in Taiwan Western Principle Or new system in Asia?
  23. 23. Success Rates and Time to Market across Therapeutic Areas Source: PharmaPredict.
  24. 24. Biotech Product Life Cycle
  25. 25. Source: LES royalty report on the pharmaceutical industry Licensing Strategy in Biotech
  26. 26. Biocluster in Taiwan Taiwan tops the World in the “State Of Cluster Development” For 3 consecutive years (WEF, 2006~2009) NanKang Biotech Park HsinChu Science Park HsinChu Biomedical Science Park Central Taiwan Science Park Southern Taiwan Science Park PingDong Agriculture Science Park Deep Ocean Biotech Park YiLan Biomedical Park
  27. 27. Value Creation in Biotech Industry Value-generation by incubation Patents Commercialization Networking Input Process Output Scientist advisor Market position SIC program, RPC plan, STB program Facilities Experts Regulatory Adm. Licensing Strategy Sources <ul><li>R&D Institutes </li></ul><ul><li>University </li></ul><ul><li>(OTL) </li></ul><ul><li>Industry </li></ul>Clinical Trial Completion Decrease operation risk Diffusion of Management Know-how Milestone set-up Management
  28. 28. Summary <ul><li>Licensing ( License-in, License-out, M&A, Collaboration ) </li></ul><ul><li>Patents (Freedom to operate) </li></ul><ul><li>Contract (design of upfront, milestone payment, royalties) </li></ul><ul><li>Market right (co-development, marketing, sales, regional rights) </li></ul><ul><li>Product Life Cycle ( PDM, PLM ) </li></ul><ul><li>Strategy alliance </li></ul><ul><li>FDA policy and government law </li></ul><ul><li>Regulatory administration 、 Insurance and reimbursement </li></ul><ul><li>Risk analysis (Global economics 、 Business cycle 、 Sensitive analysis ) </li></ul>
  29. 29. <ul><li>Cases in Biotech Industry </li></ul>
  30. 30. The Power of Social Networking in Medicine Source: PatientsLikeMe profile from Nature Biotech, Oct., 2009.
  31. 31. Hospital Mobile Phone Operators Cooperation Manufacturers of medical Device Promotion Business Model Wireless Body Network BD Phillips MicroLife Module sales Networking NTU hospital, Stanford Hospital &Clinics Strategy alliance & Clinical trial Chunghwa Telecom China Mobile
  32. 32. NeuroSky + Square Enix Uncle Milton Mattel
  33. 33. Cancer Progression Cancer Metastasis is responsible for the majority of mortality (>90% for Breast Cancer)
  34. 34. Circulating Tumor Cell <ul><li>Application: </li></ul><ul><ul><li>Survival prognosis </li></ul></ul><ul><ul><li>Monitors metastasis </li></ul></ul><ul><ul><li>Detects recurrence </li></ul></ul><ul><ul><li>Detects targets without biopsy. </li></ul></ul><ul><li>Benefits: </li></ul><ul><li>Noninvasive, more accurate disease assessment. </li></ul><ul><li>Rational selection and early feedback of chemotherapy. </li></ul><ul><li>Works for the major cancers. </li></ul><ul><li>146 clinical trials involving CTC. </li></ul><ul><li>Only 1 company received FDA approval. </li></ul>07/07/11 YFY Group Primary Tumo r Circulating Tumor Cells (CTCs) Blood Vessel
  35. 35. Blood vessel Primary tumor Circulating Tumor Cells in Blood Neutrophil: 50-70% Eosinophil: ~ 5% Basophil: ~ 1% Lymphocyte: 25-35% Monocypte: ~ 5% Red Blood Cells: ~ 1% In 1 mL of Blood: ~ 5 Million White Blood Cells ~ 5 Billion RBCs Veridex Test (7.5 mL):
  36. 36. PUMA: A New Substrate for Disposable Biochip
  37. 37. Size Based Cell Separation 7  m 2  m 7  m
  38. 38. MiCareo Solution RheoCatch™ Rarefind™ With eDAR <ul><li>3-Color Verification of CTCs (EpCAM+/CK+/CD45-). </li></ul><ul><li>Ultrafast Screening and Single-Molecule Sensitivity. </li></ul><ul><li>Detects 100x more CTCs than FDA-approved method. </li></ul>RareBind™ Reagent Kit RareCatch™ Chip
  39. 39. The Regional Perspectives of Taiwan’s Biotech <ul><li>The characteristics of the Bio-related industry in </li></ul><ul><li>Asia regions : </li></ul><ul><li>Singapore : Tax-free, Infrastructures, Talents </li></ul><ul><li>Korea : Group development, government </li></ul><ul><li>support </li></ul><ul><li>China : Big market, low labor cost </li></ul><ul><li>Japan : Basic research, closed market </li></ul><ul><li>Taiwan : OEM&ODM, basic research in </li></ul><ul><li>biotech </li></ul>
  40. 40. Future Perspectives <ul><li>Close collaboration with big pharma. </li></ul><ul><li>a. joint venture b. strategic alliances </li></ul><ul><li>Hire more scientific entrepreneurs. </li></ul><ul><li>Define Taiwan’s advantages in Biotech Industry </li></ul><ul><li> medical device or pharmaceuticals ? </li></ul><ul><li>Highly focus on our strengths constrained with the limited capital and market scale. </li></ul><ul><li>To establish a health investment environment, and </li></ul><ul><li>attract the private investors around the world. </li></ul>
  41. 41. Thank you for your attention!