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Jerry Balter's Presentation

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The development of a seed investment fund in New Zealand

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Jerry Balter's Presentation

  1. 1. The Development of a Seed Investment Fund in New Zealand Jerry Balter Ulysses Advisory Group 1
  2. 2. Ulysses Advisory Group • The Ulysses Group (predecessor to Ulysses Advisory Group )(“UAG”)) In 1999 we founded and ran the New Zealand Seed Fund • $13.5 Million fund • Formed 4 companies: 1. Neuren – neuro drugs and devices mainly developed from growth factors – IGF and HGH 2. Pacific Edge Biotechnology – diagnostics and drugs focused on cancer genetics 3. EndocrinZ – drugs for metabolic disease, merged with Neuren 4. Esphion – Anti- virus software. Sold to Israeli software company • Neuren and Pacific Edge Biotechnology remain the 2 largest publicly traded biomedical companies developed from NZ science and technology 2
  3. 3. The Development of a Seed Fund • Ulysses began working with the MRC Collaborative Center in 1992 • The MRC (Medical Research Council) is the equivalent of the US NIH. • In 1994 Ulysses formed Obesys, based on MRC technology • From 1995 to 1997, Ulysses advised the MRC on the development of a venture capital fund whose primary objective was to invest in technologies developed from MRC science • Medical Ventures Management was formed in 1997 with approximately $70 million of available capital • MVM has raised several additional funds since that time and decreased its dependence on MRC science 3
  4. 4. The Development of a Seed Fund • In 1994, Ulysses formed Physiome Sciences • Physiome was the combination of cardio-physiology development at Oxford University, Johns Hopkins University and the University of Auckland • Company was focused on software to develop better electrophysiology drugs and devices • Raised $3 million in 1996 and a total for $120 Million from 1998-2001 • JB of Ulysses was initial CEO • Merged with a biotech company, Predix, in 2003 4
  5. 5. The Development of a Seed Fund in NZ • In 1998, NZ had a small venture capital community focused on retailing and software, only one real success • At that time NZ had virtually no life sciences business outside of Ag bio – generally focused on fattening lambs and milk production • University of Auckland had specific expertise in cardiac mapping(Physiome) and growth factors through j-v’s with large companies in the US and Europe( Genentech, Chiron and Pharmacia) • Otago University had broad experience in gene markers focused on cancers. 5
  6. 6. The Development of a Seed Fund in NZ • Ulysses began working with the University of Auckland in 1998 to expand its opportunities with researchers working on conditions to treat stroke and brain trauma • In 1999, U of A and several high net worth individuals asked Ulysses to develop a “US-type” seed investment fund to capitalize on developing technologies in NZ • Ulysses expanded its efforts to include the other research centers in NZ • Early in 2000 the NZ Seed Fund was launched with capital of $13.5 million invested by NZ individuals and several institutional investors 6
  7. 7. The Success of a Seed Fund • Ulysses as the manager of the Seed Fund financed 4 new companies • We recruited experienced managers for all, generally experienced in the life sciences in other places around the world who had some connection to NZ • Ulysses transferred a great deal of industry specific knowledge to NZ, including the expansion of licensing capabilities; the basic roadmap on how to build a science-backed company that could compete for capital and other opportunities with the venture backed companies developed in the US, UK, Australia and Israel. • Often these companies in-licensed or formed J-V’s with complimentary technologies from research institutes outside of NZ to broaden the platform • Generally brought in other sources of capital to provide greater financial flexibility for the companies • Ulysses principals remained active in the management of the companies 7
  8. 8. The Success of a Seed Fund Neuren: • Capitalized with $7.5 million from Seed Fund, and other investors from the US, Australia and NZ • Recruited CEO from large US pharmaceutical company • IPO in 2005 on ASX • Currently 2nd largest NZ non-Ag life sciences company by market cap • Traded on the Australian Stock Exchange 8
  9. 9. The Success of a Seed Fund Esphion • Capitalized with $2.5 million from the Seed Fund • Software to prevent denial of services attacks • Recruited CEO and board of directors with experience in the space • Sold in 2003 to an Israeli software company 9
  10. 10. The Success of a Seed Fund Pacific Edge Biotechnology • Capitalized with $5 million in 2001 from the Seed Fund and NZ individuals • DF served as CEO for first 3 years of Company and then we recruited an experienced manager who wanted to move back to NZ • Went public in 2004 on the NZ stock exchange • Largest life sciences public company in NZ • Selling products in Japan, Us and Europe 10
  11. 11. The Success of a Seed Fund Endocrinz • Capitalized with $7 million in 2002 • Joint development between Seed Fund, Pfizer and NZ institutional investors • JB initial CEO • Merged with Neuren in 2004 11
  12. 12. Conclusions • The most advanced VC markets for life sciences and software remain the US, Israel and Switzerland • Many researchers with novel products have emigrated to these markets to take advantage of capital and the environment encouraging start-ups • UK and Germany have had concerted efforts over the last 2 decades and have begun to rival the top 3 markets • Ulysses transferred a lot of skill and knowledge to the NZ market. 12
  13. 13. Conclusions The development of a vibrant venture capital/start-up environment is dependent on: • Innovation & IP Protection • Management & Know-How • International Regulatory Compliance • Money, Money and More Money 13
  14. 14. What about Turkey? • Has a tremendous amount of engineering related innovation • Should be the gateway of innovation into the Middle East, Eastern Europe, North Africa and Central Asia • Only a modest amount of capital focused on tech innovation • With more capital and more development should be able to recruit Turks with managerial experience elsewhere to return home and to develop a vibrant medical technology business sector 14

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