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Scale up event

Scale up event. November 21, 2017. Johan Cardoen. 15/05/2017. Secondary. Offerings. VCs, Acquisitions/Mergers &. Strategic Alliances. Angels, FFF. Later Stage. Seed Capital. Early Stage. Public. Market. CASH-IN. Operating Cash Flow. Mezzanine. IPO. 3rd. 2nd. Public Company.

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Scale up event

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  1. Scale up event November 21, 2017 Johan Cardoen 15/05/2017

  2. Secondary Offerings VCs, Acquisitions/Mergers & Strategic Alliances Angels, FFF Later Stage Seed Capital Early Stage Public Market CASH-IN Operating Cash Flow Mezzanine IPO 3rd 2nd Public Company 1st TIME Financing life cycle of a biotech company • Found NewCo • Validate concept • Complete business plan TT funds Sales POC in place Product support Additional clinical data Concept Product introduction Product development Prototype/ Research

  3. Value creation process in therapeuticsLong term, high risk* and capital intensive Value inflection point *overall POS: 8%

  4. Biotech start-ups: business models • Platform companies • Asset-centric companies • Drug Discovery platform: LLC model • Combination of assets

  5. Biotech platform companies • Discovery/Technology platform is the differentiator and back bone • Risk spreading: many shots on goal, suitable for deal making • Long timelines towards main value inflection point • First platform development and validation • Develop proprietary pipeline • High capital needs • Therapeutics, diagnostics and agbio

  6. Asset-centric • Asset is the differentiator and key value driver • Single shot on goal • Binary: high risk, high gain • Less capital intensive – but still long timelines • “Build to Buy model”

  7. Company age at time of acquisition per sub-sector Source: Kempen 2017

  8. Biotech in Europe: current financing climate • Start-up financing: overall positive • Many VC funds raised successfully new funds over the past 3-4 years • Many VC funds (also US based) scout actively for dealflow in EU • Despite more IPO activity in the US (at higher valuations) – there are several biotech-friendly stock markets in EU (Euronext, LSE, Swiss Exchange, CSE...)

  9. Scale-ups in Biotech: challenges • Significant capital required to finance a biotech (therapeutics) company towards a ‘cashflow-positive’ position • Biotech investors are mainly VC funds-most closed-end funds (typically 10 yrs) • High financing needs push sometimes companies pre-maturely towards exit mainly through a trade sale • Biotech-friendly stock market is key for biotech companies to fuel path towards sustainability • EU lack growth equity funds compared to the US • More and more EU biotech have dual listing

  10. Scale-ups in Biotech: opportunities • Availability of growth equity in EU could contribute to move many EU biotech companies towards a sustainable biopharma company (e,g, in US Amgen, Celgene, Gilead, Vertex, Biogen etc...) • Increasing liquity on EU stock markets for listed biotech companies prevent the risk of shifting the strategic decision center to the US

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