1 / 19

Views from Venture Capitalists Nancy Harrison & Jennifer Hamilton

Views from Venture Capitalists Nancy Harrison & Jennifer Hamilton. Canadian VCs Support Industry. Venture Capital Investments in Biotech. Where is the Bottom?!. The Bad News. Blair/Clinton comments September 11th Enron Elan Dov Pharma downturn Series of poor data, FDA rejections

zia
Download Presentation

Views from Venture Capitalists Nancy Harrison & Jennifer Hamilton

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Views from Venture CapitalistsNancy Harrison&Jennifer Hamilton

  2. Canadian VCs Support Industry Venture Capital Investments in Biotech

  3. Where is the Bottom?!

  4. The Bad News • Blair/Clinton comments • September 11th • Enron • Elan • Dov • Pharma downturn • Series of poor data, FDA rejections • ImClone

  5. Are There Public Market Safe Havens?7 Stocks Lose $62B in 6 Months Source: BioCentury June 24,2002

  6. What Constitutes a Tier I Company? March 2000: 41 of 81 companies have products Today: 33 of 36 companies have products Source: BioCentury June 17, 2002

  7. US Money Raised by Biotech Companiesin 2002 YTD Where are the institutional investors?! Source: BioCentury June 24, 2002

  8. Canadian Public Market Financings are Dead Money Raised in Public Canadian Biotechnology Companies Source: Yorkton Securities

  9. Private Deals Done in BC – not many - • Last half 2001 • Protiva - $14.5m • First half 2002 • Oncogenex - $3.6m • Other deals • follow-ons • Grants - Genome Canada

  10. BC Companies are Still Not on the Radar Screen of Foreign Investors

  11. The New Reality • Internal rounds (Series B-2) closing a year after Series B • Lack of lead investors • Debt financing • Lay-offs and downsizing/prioritizing • Mergers • VC’s supporting their own companies • VC’s having a hard time getting excited about the “old” model - Disillusioned • Numbers don’t work anymore

  12. Angiotech Model • Go public on TSE (stepping stone/capital) • Then go to NASDAQ (liquidity) • Luck element - public markets closed

  13. Big Corporate Partnership Model • Sign a big deal and get credit (Inex) • Doesn’t always work that way anymore (StressGen)

  14. Top Quartile VC IRR’s above 30 %

  15. What are VC’s doing to Get Returns? • Focussing on companies with on products, revenues and profits • Avoiding concept deals • Doing fewer deals – more money per deal • Watchful waiting • Investing in NRDO’s e.g. Salmedix

  16. What are VC’s doing to Get Returns? • Investing in Superhero CEO’s • Affinity raised $70m Series B – June 24 • Investing at lower valuations (40%) • Especially for Class of 2000 companies • Letting companies go under – not throwing good money after bad • Investing in relatively cheap publics versus private companies

  17. Creative Financing Alternatives • Cut Burn • e.g. Geron • Let go 1/3 of work force to refocus on later stage programs – June 2002 • “In the current financing climate companies that are well managed make tough calls…early.” Alex Barkas, Chairman • Slice and Dice Market • e.g. Angiotech - masters of this • Lean and Mean • Angiotech never more than 50 people

  18. Creative Financing Alternatives • Strategic M&A • e.g. ImmGenics • Don’t wait until out of money • Deals to cut burn, increase chances of success • e.g. Active Pass/Neogenesis • Buy versus Build • e.g. Active Pass • Spinouts • e.g. Inex/Protiva

  19. Summary • The world has changed – forget the past • Lots of money out there • For Right story - at Right Valuation • Time is the enemy: Financing and M&A take a long time – don’t get pushed up against the wall • Remember what drives investors – returns! – build into pitch • Be flexible on model and exit • Founders make money when shares are sold, not on company financings.

More Related