HIGGINS COMMERCIALIZING SCIENCE - SOI.ppt

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Information about HIGGINS COMMERCIALIZING SCIENCE - SOI.ppt

Published on August 17, 2007

Author: mgaiss

Source: slideshare.net

F E B R U A R Y 2 0 0 7 Commercializing Science: A Venture Capital Perspective R O B E R T F. H I G G I N S H A R V A R D B U S I N E S S S C H O O L S C I E N C E – B A S E D B U S I N E S S S E M I N A R

Overview Background VC Investing Environment Tech Transfer Environment Commercializing Scientific Research: The VC View Case Studies Summary

Background

VC Investing Environment

Tech Transfer Environment

Commercializing Scientific Research: The VC View

Case Studies

Summary

Background

My Background Harvard: AB History, MBA Government: International Economic Affairs Healthcare Private Foundations, CEO Charles River Ventures Founded Highland Capital Partners, ‘88 – Present HBS Faculty, ‘00 – Present

Harvard: AB History, MBA

Government: International Economic Affairs

Healthcare Private Foundations, CEO

Charles River Ventures

Founded Highland Capital Partners, ‘88 – Present

HBS Faculty, ‘00 – Present

Formed in 1988 $2.7 billion under management Diversified portfolio strategy Life Sciences, IT, and Communications Seed, Early, and Late Stage 30 investment professionals Boston, Menlo Park, DC, Geneva, and Shanghai Highland Capital Partners

Formed in 1988

$2.7 billion under management

Diversified portfolio strategy

Life Sciences, IT, and Communications

Seed, Early, and Late Stage

30 investment professionals

Boston, Menlo Park, DC, Geneva, and Shanghai

Representative Highland Successes

Highland Healthcare / Life Sciences Team Bob Higgins, Managing General Partner Corey Mulloy, General Partner – Robertson Stephens, Whitman Group, MBA HBS Wyc Grousbeck, Venture Partner – Glycomed, Celtics CEO, JD Mich, MBA Stanford Bijan Salehizadeh, Partner – Medtronic, HealthCentral, MD Columbia, MBA HBS Dean Banks, Vice President – Cytyc, J&J, MBA HBS Jay DeCoons, Senior Associate – Medtronic, Summit Partners, MBA HBS Sophie LaMontagne, Associate – The Lewin Group, Molecular Biology, Princeton Maeve O’Meara, Associate – Bain & Co., Economics, University of Virginia New Hire – Boston Scientific, Cardiologist, MD Brown, MBA HBS

Bob Higgins, Managing General Partner

Corey Mulloy, General Partner – Robertson Stephens, Whitman Group, MBA HBS

Wyc Grousbeck, Venture Partner – Glycomed, Celtics CEO, JD Mich, MBA Stanford

Bijan Salehizadeh, Partner – Medtronic, HealthCentral, MD Columbia, MBA HBS

Dean Banks, Vice President – Cytyc, J&J, MBA HBS

Jay DeCoons, Senior Associate – Medtronic, Summit Partners, MBA HBS

Sophie LaMontagne, Associate – The Lewin Group, Molecular Biology, Princeton

Maeve O’Meara, Associate – Bain & Co., Economics, University of Virginia

New Hire – Boston Scientific, Cardiologist, MD Brown, MBA HBS

Highland Healthcare Focus Areas 42 ------------------ Targeted therapeutics Personalized medicine Cancer Platform technologies Multiple “shots on goal” LIFE SCIENCES ------------------ Cardiology Drug-device convergence ------------------ Consumer-directed Aging baby-boomers CURRENT INVESTMENT THEMES MEDICAL DEVICES HEALTHCARE SERVICES Large markets Short path to human trials Serial entrepreneurs Leveraging trends HIGHLAND PHILOSOPHY

------------------

Targeted therapeutics

Personalized medicine

Cancer

Platform technologies

Multiple “shots on goal”

------------------

Cardiology

Drug-device convergence

------------------

Consumer-directed

Aging baby-boomers

Large markets

Short path to human trials

Serial entrepreneurs

Leveraging trends

Representative Highland Healthcare Investments 42 HEALTHCARE SERVICES LIFE SCIENCES MEDICAL DEVICES

VC Investing Environment

Deal Flow & Equity into VC-Backed Companies Amount Invested ($B) Number of Deals Source: Dow Jones VentureOne/Ernst &Young $25.7 2454 2006

Where are the VC dollars going? Dollars Invested 2006 IT 54% Other 4% Business & Consumer 10% Healthcare 32% Biopharma 57% Healthcare IT/IS 5% Healthcare Services 6% Medical Devices 32% Source: Dow Jones VentureOne/Ernst &Young $25.7 Billion $8.2 Billion

Tech Transfer Environment

1944 – Vannevar Bush, Head of Office of Scientific Research & Development Bush’s report “Science: The Endless Frontier” Urged government to become more involved in funding university research Led to creation of National Science Foundation 1980 Bayh-Dole Act: “ Perhaps the most inspired piece of legislation to be enacted in America over the past half-century” History

1944 – Vannevar Bush, Head of Office of Scientific Research & Development

Bush’s report “Science: The Endless Frontier”

Urged government to become more involved in funding university research

Led to creation of National Science Foundation

1980 Bayh-Dole Act:

“ Perhaps the most inspired piece of legislation

to be enacted in America over the past half-century”

Number of patents filed Number of license agreements signed & licensing revenue Number of new companies started Number of breakthrough technologies launched Ability to attract world-class graduate students How Universities Measure Success

Number of patents filed

Number of license agreements signed & licensing revenue

Number of new companies started

Number of breakthrough technologies launched

Ability to attract world-class graduate students

0 0.5 1.0 10 5 0 1.5 15 US patents (in ‘000s) filed issued Net license income $B US University Patents & Licensing Trends 93 94 95 96 97 98 99 00 01 02 03 Source: The Economist & Association of University Technology Managers

Milken’s “Top Ten” Rankings Source: The Milken Institute Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization, September 2006 By Number of Publications By Number of Patents Issued By Number of Start-ups UCLA 10 Univ of Wash 9 Wash U, St. Louis 8 Johns Hopkins 7 UCSD 6 UPenn 5 UCSF 4 University of London 3 University of Tokyo 2 Harvard University 1 University Rank Penn State University 10 Harvard University 9 Univ of Michigan 8 Univ of Chicago 7 UCSF 6 Univ of Wisconsin 5 Johns Hopkins 4 Stanford 3 MIT 2 CalTech 1 University Rank Univ of Minnesota 10 UPenn 9 USC 8 Univ of Illinois 7 Univ of Michigan 6 Stanford University 5 Georgia Tech 4 Caltech 3 Univ of CA System 2 MIT 1 University Rank

Overall “Top Ten” in Tech Transfer Source: The Milken Institute Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization, September 2006 Milken’s “University Technology Transfer & Commercialization Index” 2000 – 2004 *** Harvard University New York University University of Michigan University of British Columbia Brigham Young University University of Minnesota University of Florida Stanford University Caltech University of CA System MIT University 10 18 9 8 7 6 5 4 3 2 1 Rank

Commercializing Scientific Research: The VC View

Evaluating Opportunities: VC Criteria People Market Technology / Product Deal

People

Market

Technology / Product

Deal

People (Founders) Leading researchers in their fields of study Serial entrepreneurs with successful track records Ability to attract a world-class CEO, Board of Directors, SAB, and investors Understand their optimal role in the company

Leading researchers in their fields of study

Serial entrepreneurs with successful track records

Ability to attract a world-class CEO, Board of Directors, SAB, and investors

Understand their optimal role in the company

Market Potential for $1 billion+ market size Customers are quick adopters Known acquirers in the space Wall Street following Ease of regulatory approval (FDA) Coverage / Reimbursement (CMS)

Potential for $1 billion+ market size

Customers are quick adopters

Known acquirers in the space

Wall Street following

Ease of regulatory approval (FDA)

Coverage / Reimbursement (CMS)

Technology / Product “ Breakthrough” technologies with clear value propositions Platform technologies Strong IP position Follow-on potential

“ Breakthrough” technologies with clear value propositions

Platform technologies

Strong IP position

Follow-on potential

Deal Valuation Exit potential Terms: equity, licensing fees, and royalties Option pool Financing structure (current and future rounds) Co-investors

Valuation

Exit potential

Terms: equity, licensing fees, and royalties

Option pool

Financing structure (current and future rounds)

Co-investors

Case Studies

MIT – Equity ownership, license fees, milestone payments, and royalties Pioneering a new combination therapy – “Biologically-active devices” World-class academic founders with successful entrepreneurial track records Lead program Vascugel could transform major cardiovascular markets 2 clinical trials underway in 2006 P E R V A S I S T H E R A P E U T I C S $19.9 million A M O U N T R A I S E D Highland Capital Partners Flagship Ventures Polaris Ventures V C I N V E S T O R S Bob Langer, MIT Elazer Edelman, Harvard/MIT Jay Vacanti, Harvard/MGH F O U N D E R S

MIT – Equity ownership, license fees, milestone payments, and royalties

Pioneering a new combination therapy – “Biologically-active devices”

World-class academic founders with successful entrepreneurial track records

Lead program Vascugel could transform major cardiovascular markets

2 clinical trials underway in 2006

P E R V A S I S T H E R A P E U T I C S

P E R V A S I S T H E R A P E U T I C S

P E R V A S I S T H E R A P E U T I C S Pig

Harvard, Duke, and University of Wisconsin – equity ownership, license fees, and royalties MIT – annual license fees and royalties Platform using sophisticated informatics and robotics to synthesize DNA more rapidly and cost-effectively than current technology Creating a paradigm shift in “constructive biology” Founders are leaders of the synthetic biology field C O D O N D E V I C E S $33 million A M O U N T R A I S E D Highland Capital, Flagship Ventures, Khosla Ventures, Kleiner Perkins, Alloy Ventures V C I N V E S T O R S George Church, HMS Joe Jacobson & Drew Endy, MIT Jay Keasling, UC Berkeley F O U N D E R S

Harvard, Duke, and University of Wisconsin – equity ownership, license fees, and royalties

MIT – annual license fees and royalties

Platform using sophisticated informatics and robotics to synthesize DNA more rapidly and cost-effectively than current technology

Creating a paradigm shift in “constructive biology”

Founders are leaders of the synthetic biology field

C O D O N D E V I C E S

Spinout of Harvard Medical School & Dana Farber Cancer Institute Dana Farber – equity ownership, license fees, and royalties Specialty pharma company focused on the dermatology market Developing next generation of safer and more effective treatments for skin pigmentation disorders Team includes co-founders of Idexx, Immunex, Alnylam, Momenta, Vertex, Biogen and Genzyme M A G E N B I O S C I E N C E S $17.2 million A M O U N T R A I S E D Highland Capital Partners Venrock Associates TVM Capital V C I N V E S T O R S David Fisher, Harvard, DFCI Bob Langer, MIT Phil Sharp, MIT, Nobel Laureate F O U N D E R S

Spinout of Harvard Medical School & Dana Farber Cancer Institute

Dana Farber – equity ownership, license fees, and royalties

Specialty pharma company focused on the dermatology market

Developing next generation of safer and more effective treatments for skin pigmentation disorders

Team includes co-founders of Idexx, Immunex, Alnylam, Momenta, Vertex, Biogen and Genzyme

M A G E N B I O S C I E N C E S

Spinout of the Dana Farber – equity ownership Discovery and development of novel cancer therapeutics Proprietary in vivo cancer models for identification and validation of novel drug targets Collaboration with Merck 2 compounds in clinical trials World-renowned Scientific Advisory Board A V E O P H A R M A C E U T I C A L S $58 million A M O U N T R A I S E D Highland, MPM, Flagship, Oxford, Prospect, Venrock, and Greylock, and Merck V C I N V E S T O R S Ron DiPinho, HMS, DFCI Lynda Chin, HMS, DFCI F O U N D E R S

Spinout of the Dana Farber – equity ownership

Discovery and development of novel cancer therapeutics

Proprietary in vivo cancer models for identification and validation of novel drug targets

Collaboration with Merck

2 compounds in clinical trials

World-renowned Scientific Advisory Board

A V E O P H A R M A C E U T I C A L S S C I E N T I F I C A D V I S OR Y B O A R D Lynda Chin, MD, Dana Farber Cancer Institute Ronald DiPinho, MD, Dana Farber Cancer Institute Lewis Cantley, PhD, Harvard Medical School Tyler Jacks, PhD, MIT Center for Cancer Research Robert Horvitz, PhD, Professor of Biology, MIT, Nobel Laureate Richard Klausner, MD, Former Director of National Cancer Institute Raju Kucherlapati, PhD, Harvard Center for Genetics & Genomics David Livingston, MD, Dana Farber Cancer Institute Edward Scolnick, MD, Former President, Merck Research Labs Doug Hanahan, PhD, Professor of Biochemistry, UCSF

S C I E N T I F I C A D V I S OR Y B O A R D

Lynda Chin, MD, Dana Farber Cancer Institute

Ronald DiPinho, MD, Dana Farber Cancer Institute

Lewis Cantley, PhD, Harvard Medical School

Tyler Jacks, PhD, MIT Center for Cancer Research

Robert Horvitz, PhD, Professor of Biology, MIT, Nobel Laureate

Richard Klausner, MD, Former Director of National Cancer Institute

Raju Kucherlapati, PhD, Harvard Center for Genetics & Genomics

David Livingston, MD, Dana Farber Cancer Institute

Edward Scolnick, MD, Former President, Merck Research Labs

Doug Hanahan, PhD, Professor of Biochemistry, UCSF

Second-generation drug-eluting stents Engineer-founder Key contributor: Elazer Edelman (Brigham/MIT) Serial medical device entrepreneur as CEO (interventional cardiologist) Highland investment: $17M for 21% of company IPO in December 2004 (NASDAQ: CONR) Acquired by J&J for $1.4B C O N O R M E D S Y S T E M S $84 million (pre-IPO) A M O U N T R A I S E D Highland Capital Partners Easton Hunt Capital, Maverick, Radius Ventures V C I N V E S T O R S Jeff Shanley, VP Engineering for Purus, Inc. F O U N D E R

Second-generation drug-eluting stents

Engineer-founder

Key contributor: Elazer Edelman (Brigham/MIT)

Serial medical device entrepreneur as CEO (interventional cardiologist)

Highland investment: $17M for 21% of company

IPO in December 2004 (NASDAQ: CONR)

Acquired by J&J for $1.4B

Conor’s CoStar Stent C O N O R M E D S Y S T E M S

P R E D I C T I V E B I O S C I E N C E S Spinout of Harvard Medical School & Children’s Hospital Boston Novel diagnostic assays for informed cancer management Proprietary urinary protein biomarkers Potential for personalized treatment plans $10 million A M O U N T R A I S E D Highland Capital Partners IDG Ventures V C I N V E S T O R S Marsha Moses and Bruce Zetter, Harvard Medical School & Children’s Hospital F O U N D E R S

Spinout of Harvard Medical School & Children’s Hospital Boston

Novel diagnostic assays for informed cancer management

Proprietary urinary protein biomarkers

Potential for personalized treatment plans

Summary

Rules for Success Stay close to academic entrepreneurial “hotbeds” Build deep relationships with key university research centers and tech transfer offices Maintain stable of entrepreneurial managers Keep on top of cutting-edge science Key Takeaway: Most importantly, back exceptional people

Stay close to academic entrepreneurial “hotbeds”

Build deep relationships with key university research centers and tech transfer offices

Maintain stable of entrepreneurial managers

Keep on top of cutting-edge science

Key Takeaway:

Most importantly, back exceptional people

F E B R U A R Y 2 0 0 7 Commercializing Science: A Venture Capital Perspective R O B E R T F. H I G G I N S H A R V A R D B U S I N E S S S C H O O L S C I E N C E – B A S E D B U S I N E S S S E M I N A R

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