Venture capital investment in life sciences in Missouri is lower than other Midwestern states like Ohio and Minnesota. In 2011, Missouri saw $168.7 million invested in 9 life sciences companies, compared to over $200 million invested in Minnesota and over $175 million invested in Ohio. The lower levels of venture funding in Missouri can make it challenging for early-stage life sciences companies in the state to access capital needed for research and development. Speakers on the panel discussed strategies for attracting more venture capital to Missouri, including increasing partnerships between investors, entrepreneurs, universities, and industry.
2. 2012 BIO Benchmarking Class
Senator S. Kiki Curls Representative Sue Allen
Kansas City - Democrat Town & Country - Republican
Majority Caucus Secretary
Representative Anne Zerr Representative Mike Kelley
St. Charles - Republican Lamar - Republican
Representative Casey Guernsey
Representative Shelley Keeney
Bethany - Republican
Marble Hill - Republican
Majority Caucus Chair
Representative Gail McCann
Representative Marsha Haefner
Beatty
St. Louis - Republican
Kansas City - Democrat
3. 2012 BIO Benchmarking Class
Representative Margo McNeil Representative Pat Conway
Florissant - Democrat St. Joseph - Democrat
Representative Jeanne Kirkton Representative Steve Cookson
Webster Groves - Democrat Fairdealing - Republican
Representative Bart Korman
High Hill - Republican
4. Announcements
July 19, 2012 - The JOBS Act, Reg A, Small Cap IPO and Crowdfunding
The Federal Reserve Bank of St. Louis
Information about the event is available as you exit.
Sept. 13, 2012 - Next PLSN Meeting
Details coming soon!
5. Panel
Dan Broderick – Senior Fellow, BioGenerator and
Vice President, BioSTL
Karen Spilizewski – Vice President, RiverVest Venture
Partners
J. Joseph Schlafly III – Senior V.P. & Director of Public Finance,
Stifel Nicolaus and Co.
7. Plant and Life Science Network
July, 2012
D. J. Broderick
8. NYSE.com
Investment Company Institute (12/31/2010)
Hedge Fund Reports (12/31/2010)
Thomson Reuters (12/31/2010)
PWC MoneyTree (12/31/11)
NVCA
Angel Capital Association
Thanks to John Taylor, V.P Research, NVCA
9. $16,700
$18,000
$16,000
$14,000
$12,000
$10,000 Venture capital
$8,000 $5,666 = 0.2% of US GDP
$6,000
$4,000 $1,917 $800
$2,000 $177
$0
NYSE Mkt Equity Mutual Hedge Funds Buyout Venture
Value Funds Funds (Est) Capital
US GDP is $12.5 Trillion
14. Uncertain regulatory environment – FDA
Higher cost of development
◦ Due to regulatory
Cost of pre-IND/IDE studies
Cost of human trials
Increased numbers, tests and length of follow up
“Allowing” Angels to “de-risk” the deal
◦ To raise money today most companies need…
at least drug safety data – or
first in man device studies
16. Iowa, Indiana, Illinois, Kansas, Kentucky,
Michigan, Minnesota, Missouri, North Dakota,
Nebraska, Ohio, Oklahoma, South Dakota,
Wisconsin
17. % of Deals Done 4Q 2009 through 3Q 2011
Healthcare
Services, 11,
5%
Biotech, 118,
49%
Medical
Devices, 110,
46%
# of Deals roughly even between devices and biotech,
18. $ Invested 4Q 2009 through 3Q 2011
OK,KY,ND,NE
IN KS MO 3%
MI 2% MN
WI 6% 3% 2% 27%
9%
IA
9% OH IL
15% 24%
20. $ Invested 4Q 2009 through 3Q 2011
HC Services
4% Other
10% Bio
Bus Products 26%
5%
IT Svcs
8%
Ind/Energy Devices
8% 15%
Media/Ent SW
10% 14%
41% of $ invested in life science related companies
Ag not a category by itself – yet!
21. With R$D budgets being cut corporations are
turning to alternative sources for new
products like start-up companies
Corporate VC will be a more important source
of funding
Need to understand strategic needs of the
investing corporation
25. Percentage
of Groups
Angels clearly like investing at the stages
important to BioGenerator
26. Angel investors are an increasingly important
source of capital for start up companies
◦ Amount of invested capital in 2011 about 21 billion
dollars!*
◦ Almost equal to Venture Capital Firms
This is not going to change in foreseeable
future
* Burrill and Associates
27. Existing
◦ VC
MHIN, NVCA, Past co-investors
◦ Angels
Arch, FTL Capital
Emerging
◦ Other VC’s – new relationships developing
◦ New Angels
M-COIN, Hyde Park – Many more
Seek new Angels – Locally – most important
◦ Corporate investors
28. Careful evaluation of financing risks
Thoughtful, (expert) design of seed funding
milestones – value drivers
Deal selection – needs to be “special”
◦ Solve a big problem
◦ Extraordinary team
◦ Reduced financing risk – quick to human data
◦ Pre-series A value proposition
Data, fill out team, human data, IDE/IND (or equiv.)
◦ Some deals requiring VC funding will not be done
29. BG is a credible source of deals – life blood of VC’s
Amount of NIH and other Government sources of grants
(RO1 and SBIR/STTR)
◦ Washington University, St. Louis University, UMSL,
Donald Danforth Plant Science Center
Infrastructure – existing and emerging
◦ Bio STL – very impressive, momentum builder
◦ BAL – best in class, nothing else like it
◦ Deal pace – 26 deals, ~30 months
◦ i6, EDA grants, local cooperation/coordination
◦ BG, TREX, ITEN, Helix, Arch Grants etc.
31. Plant and Life Sciences Network
July 17, 2012
Karen Spilizewski
32. 2011 US Venture Investing
Total VC investment in 2011 = $32.5 billion
VC investment in Healthcare = $9.1 billion
33. Total US Healthcare Financings
$M invested
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$-
2005 2006 2007 2008 2009 2010 2011
Medical Devices and Equipment Biopharmaceuticals Healthcare Services & IT
34. Midwest Health Care Venture Investment (By State)
State 2011 2010 2009 2008 2007
$ Millions # of Cos. $ Millions # of Cos. $ Millions # of Cos. $ Millions # of Cos. $ Millions # of Cos.
Minnesota 223.3 24 138.7 20 199 23 318.9 22 296.1 25
Ohio 177.8 67 147.2 47 105.4 40 189.1 43 295.5 44
Missouri 168.7 9 19.9 9 65.8 8 50.2 11 69.6 7
Western PA 67 25 86.2 20 37.8 24 126.2 33 101.4 17
Wisconsin 53.8 9 51.3 9 16.2 10 48.5 8 56.2 12
Illinois 44.2 9 160.9 11 38.9 8 97.3 13 125.5 7
Michigan 30.8 16 76.3 12 102.2 14 105 12 56.2 5
Kansas 18.5 2 14.5 13 4.3 5 16.9 9 56.6 6
Indiana 14.1 9 25.05 16 76.3 14 75.4 7 135.6 10
Kentucky 11.5 7 11.4 4 97.3 7 19.2 6 32 4
Iowa - - 7.3 1 36.8 3 4 1 - -
Total 809.6 178 738.9 161 780 156 1,050.5 165 1,224.7 137
Data compiled by BioEnterprise from various sources
35. 2011 Missouri Healthcare Deals
• Advanced ICU Care - $8 million
• Cardialen – $0.74 million
• Endostim - $5.55 million
• Essence Group Holdings - $61 million
• Nawgan - $6 million
• Pulse Therapeutics - $1.33 million
• Venti - $15.1 million
• Veran Medical Technologies - $15 million
• HealthMEDX - $56 million
36. Midwest Health Care Venture Investment
(2011 - By Sector)
$251
$295
Medical device
Health care IT and
service
Biopharmaceutical
$259
Data compiled by BioEnterprise from various sources
37. How Ohio Started in 2002
• Private/Institutions
– Focus on entrepreneurs and innovation
– Technology transfer
– Venture firms and professional services
• Philanthropy
– Fund For Our Economic Future: $90 million
– Investments for capital formation
• Public
– State of Ohio: $2.3 Billion+ Capital, Operating Support, Business
Attraction
38. 2002: Ohio Commitment
• $1.3 Billion, 10-Year Technology Initiative – Ohio Third Frontier
– Funding for:
• Research distinctiveness and translation
• Capital formation and attraction
(seed and venture)
• Entrepreneurial infrastructure (inc. BioEnterprise)
• Company acceleration
– Collaboration required, nationally assessed
• Capital – Ohio Capital Fund
– $250 million to invest as LP
– High-tech growth loan fund
• Annual general operating support
• Plus related business attraction and physical development