The document discusses commercializing scientific research from a venture capital perspective. It provides background on the author and their firm Highland Capital Partners. It then discusses the venture capital investing environment, the tech transfer environment at universities, and criteria for evaluating investment opportunities. The document concludes by presenting several case studies of successful companies spun out of universities that received venture capital funding, and emphasizes the importance of backing exceptional people.

1. 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

3. Background

6. Representative Highland Successes

9. Representative Highland Healthcare Investments 42 HEALTHCARE SERVICES LIFE SCIENCES MEDICAL DEVICES

10. VC Investing Environment

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

12. 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

13. Tech Transfer Environment

16. 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

17. 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

18. 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

19. Commercializing Scientific Research: The VC View

25. Case Studies

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

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

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

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

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

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

39. Summary

41. 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