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"So you want to raise funding and build a team?"

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"So you want to raise funding and build a team?"

  1. 1. “So you want to raise funding and build a team?” Few lessons learned Paul Lammers, MD, MSc President & CEO Triumvira Immunologics InnoTech Meeting, San Antonio, April 12, 2018
  2. 2. “An often heard story…” InnoTech Meeting, San Antonio, April 12, 2018
  3. 3. Life Sciences Venture Funding ($ millions) 2018 Year to Date Therapeutics Diagnostics HC Technology HC Services & Other 9,222 860 815 310 87 47 35 17 Total Amount Avg Investment InnoTech Meeting, San Antonio, April 12, 2018
  4. 4. Paul Lammers, MD, MSc Brief career overview  Dutch Biologist & physician by training; spent almost 30 years in pharma and biotech; all in therapeutics  Worked in Europe and US; in HQ and local sales-driven organizations; from big Pharma (n=35,000) to small biotech (n=3)  Experience in general management, P&L responsibility, business development, clinical development medical affairs, regulatory affairs, drug safety, pharmacovigilance, medical information, quality assurance, contract manufacturing  Fund raising & corporate transaction experience  Federal & State grants  Venture capital firms: strategic and traditional  IPO on NASDAQ  Reverse merger  Moved family 5 times for job opportunities InnoTech Meeting, San Antonio, April 12, 2018 Therapeutic Modalities:  Small molecules  Monoclonal Antibodies  Recombinant Proteins  microRNAs  Engineered T cells Therapeutic Areas:  Contraception  Infertility  HRT  Surgical muscle relaxation  Cystic Fibrosis  Seasonal allergic rhinitis  Erectile dysfunction  Multiple Sclerosis  Oncology
  5. 5. The Mirna Therapeutics Experience 2009-2017  $ 32 million in Texas State Funding  $ 77 million in 2 Private Venture rounds  $ 48 million IPO  Building a team along the way  Running a Public Company  Finished with a Reverse Merger InnoTech Meeting, San Antonio, April 12, 2018 Austin, Texas
  6. 6. Mirna Therapeutics Fund Raising & Team Building Chronology  Mirna Therapeutics spin-out from Asuragen in Austin: received $ 5 million in operating expenses and IP (became Series A)  Joined as President & CEO in Nov 2009 (employee nr. 7), with BOD charter to “Turn company into a Therapeutics Company”  Dec 2009: Received $ 5.0 Million from Texas Emerging Technology Fund (TETF)  Started to build the team: hired industry-experienced individuals from Genentech, Pfizer, Azaya; half the team came from Southern California; n=12 total  2010: on the road trying to raise $15 million; interest from NEA & Pfizer Ventures, wanted to co-lead a $25 million round, but ‘data talks’….  2010: Were successful in first ever Cancer Prevention & Research Institute of Texas (CPRIT) round of financing: 3/42 companies awarded; received highest award: $10.3 million InnoTech Meeting, San Antonio, April 12, 2018
  7. 7. Texas State Funding Great non-dilutive money, but still….  Texas Emerging Technology Fund (TETF):  Basically, almost every company that requested money, did get it ($250K - $ 5 M)  Legislature not in favor; program fizzled out  CPRIT: “there is pros and cons to everything in life….”  Key issue to consider in application: “It is not all about the science”  Great non-dilutive money  Accounting and auditing requirements are high InnoTech Meeting, San Antonio, April 12, 2018
  8. 8. Mirna Therapeutics Fund Raising & Team Building Chronology  2011: $ 1.5 million (internal) Series B as qualifying round for TETF; could still convert at first external round at 20% discount (“a really bad deal…”)  2011-2012: On the road trying to raise a $25 million, first institutional, Series C round: “Having money in the bank is a double-edged sword”  October 2012: Raised a $35 million Series C, with Sofinnova, NEA, and Pfizer Ventures (PVI) as anchor investors, and Osage University Partners, Correlation Ventures, and internal HNWI as ‘followers’  Built a very strong Board of Directors: a HUGE advantage!  Further expanded the team (n=21) InnoTech Meeting, San Antonio, April 12, 2018
  9. 9. Road to the IPO “May You Live in Interesting Times”  2012 – 2014: The world of IPOs is heating up big time, including several of Mirna’s competitors (Regulus Therapeutics; Dicerna Pharmaceuticals) InnoTech Meeting, San Antonio, April 12, 2018
  10. 10.  Sept 2013: BOD decides to take Mirna public on NASDAQ  2013 – 2014:  Built a bankers syndicate: ideally a mix of ‘bulge bracket’ and niche sell-side banks  Meet with a lot of banks; focus on experience and reputation of research analysts (“be prepared for change”)  Syndicate I identified:  Hired a corporate law firm with lots of experience in biotech IPOs  Latham & Watkins (Menlo Park, CA)  Weekly S-1 drafting sessions F2F with bankers and lawyers  S1-drafting is a time- and energy-consuming exercise Road to the IPO “May You Live in Interesting Times” Bookrunners Leerink Cowen Co-Managers RW Baird Wedbush InnoTech Meeting, San Antonio, April 12, 2018
  11. 11.  June 2014: Mirna files confidentially for IPO (JOBS Act)  Mid 2014: Banks organize 34 ‘Test The Water’ (TTW) meetings with buy-side investors:  NYC, Boston, San Francisco, San Diego, Los Angeles  Banks collect potential investor feedback after the meetings:  # 1 issue = The Team !  Key feedback received: 1. We would like to see several encouraging responses in the clinic 2. Have you considered conducting a mezzanine/cross-over (XO) round of financing first, before going public?  Sept 2014: BOD decides to put IPO in hold, pursue XO round first Road to the IPO “May You Live in Interesting Times” InnoTech Meeting, San Antonio, April 12, 2018
  12. 12. Mezzanine Round of Financing March 2015  Q4 - 2014: Back on the road trying to raise funding; receive term sheet from Baxter Ventures for a Series D mezz round on Christmas Eve  Jan 2015: Start marketing the TS during JP Morgan  We observe patient responses in Phase 1 trial (PRs; SDs)  March 2015: Close Series D with good group of investors:  Baxter Ventures as lead (but only ‘Board Observer’ seat)  Sofinnova, NEA and PVI as anchors take 50% of round  XO investors include: Eastern Capital; Celgene, Rock Springs Capital; Sante Ventures, Morningside, Osage University Partners, Correlation  Target raise $25 million; over-subscribed: raised $35 million InnoTech Meeting, San Antonio, April 12, 2018
  13. 13.  Q2-2015: BOD decides to re-initiate the road to an IPO  Identified a new bankers syndicate (2):  Bookrunners to split 80%  Co-Managers’ pity fight over how to split 20%  Sept 2015: Mirna files S-1 publicly  IPO Target $ 68 million @ price of $13-15/share  Mirna hires experienced public company CFO  Initiate IPO road show:  69 meetings in 7 days: PA – Baltimore – NYC (2 days) – Boston – San Francisco – Los Angeles – Denver – San Diego  Lots of interest, banks excited about building a promising ‘order book’ InnoTech Meeting, San Antonio, April 12, 2018 Road to the IPO “May You Live in Interesting Times” Bookrunners Citi Bank Leerink Co-Managers Oppenheimer Cantor Fitzgerald
  14. 14.  Day before Pricing: Martin Shkreli happened: biotech values drops 22% !; several interested parties back out  Sept 30, 2015: Mirna closes IPO: gross proceeds of $48 million @ price of $7.00/share; insiders take 50% to maintain relative percent ownership  Cost of IPO: ± $ 3.5 million, mostly law firms & printer  Banks distribute ± $ 3.3 million (7%) amongst the syndicate  Received 2nd CPRIT Award of $16.7 million on same day as IPO and at same price InnoTech Meeting, San Antonio, April 12, 2018 Road to the IPO “May You Live in Interesting Times”
  15. 15. The End of Mirna A Reverse Merger  Immune-related adverse events developed in about 10% of patients treated in a Phase 1 clinical trial, including life-threatening Cytokine Release Syndrome  Decision made in Sept 2016 to stop the program; Board accepted my suggestion to not try to discover a new delivery method (despite $ 60 million in the bank)  From 36 employees down to 12, then down to 4 till the end  Oct 2016 – August 2017: Wedbush hired to manage a potential strategic transaction process  Initial interest was enormous: ± 140 companies; Meetings held with 49 (!) companies  Funnel evaluation process ended with 5 lead companies; Synlogic (Cambridge, MA) selected  Drafting S-4 more work than S-1; Reverse merger completed August 2017 InnoTech Meeting, San Antonio, April 12, 2018
  16. 16. Few Lessons Learned…. InnoTech Meeting, San Antonio, April 12, 2018
  17. 17. Building your Team (‘it all depends…’) The small biotech conundrum: “You need a team to raise the money, you need money to raise a team” InnoTech Meeting, San Antonio, April 12, 2018 Initial Critical Functions Finance CMO CSO or CTO Preclinical Development Project & Outsource Manager R&D scientists Initially Not So Critical Functions Regulatory Affairs Clinical Operations Manufacturing Business Development Administrative Assistant Outsource Do it yourself
  18. 18. “Will Travel for Food” InnoTech Meeting, San Antonio, April 12, 2018 “If you want to raise money for your company, you live in Boston, New York, and San Francisco”
  19. 19. “Will Travel For Food”  2014 - 2015: ± 150 investor meetings  JP Morgan Healthcare Conference (SFO)  BIO CEO Conference (NYC)  BIO Investor Forum (SFO)  BIO-Europe  BIO Sofinnova Conference (JP)  Bio Int’l Convention (cave: do not present)  Sachs Investor Forum  Biotech Showcase (SFO)  MedPace Forum (SFO)  Etc. InnoTech Meeting, San Antonio, April 12, 2018 • Be prepared to present in front of a tiny audience • Be prepared to only have service providers attend your presentation, just to introduce themselves to you after the talk • Be prepared to pay about $3,000 for each presentation
  20. 20. “Will Travel For Food” All of the Other Meetings  Boston Biotech CEO meeting (a lot of peers, a decent number of investors)  NY Biotech CEO meeting (a lot of peers, a decent number of investors)  Therapeutic Area meetings: e.g., for oncology  AACR  ASCO  ASH  SITC  IO meetings  Texas Life Sciences Venture Forum  Texas Life Sciences CEO Meeting  Etc. InnoTech Meeting, San Antonio, April 12, 2018
  21. 21. The Investor Pitch “Practice Makes Perfect”  Be prepared for presentations of: 60 - 45 - 30 - 20 – 15 – 8 – 4 minutes  “If you cannot do PowerPoint, you will not be successful in business”  “I know you love the science, but easy on the data dump” (back-up slides)  Be prepared to give the same talk 10 times in a row (and last one should sound as enthusiastic as first one)  Tell yourself “You can do it, You can do it, and….You can do it” InnoTech Meeting, San Antonio, April 12, 2018 ‘ridiculous territory’
  22. 22. So You Want To Be A Public Company CEO…? Be Careful of What you Wish for  Pay is bigger, but so is personal accountability….(D&O insurance!)  Awesome in good times, but we all know, those normally don’t last….  Be careful what you promise, because if you don’t deliver, Wall Street can be ruthless….  Institutional investors are mostly great, but retail investors can a be a royal pain…  Please don’t watch your company’s ticker symbol more than once a day, will drive you crazy..  ‘Stocks go up on rumors, go down on news’, so hold on for the ride! InnoTech Meeting, San Antonio, April 12, 2018
  23. 23. PATIENCE InnoTech Meeting, San Antonio, April 12, 2018 PERSEVERANCE BUILD TRUST BE HONEST & OPEN STAMINA BUILD CONNECTIONS SHOW CONFIDENCE The Bottom Line

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