Sarsia Innovation AS Sarsia Innovation as The ‘Bergen Model’ for commercialisation spans the process from identification of a promising research project on to company growth and international expansion. Brussels, 11 September 2006 Hans Hekland CEO ”

2 How is it done at University of Bergen? Sarsia Innovation –Who is behind and why? –Track record The early-stage gap –Commercialisation chain –What's missing an why? The development of the Bergen model commercialisation –Sarsia faces the early-stage gap –The ideal model ? –The different players and their interface –Different shareholders for different phase and corporate government –Synergies

3 Sarsia Innovation as Industrial Development Corporation of Norway Institutional investors Sarsia was established in 2001 on the initiative of : Bergen High- technology Centre

4 Sarsia Innovation AS shall invest in research-based projects, and develop them into businesses of quality and size interesting for venture capital and industry investors. Sarsia Innovation – track record 155 Commercialisation projects 23 Start-ups 3 Trade sales 5 VC stage financing rounds 1 IPO Established ; Sarsia Life Science Fund (M€ 45) Sarsia Seed Fund (M€ 45)

5 University “spin-outs” faces the early-stage gap new companygrowth stageseed stage project Technology Transfer Office Venture Capital Business support and investment capital is provided by different commercialisation outfits all focusing at a specific stage of company development.

6 Why gap? The venture capitalist looks for ; Superior returns –Break through technologies –Crisp value proposition –Experienced Management –Clear exit options

7 Superior returns ? IRR (Thomson Venture Economics 12 Oct.2004) –European VC-fund: –Average 7,2% –Upper half 13,8% –Upper quarter 19,7% –European Buy-out fond: –Average 12,2% –Upper half 22,2% –Upper quarter 30,2% European early stage return; (EVCA 2003) –10yrs = 1,3% –5yrs = -11,8% Later stage; less risky, less work, quick exit

8 University “spin-outs” often fails on  Business concept /value proposition  Lack of management resources (int. network)  Unclear funding needs and milestones  Unclear exit (few options)  Inventors unrealistic expectations of value.

9 Sarsia Innovation faces the early-stage gap new companygrowth stageseed stage project Sarsia Innovation Venture Capital Capital Squeeze Incubator De-merger of VC investment Out source Seed investment 2005

10 ‘Bergen Model’ for commercialisation new companygrowth stageseed stage project BTO Sarsia Seed Fund Sarsia Life Science Fund close cooperation Sarsia Innovation as a facilitator for innovation - independent decisions - A linkage point and facilitator in this process. Investment decisions for the different phases are taken strictly independently. Information flows freely to allow for smooth cooperation and company development.

11 Sarsia Innovation as - a facilitator for innovation Sarsia Innovation as - a regional innovation network coordinator, which shall support and develop the innovative environment in the region. Sarsia Innovation shall actively support regional initiatives for: Incubator participant Capital infrastructure Incubator, Administrative support Network Strategy development

12 Specialized Network – Life Sciences Different country strengths Norway –Functional foods, diagnostics, med-tech, bio-marine –Cancer registry, large cancer hospitals, access to clinical materials Sweden –Pharma, diagnostics, med-tech –Biotech innovation focus –Life science private equity players Denmark –Pharma and med-tech –Several consolidating biotech clusters Finland –Med tech, functional foods –Innovation culture –Strong sector growth Helsinki- Turku Blå grønn allianse Medcoast Scandinavia Medicon Valley Stockholm- Uppsala Bioteam south Network partner SLSF office

13 BTO shall coordinate the commercialization process, manage the projects and IPR and assist in the development towards “Proof of Concept” on behalf of the researcher and the research institutions. BTO is a non-profit company owned by The University of Bergen, Institute of Marine Research and Bergen University Hospital. Further more : –Promote commercial utilization of research –Assist in attracting funding for further research and development 5 -> 8 Advisors Funded by Norwegian Research Council and the owners TTO deal-flow

14 Sarsia Seed Fund Sector focus The seed fund was established in 2006 with €45 million to invest in Norwegian early phase technology companies in the energy and biotechnology fields. Fund structure 30 to 40 seed companies between 2006 and Initially MNOK and then up to 4 MNOK in progress-dependent instalments until divestment. 5 to 8 companies to become success stories. Investors The fund is backed by regional and national private investors, and the Norwegian government.

15 Sarsia Life Science Fund as Sector focus The venture fund was established in 2006 with €45 million to invest in companies in the Nordic region. The fund has a pure life sciences/ biotechnology focus: - Diagnostics - Medical technology - Nutraceuticals - (Pharmaceuticals): Fund structure 10 to 15 venture companies before 2010, further 4-6 years in which follow-up investment In each company, we look to invest 8-40 MNOK in instalments The fund is backed by private investors

16 Capital, Shareholders and Management Sarsia Life Science Fund as Sarsia Seed Fund as Sarsia Venture Management as Sarsia Seed Management as Sarsia Innovation as Institutional investors Private investors (75%) Public investors (25%) Private / Public- partnership (50/50) 12% Bergen Teknologi Overføring TTO UiB IMR HB projects Public funding

17 Seed Fund structure and network… Industrial/ academic advisory board Dedicated management FUND capital M€45 Fund Board Investment & exit decisions Portfolio companies Joint network and deal-flow Support Joint back office

18 How is it done at University of Bergen Sarsia Innovation –Who is behind and why? –Track record The early-stage gap –Commercialisation chain –What's missing an why? The development of the Bergen model commercialisation –Sarsia faces the early-stage gap –The ideal model ? –The different players and their interface –Different shareholders for different phase and corporate government –Synergies