1. Scale up event
November 21, 2017
15/05/2017
Johan Cardoen

2. Financing life cycle of a biotech company
CASH-IN
TIME
VCs, Acquisitions/Mergers &
Strategic Alliances
Angels, FFF
Seed Capital
Early Stage
Later Stage
Mezzanine
3rd
2nd
1st
IPO
Public
Market
Secondary
Offerings
Public Company
Operating Cash Flow
Found NewCo
Validate concept
Complete business plan
TT funds
Sales
POC in place
Concept
Product support
Additional clinical data
Prototype/
Research
Product development
Product
introduction

3. Value creation process in therapeutics Long term, high risk
Value creation process in therapeutics Long term, high risk* and capital intensive
Value inflection point
*overall POS: 8%

4. Biotech start-ups: business models
Platform companies
Asset-centric companies
Drug Discovery platform: LLC model
Combination of assets

5. Biotech platform companies
Discovery/Technology platform is the differentiator and back bone
Risk spreading: many shots on goal, suitable for deal making
Long timelines towards main value inflection point
First platform development and validation
Develop proprietary pipeline
High capital needs
Therapeutics, diagnostics and agbio

6. Asset-centric Asset is the differentiator and key value driver
Single shot on goal
Binary: high risk, high gain
Less capital intensive – but still long timelines
“Build to Buy model”

7. Company age at time of acquisition per sub-sector
Source: Kempen 2017

8. Biotech in Europe: current financing climate
Start-up financing: overall positive
Many VC funds raised successfully new funds over the past 3-4 years
Many VC funds (also US based) scout actively for dealflow in EU
Despite more IPO activity in the US (at higher valuations) – there are several biotech-friendly stock markets in EU (Euronext, LSE, Swiss Exchange, CSE...)

9. Scale-ups in Biotech: challenges
Significant capital required to finance a biotech (therapeutics) company towards a ‘cashflow-positive’ position
Biotech investors are mainly VC funds-most closed-end funds (typically 10 yrs)
High financing needs push sometimes companies pre-maturely towards exit mainly through a trade sale
Biotech-friendly stock market is key for biotech companies to fuel path towards sustainability
EU lack growth equity funds compared to the US
More and more EU biotech have dual listing

10. Scale-ups in Biotech: opportunities
Availability of growth equity in EU could contribute to move many EU biotech companies towards a sustainable biopharma company (e,g, in US Amgen, Celgene, Gilead, Vertex, Biogen etc...)
Increasing liquity on EU stock markets for listed biotech companies prevent the risk of shifting the strategic decision center to the US