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CTI LIFE SCIENCES FUND Role of a VC in Helping Commercialize Early Stage Innovation November 19 th 2007 Presented by: Richard J. Meadows Managing Partner.

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Presentation on theme: "CTI LIFE SCIENCES FUND Role of a VC in Helping Commercialize Early Stage Innovation November 19 th 2007 Presented by: Richard J. Meadows Managing Partner."— Presentation transcript:

1 CTI LIFE SCIENCES FUND Role of a VC in Helping Commercialize Early Stage Innovation November 19 th 2007 Presented by: Richard J. Meadows Managing Partner CTI Life Sciences Fund

2 CTI LIFE SCIENCES FUND Canada – Biotech A pipeline which seems to be stalled Total Early Stage Number of companies financed Total amount invested (Can$M) After a sharp increase in the 90s, the number of early stage financings is decreasing After a sharp increase in the 90s, the number of early stage financings is decreasing In spite of the number of early stage financings, there is no increase in the number of late stage financings In spite of the number of early stage financings, there is no increase in the number of late stage financings –The pipeline is still too young… –… or it is not progressing Late Stage Source: Thompson Financial

3 CTI LIFE SCIENCES FUND U.S. – Biotech The pipeline is progressing Total Early Stage Number of companies financed Total amount invested (US$M) The number of early stage companies financed remains constant The number of early stage companies financed remains constant The pipeline is progressing The pipeline is progressing The growth in the total amount invested is partly explained by the progress of the pipeline The growth in the total amount invested is partly explained by the progress of the pipeline Source: Thompson Financial

4 CTI LIFE SCIENCES FUND Canada – Biotech The size of the rounds is much smaller than in the US Average size of the rounds (000 Can$) Number of companies Canada vs US Early Stage Late Stage X1.6 Compared to the US, in : Canadian GDP is 9% Canadian GDP is 9% The number of early stage rounds is 55%, whereas the number of late stage is only 15% The number of early stage rounds is 55%, whereas the number of late stage is only 15% The size of early stage rounds is 60 % and the late stage 33 % The size of early stage rounds is 60 % and the late stage 33 % Total amount invested: 10% (33% ES, 5% LS) Total amount invested: 10% (33% ES, 5% LS) US Canada 33% 14% ES LS

5 CTI LIFE SCIENCES FUND Foreign (US) investors play an important role in building exit value in Canadian deals Source: Giles Durufle, CVCA

6 CTI LIFE SCIENCES FUND Problems with Canadian VCs Source: Giles Durufle for CVCA

7 CTI LIFE SCIENCES FUND SeedSeries ASeries BSeries CMezz/PublGrants 100k1M5 – 10M10 – 20M20-30M30M+$ $ Discovery Preclinical Phase I Phase II Phase III Value Recognition Curve Value Building Curve Value Capture The Real Curves Value Creation vs. Value Capture Cost of Development $5-25m $10-20m $20-50m $100m+ Source:D.Ho BDC Health Ventures

8 CTI LIFE SCIENCES FUND Investment Strategy Picking the "right" Value Inflection Points Size of round: $5-15M Pre-Money $10-20M Post-Money: $15-35M Bump Up: 2-3 x Size of round: $1-5M Pre-Money $5-10M Post-Money: $6-15 M Size of round: $25-50M Pre-Money $50-100M+ Post-Money: $ M Bump Up: 3-5 x

9 CTI LIFE SCIENCES FUND Best Practices: The Blueprint Source: Giles Durufle, CVCA

10 CTI LIFE SCIENCES FUND What can we do? Ensure adequate financing. Ensure adequate financing. Bring in high quality investors. Bring in high quality investors. Fine tune/re-do the development plan. Fine tune/re-do the development plan. Finance to achievable milestones and be prepared to re-adjust. Finance to achievable milestones and be prepared to re-adjust. Bring in ad hoc support to help management create value. Bring in ad hoc support to help management create value.

11 CTI LIFE SCIENCES FUND Private Market Valuations on the Rise Sources: n=79 Life Science Co. in the Bay Areas Who Raised Money in 2006: Fenwick&West LLP

12 CTI LIFE SCIENCES FUND 1995/ / $15-30 mm Capital Invested $40-80 mm $15-30 mm Capital Invested $40-80 mm 3-5 years Average length years 3-5 years Average length years IPO Exit Form M&A > IPO $150 MM Average IPO price $200 MM $150 MM Average IPO price $200 MM 2-4 Number of syndicate members 5-7 Source : JSB Partners The Changing Investment Paradigm

13 CTI LIFE SCIENCES FUND Raison D'être of CTI Life Sciences Fund "Where broad Operational and VC experience come together to create and realize shareholder value in Canadian Life Sciences Companies with pre-clinical and clinical drugs and enabling technologies.

14 CTI LIFE SCIENCES FUND CTI Life Sciences Fund Overview Emphasis on Quebec & Canadian life sciences companies with pre-clinical, clinical drugs and enabling technologies. An investment team that combines Operational and VC experience. An investment team that combines Operational and VC experience. A unique pro-active exit strategy A unique pro-active exit strategy Through active post investment management. Through active post investment management. Leveraging relationships with top advisors and US VC investors to position companies for successful exits. Leveraging relationships with top advisors and US VC investors to position companies for successful exits. M&As vs. I.P.Os. M&As vs. I.P.Os. First Close: CAD $71 million, June First Close: CAD $71 million, June Target size: CAD $100 million, Achieved March Target size: CAD $100 million, Achieved March

15 CTI LIFE SCIENCES FUND Value Creation happens once the Investment Decision has been made.

16 CTI LIFE SCIENCES FUND CTI Life Sciences Fund – People Jean-François Leprince -Managing Partner Accomplished leader with 30 years of multifunctional, multi- geographical experience in the pharmaceutical industry Richard Meadows-Managing Partner VC experience in two multi-billion dollar private equity funds along with 15+ years Business Development experience in the pharmaceutical industry Ken Pastor General Partners Representative 20 years experience in the financial market Shermaine Tilley – Principal 20 years experience in the biotech industry, including investment management, consulting, tech transfer and strong academic experience


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