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Four years on …. lessons learned September 2011. 1 What were the initial aims of the MRCF? Established in 2007 to provide early-stage funding for Member.

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Presentation on theme: "Four years on …. lessons learned September 2011. 1 What were the initial aims of the MRCF? Established in 2007 to provide early-stage funding for Member."— Presentation transcript:

1 Four years on …. lessons learned September 2011

2 1 What were the initial aims of the MRCF? Established in 2007 to provide early-stage funding for Member Institutes Established as a collaboration between the Institutes and Investors A flexible investment structure An initiative that increases the commercialisation capabilities for each Member – in a sustainable way Provide training and capability sharing through IRC process and Internship Bridge the “valley of death” funding gap from basic R&D through translational/development funding into funding clinical evaluation (Phase I & II) Provide a return to the Superannuation Fund investors

3 MRCF key features 2 All risk capital from private investors ($30M) and, more recently, the Federal Government ($20M) Operational costs comes from: o Investors, o 4 State Governments, and o The participating Institutes ($35K per Institute per year) Fund can invest up to $4 million in each opportunity –Investors have follow-on and co-investment rights Fund has ‘first right of review’ of technologies where an Institute is seeking investment financing for a technology, but not a first right to invest

4 Membership is now 29, national and growing… Victoria (11) Alfred Health (Alfred Hospital)Baker IDIBurnet Institute (Austin) Centre for Eye Research AusDeakin Institute of BiotechFlorey Institute Neurosciences Melbourne HealthMurdoch Children’s Research InstPeter MacCallum Research Institute St Vincent’s InstituteWalter and Eliza Hall Institute NSW (8) Centenary InstituteGarvan InstituteHeart Research Institute Hunter Medical Res InstituteNew England Area HealthThe George Institute The Victor Chang Cardiac Research Institute Woolcock Institute Being relaced by i3 (UTS) in 2011/12 Illawarra Health WA (3) Telethon Inst Children’s HRWAIMRWA Department of Health QLD (7) AIBNCentre Clinical ResearchDiamantina Institute Molecular BioscienceMater Medical Research InstituteQIMR QLD Department of Health 3

5 4 A structured and consistent review process Investments are recommended to the Fund Manager Fund Manager completes full due diligence, approves and recommends to Trustee Member Institute 1 Member Institute 2 Member Institute 3 Member Institute ……29 Member Institutes identify opportunities within their institute and bring them forward to the investment Review committee Investment Review Committee (IRC) Investment Review Committee is comprised of a representative from each member Institute and the Fund Manager Trustee provides final approval, ensuring that the Fund Manager has completed a comprehensive and consistent review process

6 Technologies reviewed and progressed 172 Opportunities have been disclosed 60 have progressed to the detailed review process 11 investments made and 1 now closing

7 Current Investments The 11 investments in the portfolio are: BACE Therapeutics - developing novel drug candidates for the treatment of Alzheimer’s Disease Fibrotech Therapeutics - developing novel drug candidates for the treatment of tissue fibrosis prevalent in a range of chronic conditions. Fluorotrop - developing a novel assay for determination of HIV co-receptor usage (tropism) Global Kinetics Corporation - developing a ”wrist watch” data logging device to record success of therapeutic intervention in Parkinson’s Disease MiReven - in vivo proof of concept studies to demonstrate the clinical potential of a defined micro RNA as a novel anti-cancer agent Osprey Medical - developed to avoid the often severe kidney damage that can occur during coronary interventions Global Kinetics – device monitoring therapeutic effectiveness of Parkinsons Disease therapies Otifex - developing an intranasal betahistine spray for the treatment of Otitis Media with Effusion (OME) in children Polyactiva - developing an ocular implant for the treatment of glaucoma SeeD4 - developing a diagnostics test for use with whole blood to determine the CD4 status of HIV positive individuals. Vaxaas – developing a novel transdermal vaccine patch Labour Diagnostic project funding – proof-of-concept for the use of the ratio of two pregnancy hormones to predict the timing of when a pregnant woman will deliver her baby

8 7 InvesteeInstituteMRCF Committed Co-investment/ Matching LeverageTotal FibrotechSt Vincent’s$1M$3M$3.2M$7.2M FluorotropAlfred$304,000 SeeD4Burnet$377,000$2.5M$2.9M Global KineticsFlorey$990,000$250,000$1.24M Osprey MedicalBaker$1.522M$10.5M$1.1M$13.3M BACE Therapeutics WEHI$620,000$100,000$720,000 Labour Diagnostics Hunter MRI$275,000$205,000$480,000 PolyActivaCERA$1M$1.2M$2.2M MiRevenWAIMR$647,750 OtifexMCRI$564,000 $1.12M $7.1MTotal$30.12M MRCF Commitments and Leverage

9 MRCF Board of Directors 8 DirectorsAffiliationBackground Hon. Alan Stockdale (Chairman) BakerCurrent National President of the Liberal Party Director, Senetas Corporation Director, NSW Treasury Corporation Former Senior Executive, Macquarie Bank Former Treasurer of Victoria Former Barrister Denise AllenBurnetManaging Director, Chelcor Pty Ltd Director of Av Super and Utilities of Australia Former Managing Director of Citigroup Asset Management 20+ years in superannuation and investment Ross KingGarvanManaging Director, JBWere Goldman Sachs 20+ years investment banking experience Former senior executive at Anglo American Wayne McMasterFlorey Peter Mac Partner, Mallesons Stephen Jacques Head, National IP and Life Sciences Practice Former Managing Partner at Allens Arthur Robinson Winsome HallInvestorsChairman, Zurich Superannuation Director, State Super Financial Services Director, Aria Superannuation Previously, Branch Secretary of large public sector union Hon. Peter BeattieQIMR/AIBNClemson University and University of Queensland Previously Commissioner to the Americas Previously QLD Premier

10 MRCF Manager - Brandon Capital Partners Dedicated Life Sciences investment fund manager Funds under management -$10 million Medical Research Commercialisation Fund – 2007 -$40 million IIF funding for MRCF awarded Nov 2010 -$50 million Innovation Investment Fund – BBF1 – Jan 2008 The Brandon Team -7 Investment Professionals (Melbourne/Sydney) -International Venture Partner (US) & Advisor (EU) -Office Manager and CFO Brandon team all have relevant local and international experience -Scientific (PhD’s) and business (MBA, FINSIA) training -Operational pharma/biotech management, deep drug development experience, business development and technology transfer -Venture investment 9

11 Lessons learned… Nearly all early stage opportunities are not investment ready. They often require: -A thorough IP review including Freedom to Operate searches (often by a qualified US attorney) – needs budget allocation - Contact with prospective exit partners (big pharma, med device companies) to understand what they need to see in a data package - Sometimes a refocussing of clinical trial program to a more manageable format (recruitment issues, length of the trial program etc) - Recruit project management expertise - A realistic budget and timetable This can lead to frustration by the Institute. Need to keep the Institute informed/involved in the process (Stakeholder management)

12 The Challenges…. Access to co-investors is a major issue (capital scarcity – no new funds being formed) 10 year closed end funds not aligned to biotech investing. New models needed? Look at the Californian Institute for Regenerative Medicine. Can we adapt it? Continuing role for Government. Long term investing by Government has the potential to produce significant cost savings to the health care budget (indirect returns), Government bond issue? Capital efficiency is key.


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