Transcript Slide 1

A VC Perspective
What are
Biotech VCs
Looking For?
Vikas Goyal, SR One
[email protected]
Yale Biotech Bootcamp
May 2015
1. VCs Evaluate Your Whole Company
Goyal’s 8 P’s of a Biotech Newco
Purpose
What clinical / market problem will you solve?
People
What are your relevant capabilities?
Platform Tech
What innovation enables you?
Proof-of-Concept
Why should I believe it will work?
Product Pipeline
What products will you deliver?
Plan
How will my $$ be spent? Path to Exit / NDA?
Processes & Culture
How will your company work together?
Partners
Why will industry want to work with you?
2. VCs Want to Say No Quickly
SR One’s Annual Deal Funnel
700-1000 Companies Met
400-500 Reviewed
25-40 CDA & Diligence
15-20 Full Partnership
10-15 Full Committee
5-10 Invested
3. You Must Differentiate Your NewCo
Make a Strong First Impression
The VC “Pitch” Flow Chart
Fund Fit?
Intro
Email
Live
Strategy,
lifecycle,
new deals
Individual’s
interests
Websites,
blogs, and
tweets . . .
It’s very
easy so
please get
warm intro
Share
useful info
without
CDA
Strong
“hook” is
critical
Bring your
team
(LinkedIn!)
Debrief
Ask for
feedback;
translate
VC speak
Limited
follow-up
means . . .
3. You Must Differentiate Your NewCo
Avoid Common Reasons For Rejection
Source: 116 keyword reasons given for rejecting 57 business plans as described in short free word responses from 15 biotech VCs; responses were collected
via an online Google Form survey between Feb-Apr 2014. Word Cloud generated by Wordle™
Why We Really Rejected Them
Code for Investor Fit
Each partner at each firm
has a preferred stage
Be Honest
Analogue ≠ Lead ≠ Dev’t Candidate
Simple
Big Real = Interesting
Big Claim = Ignored
Know the Details
Relevant Population, Unmet Need
vs. Standard of Care, Competition,
Acquisition Potential, Pricing . . .
People Matter A Lot
Good VCs are unbiased but
will scrutinize you quickly
Team > Founder
Recruit to your
weaknesses
How is it
Measured?
What is it?
How is it
Demonstrated?
Product / Market Fit
M Andreessen, a16z
Innovation Diffusion
G Moore, MDV
Unique Selling Proposition
Shark Tank
Competitive Advantage
M Porter
NB: also Andy Rachleff and Everett Rogers
Differentiation Depends on the Customer
Academia
Patients
Providers
KOLs
Biotech
Payers
Investors
Pharma’s
Regulators
Differentiation Depends on the Customer
MDs Care About Outcomes & Novelty
Efficacy
55%
MOA Novelty
Providers
37%
Workflow
Impact
Safety
24%
15%
In future, add
Ease of Use
12%
Total Cost of Care
to your TPP
Source: Kesselheim and Avorn, Nature Reviews Drug Discovery (June 2013)
Differentiation Depends on the Customer
Academia
Patients
Providers
KOLs
Biotech
Payers
Investors
Pharma’s
Regulators
Differentiation Depends on the Customer
VCs Care About Your Company
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Purpose
People
Platform Technology
Proof-of-Concept
Product Pipeline
Plan
Processes & Culture
Partners
Investors
Uniqueness
(Durable Scarcity)
Differentiation Drives Your
Company’s Competitive Advantage
Breakthrough
Innovation
Core
Competence
New Feature
First Mover
Value
(Beneficial & Usable)
Uniqueness
(Durable Scarcity)
Differentiation is More than Technology
Illustrative Biotech Examples
Rockstar
Discovery Team
& Platform
Discovery &
Development
“Engine”
1st Time
Founder &
Novel MOA
First-in-Class
Candidate w/
Positive Pre-IND
Value
(Beneficial & Usable)
Uniqueness
(Durable Scarcity)
Remember, It’s All About Potential
Idea Today, Engine Tomorrow?
Discovery &
Development
“Engine”
1st Time
Founder &
Novel MOA
Value
(Beneficial & Usable)
Let’s Learn From Others’ Success:
NewCo Yesterday, Engine Today!
At Inception
• Cool HTS vaccine
discovery platform
• 1st time founders
• Seed investors
• Very high risk
academic platform
• Rockstar team
• Patient VCs
• Huge vision around
fundamental new
biology!
• Great founders
• Strong investors
• Super clever
chemistry platform
• Experienced team
• High clinical need
• First-in-class oral
for RSV in Ph2 plus
early pipeline
• $1.75 billion acq by
J&J, Nov 2014
• “Engine” with
multiple programs
• Outstanding team
• Strong investor
excitement
• $22m Series A
closed Jan 2015
with strong VCs
Today
• $300m Mkt Cap
(Nasdaq: GNCA)
• 2 clinical + 4 preclinical programs
Illustrative NewCo With Engine Potential
Purpose
• Visionary focus on a major R&D or clinical opportunity
People
• Expert academic, translation and development founders
• Powerhouse advisors, consultants, and Board
Platform
• Unique insights, assays, compositions, IP from multiple labs
• Publications in top journals
Proof
• Relevant data in gold standard models
• Third-party replication
Pipeline
• 1-2 well articulated drug concepts
• Potential for multiple follow-on programs
Plan
• Major business, tech, product risks addressed head-on
• Multiple interim go/no-go milestones
Processes
• Strong team spirit, respect, communication
• Team and investors aligned on milestones
Partners
• High potential for partnerships within 1-3 yrs
Illustrative NewCo With Engine Potential
Purpose
• Visionary focus on a major R&D or clinical opportunity
People
• Expert academic, translation and development founders
• Powerhouse advisors, consultants, and Board
Platform
• Unique insights, assays, compositions, IP from multiple labs
• Publications in top journals
Proof
• Relevant data in gold standard models
• Third-party replication
Pipeline
• 1-2 well articulated drug concepts
• Potential for multiple follow-on programs
Plan
• Major business, tech, product risks addressed head-on
• Multiple interim go/no-go milestones
Processes
• Strong team spirit, respect, communication
• Team and investors aligned on milestones
Partners
• High potential for partnerships within 1-3 yrs
+ $0.02
Purpose
Go BIG! or I will go home
People
Be humble and self-aware; build a team
Platform
Awesome platforms based on 10+ yrs work
Proof
Test against best-in-class positive controls
Pipeline
Engage MDs and skeptics early
Plan
Fastest path to lowest risk
Processes
Culture drives performance
Partners
Partners should need you, not other way
Many Good Resources
Thank you!
[email protected]
Questions?