what are biotech vcs looking for? vikas goyal, sr one [email protected] yale biotech bootcamp...
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What areBiotech VCs Looking For?
Vikas Goyal, SR [email protected]
Yale Biotech BootcampMay 2015
A VC Perspective
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1. VCs Evaluate Your Whole Company
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?
Goyal’s 8 P’s of a Biotech Newco
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2. VCs Want to Say No Quickly
700-1000 Companies Met
400-500 Reviewed
25-40 CDA & Diligence
15-20 Full Partnership
10-15 Full Committee
5-10 Invested
SR One’s Annual Deal Funnel
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Strategy, lifecycle, new dealsIndividual’s interestsWebsites, blogs, and tweets . . .
It’s very easy so please get warm intro (LinkedIn!)
Share useful info without CDA
Strong “hook” is criticalBring your team
Ask for feedback; translate VC speakLimited follow-up means . . .
DebriefLiveEmailIntroFund Fit?
The VC “Pitch” Flow Chart
Make a Strong First Impression3. You Must Differentiate Your NewCo
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3. You Must Differentiate Your NewCo
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™
Avoid Common Reasons For Rejection
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Why We Really Rejected Them
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Code for Investor FitEach partner at each firm has a preferred stage
Be HonestAnalogue ≠ Lead ≠ Dev’t Candidate
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SimpleBig Real = InterestingBig Claim = Ignored
Know the DetailsRelevant Population, Unmet Need vs. Standard of Care, Competition, Acquisition Potential, Pricing . . .
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People Matter A LotGood VCs are unbiased but will scrutinize you quickly
Team > FounderRecruit to your weaknesses
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What is it?
How is it Measured?
How is it Demonstrated?
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Product / Market FitM Andreessen, a16z
Unique Selling PropositionShark Tank
Innovation DiffusionG Moore, MDV
Competitive AdvantageM Porter
NB: also Andy Rachleff and Everett Rogers
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Differentiation Depends on the Customer
KOLs
Investors
Pharma’s
Academia
Regulators
Payers
Providers
Patients
Biotech
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Differentiation Depends on the Customer
Providers
Efficacy
MOA Novelty
Workflow Impact
Safety
Ease of Use
55%
37%
24%
15%
12%In future, add
Total Cost of Careto your TPP
Source: Kesselheim and Avorn, Nature Reviews Drug Discovery (June 2013)
MDs Care About Outcomes & Novelty
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Differentiation Depends on the Customer
KOLs
Investors
Pharma’s
Academia
Regulators
Payers
Providers
Patients
Biotech
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Investors
• Purpose• People• Platform Technology• Proof-of-Concept• Product Pipeline• Plan• Processes & Culture• Partners
Differentiation Depends on the CustomerVCs Care About Your Company
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Differentiation Drives Your Company’s Competitive Advantage
Value(Beneficial & Usable)
Uni
quen
ess
(Dur
able
Sca
rcity
)
New Feature
Breakthrough Innovation
First Mover
Core Competence
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Differentiation is More than TechnologyIllustrative Biotech Examples
1st Time Founder & Novel MOA
Rockstar Discovery Team
& Platform
First-in-Class Candidate w/
Positive Pre-IND
Discovery & Development
“Engine”
Value(Beneficial & Usable)
Uni
quen
ess
(Dur
able
Sca
rcity
)
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Remember, It’s All About PotentialIdea Today, Engine Tomorrow?
Discovery & Development
“Engine”
Value(Beneficial & Usable)
Uni
quen
ess
(Dur
able
Sca
rcity
)
1st Time Founder & Novel MOA
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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
• $300m Mkt Cap (Nasdaq: GNCA)
• 2 clinical + 4 pre-clinical programs
• 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
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Illustrative NewCo With Engine Potential• Visionary focus on a major R&D or clinical opportunityPurpose
Platform
Pipeline
Processes
People
Proof
Plan
• Expert academic, translation and development founders• Powerhouse advisors, consultants, and Board• Unique insights, assays, compositions, IP from multiple
labs• Publications in top journals• Relevant data in gold standard models• Third-party replication
• 1-2 well articulated drug concepts• Potential for multiple follow-on programs
• Major business, tech, product risks addressed head-on• Multiple interim go/no-go milestones
• Strong team spirit, respect, communication• Team and investors aligned on milestones
Partners • High potential for partnerships within 1-3 yrs
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Illustrative NewCo With Engine Potential• Visionary focus on a major R&D or clinical opportunityPurpose
Platform
Pipeline
Processes
People
Proof
Plan
• Expert academic, translation and development founders• Powerhouse advisors, consultants, and Board• Unique insights, assays, compositions, IP from multiple
labs• Publications in top journals• Relevant data in gold standard models• Third-party replication
• 1-2 well articulated drug concepts• Potential for multiple follow-on programs
• Major business, tech, product risks addressed head-on• Multiple interim go/no-go milestones
• Strong team spirit, respect, communication• Team and investors aligned on milestones
Partners • High potential for partnerships within 1-3 yrs
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+ $0.02
Go BIG! or I will go homePurpose
Platform
Pipeline
Processes
People
Proof
Plan
Be humble and self-aware; build a team
Awesome platforms based on 10+ yrs work
Test against best-in-class positive controls
Engage MDs and skeptics early
Fastest path to lowest risk
Culture drives performance
Partners Partners should need you, not other way
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Many Good Resources