Post on 21-Dec-2015
What areBiotech VCs Looking For?
Vikas Goyal, SR OneVikas.2.Goyal@srone.com
Yale Biotech BootcampMay 2015
A VC Perspective
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
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
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
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
Why We Really Rejected Them
Code for Investor FitEach partner at each firm has a preferred stage
Be HonestAnalogue ≠ Lead ≠ Dev’t Candidate
SimpleBig Real = InterestingBig Claim = Ignored
Know the DetailsRelevant Population, Unmet Need vs. Standard of Care, Competition, Acquisition Potential, Pricing . . .
People Matter A LotGood VCs are unbiased but will scrutinize you quickly
Team > FounderRecruit to your weaknesses
What is it?
How is it Measured?
How is it Demonstrated?
Product / Market FitM Andreessen, a16z
Unique Selling PropositionShark Tank
Innovation DiffusionG Moore, MDV
Competitive AdvantageM Porter
NB: also Andy Rachleff and Everett Rogers
Differentiation Depends on the Customer
KOLs
Investors
Pharma’s
Academia
Regulators
Payers
Providers
Patients
Biotech
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
Differentiation Depends on the Customer
KOLs
Investors
Pharma’s
Academia
Regulators
Payers
Providers
Patients
Biotech
Investors
• Purpose• People• Platform Technology• Proof-of-Concept• Product Pipeline• Plan• Processes & Culture• Partners
Differentiation Depends on the CustomerVCs Care About Your Company
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
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
)
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
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
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
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
+ $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
Many Good Resources
Thank you!vikas.2.goyal@srone.com
Questions?