Ventac's China Business_4-22-15a LinkedIn

Ventac Partners

VC Investment & Strategic Partnerships in China

Carlos N Velez, Ph.D.

Partner

Ventac Partners – New York

[email protected]

+1 (845) 380 9496

Jonathan Myers, BSc., MBA

Partner

Ventac Partners – Shanghai

[email protected]

+86 13601989842

+1 (415) 202-3211

2

Table of Contents

• China – A Tremendous Opportunity- Market Overview- Cross Border Transactions

• About Ventac Partners- Global Business- Portfolio Companies - China Business

• The Ventac Team

• Ventac’s Track Record – Life Science Transactions

• Ventac’s China Venture Capital Relationships

• Summary - Why China? Why Ventac?

• Appendix- Examples of Cross-Border Transactions- Shanghai Partner Bio- Global Partners

33

China - Tremendous Opportunity

• Life Science in China is Booming –– China’s life science industry has been

growing at more than 20%+ per year and is expected to continue growing at that rate in the foreseeable future

– Massive government incentives

– Large pool of returnees that have come back to China to start new businesses

• Cross Border Deal Activity is Strong -– More than 85% of all partnerships in China

over the last several years

– Flow of technology primarily into China

– $1.8B in partnering deals in 2014

– 31% preclinical => significant early stage

– Licensing deals: 58%, Co-development: 23%

– Deal terms improving rapidly

• China VCs – Investing in Western Cos.– VC investment surpassed $1.6B in 2014

– Cross border investment is happening

4

China – Massive Government Support

• Chinese government committed $125 billion for health care reforms:• Expanding insurance coverage

• Improving healthcare systems

• Promoting universal coverage

• The 12th Five Year Plan (‘11-’15) dedicated 33% of total budget to healthcare spending

• Traditional Chinese Medicine products outnumber NCEs by ~3:1

• Recognized need to shift away from TCM to more modern, effective treatments

• Recognized need to tackle certain disease areas, such as infectious disease (both bacterial and viral), in order to promote general welfare

5

China – Wide Range of Cross Border Deals

• Venture Capital Investment

• Corporate Investment

• Rx, Dx, Med. Devices, Formulation

• Improving Deal Terms as Competition Increases

• In-bound

• Out-bound

• Research Institute – Discovery Platform Co.

• Research Institute – CRO

• Chinese Co. – US University

• Chinese Co. – US JV with University

InvestmentInvestment

Licensing &

Partnering

Licensing &

Partnering

M&AM&A

Drug

Discovery

Drug

Discovery

University

Tech-Trans.

University

Tech-Trans.

Please see the appendix for specific examples.

66

About Ventac Partners

• Global consulting and transaction company

• Dedicated to life science

• Headquartered in Copenhagen, Denmark

• Grow our own portfolio of startups

• 21 partners in N. America, Europe and Asia

• Entered China via merger with Nine Bridges Capital

• Experts in Life Science corporate/business

development

77

21 Partners and 14 Offices on 3 Continents

LundCopenhagen

BaselMadrid

Hong Kong

Boulder Boston

Munich

Helsinki

ViennaDüsseldorf

ShanghaiNew York

San Francisco(2016)

London

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Ventac’s Global Business

Strategic Partnerships – Buy and Sell Side- Pharma, SMEs, Tech-Transfer- All subsectors of Life Science- Licensing, JVs, M&A, virtually all deal structures

Venture Capital Fundraising- Rx, Dx, Medical Devices, Healthcare IT- All subsectors of Life Science

Ventac Portfolio Companies- Europe, Asia

Market Research- Analysis of therapeutic/diagnostic/medtech areas in

various territories- Mapping of companies/products- Market opportunity assessments

BD&L Training Workshops- Life Science Executives- University Post-graduates / Post-Docs / Tech Transfer

8

9

Ventac Portfolio Companies

• Spin out from Norwegian UST & Oslo University

• Focus on chronic inflammatory disorders. Currently in

Phase II for psoriasis. Preclinical development programs

in glomerulonephritis and rheumatoid arthritis

• Partnering discussions ongoing

• Developing third generation steroidal small molecules

for cancer

• Currently in advanced Preclinical testing

• Currently seeking investors and partners

• Spin out from Guangzhou Institute of Biomedicine

and Health (GIBH)

• Developing drugs to treat diabetes

• Currently seeking investors and partners

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• Spin-out from the Biomedical Centre (BMC) at Lund University,

Sweden

• Developing a tolerogenic vaccine – a unique treatment concept

for inducing immune tolerance.

• Currently in pre-clinical development

• Listing on stock exchange in Sweden in June 2015

• Spin-out from the Norwegian University of Science and

Technology, Norway, dedicated to develop novel anti-cancer

agents targeting DNA repair and cell cycle control

• Currently in late pre-clinical development

• Recently completed series B financing round

• Spin-out from AMC, Holland, developing novel treatments for

immune mediated and neurogenerative disorders

• Currently in late pre-clinical development

• Recently completed series B financing round

1111


• Spin-out from the Cancer Research Foundation in

Denmark

• Currently in late pre-clinical development with a

therapeutic vaccine against NSCLC

• Planning listing on stock exchange in Sweden in

November 2015

• Spin-out from the Hellenic Pasteur Institute,

Greece.

• Currently in pre-clinical development with an

antibody against extracellular hsp90 target

• Looking for Series A funding

12

Ventac’s China Business

Strategic Partnerships – Buy and Sell Side- Pharma, SMEs, Tech-Transfer- All subsectors of Life Science- Licensing, JVs, M&A, virtually all deal structures

Venture Capital Fundraising- Rx, Dx, Medical Devices, Healthcare IT- All subsectors of Life Science

Ventac Portfolio Companies- CASiGEN, Hong Kong- Shanghai TBD

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Ventac’s China Team

• Ventac Partners currently has 21 partners and 14 offices across North America, Europe, and Asia (Shanghai, Hong Kong)

• All with previous industry experience in strategy and operations, executive and non executive management, and/or extensive fund raising, business development and deal making track records

• Partners brought into a project as needed, including potentially a full turn-around or M&A team, enabling Ventac to efficiently scale up or down as needed

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Confidential US

Medical Devices Co.

Ventac has been retained

in China to raise a Series

A round for a US based

medical device company

in the orthopedics space.

Confidential Chinese

Drug Dev. Co.


to negotiate several

licensing agreements for

a Chinese drug

development company in

CNS.

Confidential Japanese

Drug Dev. Co.


to find licensing partners

in China for a Japanese

drug development

company and has

received a term sheet.

CasiGen, a Ventac

Portfolio Company (Hong

Kong), licensed several

diabetes compounds

from the Guangzhou

Institute of Biomedicine

and Health (GIBH).

Confidential Korean

Drug Dev. Co.

Out-licensing of multiple

assets from Korean client

in oncology, diabetes,

osteoporosis, CVD. Two

term sheet discussions

underway,

Confidential Indian

Drug Dev. Co.

Indian manufacturer of

Rx and OTC products

seeking US partners. One

MOU signed, and product

development underway.

bioXell SpA (Italy) raises

€17m B Round, €23m C

round and €10.5m in

Private Financing. bioXell

focuses on urological,

CNS, and AI drug

development.

Global Track Record

Cellerix (Spain) (now

TiGenix NV, Belgium)

Raises a €27.2m B round

and €27m C round.

Cellerix has a clinical

stage pipeline in

inflammatory and AI.

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Genetrix SL (Spain) sells

group company Imbiosis

SL (gluten analysis

reagents and service) to

R-Biopharm AG

(Germany).

PTI (USA) out-licenses

several pain compounds

to King Pharmaceuticals

for $400M, including

$150M upfront, $150M

in milestones and $100M

in R&D reimbursement.

Evolva SA (Switzerland)

CHF 21.5M A round,

CHF 12M A round (2nd

closing),

CHF 44M B round

CHF 5M investment into

Evolva’s Indian sub.

Novartis Research

Foundation (Switz.) - First

right of refusal to $35M

annual funding and spin-

out of FMI. 5 licenses to

enabling technology to

top-tier pharmas.

Primex Pharmaceuticals

(Finland) – Raises a €4M

A round in coordination

with Midas equities in

2014.

2014 Merger between

GIN Oy, Finland and

Sigolis AB, Sweden

forming Ginolis Oy, a

company focusing on

Point of Care disposables

and automation

2014 acquisition of JOT

Automation Life science

business by Ginolis Oy,

Finland.

Global Track Record

The Norwegian

University of Science and

Technology out-license

therapeutic technology

platform for treatment of

respiratory diseases to

Algipharma AS in 2006

16

APIM Therapeutics

(Norway) acquired key

cancer technology from

NTNU in 2009. Raises

Seed, Series A and Series

B financing (undisclosed).

In 2008, LEN out-licenses

broad host vector

technology for research

and commercial use to

Sigma Aldrich Co. and

spin out Vectron

Biosolutions AS ,Norway.

In 2012, the Norwegian

University of Science and

Technology concludes

second license with

Algipharma AS within

animal health.

Etexx Biopharmaceutials

Inc. (USA) in-licenses in

2004 bioinformatics

platform for drug

repurposing from UT

Southwestern Medical

Center. Financial terms

undisclosed

In 2011, Regenesance BV,

Netherlands, (Ventac

portfolio) in-licenses

therapeutic platform

from Academic Medical

Center, Amsterdam for

neurodegenerative

disorders

Avexxin AS, Norway

(Ventac portfolio

company) raises Seed,

Series A, Series B and

Series C funding 2010-

2014.

`

2014, Idogen, Sweden

raises Series A financing

and prepares for listing

on Swedish Stock

Exchange

Global Track Record

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China VC Relationships

• We maintain an active database of 100+ life science investor relationships

• These firms are on our “First To Call” List

• Other investors include:– W.I. Harper

– Mingly China Growth Fund

– DFJ Dragon Fund

– Mustang Ventures

– Mitsui Global Investment

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Why China? Why Ventac?

• The Time for China is Now

– Market is growing, deal terms are improving and China is hungry for good Western technology

• China is Not Without Risk

– IP theft, unethical business practices, poor manufacturing, corrupt regulatory/certification processes and fluid rule of laware typical problems

– Ventac will guide you to work with the best people and companies

• Ventac Can Help Your Company With Virtually All Cross Border Transactions in China Life Science

– Experience with just about any deal structure you can imagine, including VC funding, licensing, joint ventures, M&A, divestitures tech-transfer agreements, strategic partnerships and so on

Strong China

Demand

Strong China

Demand

China Is

Complex

China Is

Complex

Ventac

Knows China

Ventac

Knows China

19

Ventac Partners

Please Contact Us

Carlos N Velez, Ph.D.

Partner

Ventac Partners – New York

[email protected]

+1 (845) 380 9496


Partner

Ventac Partners – Shanghai

[email protected]

+86 13601989842

+1 (415) 202-3211

20

Appendix

21

Examples of Cross-Border Transactions

• Cross Border Financings:– Case 1 – VC Investment:

– Investor: Lilly Asia Ventures

– Portfolio Company: Crown Biosciences

– Deal Summary: Crown Bioscience closed a $26.6 million Series D funding round led by Lilly Asia Ventures Fund II. CrownBio is a preclinical CRO, specializing in oncology and metabolic disorders, headquartered in California with labs in Beijing, Taicang (China), the UK and North Carolina. CrownBio said it would use the money to expand its platform technologies and make acquisitions. (May, 2014)

– Case 2 – VC Investment:

– Investor: BVCF

– Portfolio Company: MicuRx Pharmaceuticals

– Deal Summary: MicuRx Pharmaceuticals, a San Francisco-Shanghai antibiotics company, raised $25 million in Series B financing (see story). The round was led by BVCF (formerly BioVeda) and joined by previous investors Morningside Group and Devon Park Bioventures. The proceeds will be used to fund the US-China development of MRX-I, which has completed a Phase I clinical trial in China. MRX-1 is a novel oral oxazolidinoneantibiotic that targets drug-resistant infections. (August, 2013)

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• Cross Border Licensing Deals– Case 1 – Drug Development:

– Licensee: Zhejiang Hisun, China

– Licensor: Celsion, USA

– Deal Summary: Zhejiang Hisun licensed Thermadox, a liposomal formulation of doxorubicin for primary liver cancer. Terms included: $5M Option Payment Upfront, $5M Payment after exercising the Option, $25M License upfront (net $15M after deducting option payments), $55M in R&D Milestones, $45M in Sales Milestones, Tiered double digit royalties. (January, 2013)

– Case 2 – Drug Formulation:

– Licensee: Sihuan Pharma, Hong Kong

– Licensor: to-BBB, Netherlands

– Deal Summary: Sihuan to perform feasibility studies on certain of Sihuan’s existing drugs in to-BBB’s G-Technology® delivery system . If successful, the tests will lead to a collaborative effort to develop one or more compounds. The G-Technology® - delivery system allows drugs to cross the blood-brain barrier and, at the same time, facilitates sustained release of the active ingredients. (December, 2013)


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• Cross Border Discovery Collaborations:– Case 1 - Research Institute-CRO:

– Partner 1: Shanghai Institute of Materia Medica (SIMM), China

– Partner 2: Crown Bioscience, USA

– Deal Summary: As a first step, the two entities will build the world’s largest mouse clinical trial center by combining their collections of patient-derived xenograft (PDX) models. Then, using Crown’s oncology discovery and translational capabilities, the center will accelerate development of SIMM’s oncology drug candidates. Crown is a US-headquartered CRO with its lab operations in China. (November 2013)

– Case 2 – Research Institute-Drug Discovery Company:

– Partner 1: iHuman Institute at ShanghaiTech University, China

– Partner 2: RuiYi, US/China

– Deal Summary: RuiYi, a San Diego-Shanghai innovative drug discovery company, formed a research collaboration with iHuman Institute at ShanghaiTech University (see story). The collaboration will use RuiYi's iCAPS technology to create novel monoclonal antibodies. Ray Stevens, PhD, a structural biologist at San Diego’s Scripps Institute, is the Founding Director of the iHuman Institute and the Scientific Founder of RuiYi. In addition, RuiYi announced that it closed a $4 million debt financing from Silicon Valley Bank. (June, 2014)


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• Cross Border Mergers & Acquisitions:– Case 1 - Clinical CRO acquires preclinical CRO:

– Acquirer: Tigermed, China

– Target: Frontage Labs, USA/China

– Deal Summary: Hangzhou Tigermed Consulting (SHE: 300347), a China clinical-stage CRO, will add pre-clinical capability to its service offerings by paying $50.2 million to acquire a 70% stake in Frontage Labs, headquartered in Pennsylvania. Frontage Labs provides both pre-clinical and clinical CRO services through its facilities in Pennsylvania and the Zhangjiang Hi-Tech Park in Shanghai. Tigermed said Frontage would continue to operate independently, with its current management team, led by CEO Dr. Song Li, remaining intact. (May 2014)

– Case 2 – Medical Devices Acquisitions:

– Acquirer: Shanghai Fosun, China

– Targets: Several Israeli Medical Devices Companies

– Deal Summary: Shanghai Fosun Pharma (SHE: 600196; HK: 02196) is planning to acquire a number of Israeli medical device companies, and has already begun due diligence on several, according to the company’s CEO, Fang Yao. The news comes one year after Fosun paid $240 million to acquire Alma Lasers, an Israeli company that makes high-end wrinkle-smoothing devices. Fosun may incorporate all of its acquired Israeli operations under Alma, said Yao. (June, 2014)


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• Cross Border University Collaborations:– Case 1 - China-USA University Collaboration:

– Company: HD Biosciences, China

– University: Marshall University, USA

– Deal Summary: HD Biosciences, a Shanghai drug development CRO, will partner with Marshall University of West Virginia to develop innovative treatments for cancer. The partners will share the costs of discovery and development of the drugs, and they will also own IP and commercialization rights jointly. The Marshall Institute for Interdisciplinary Research (MIIR) and the Marshall University Joan C. Edwards School of Medicine will be HD Biosciences’ partners. (July 2014)

– Case 2 – JV in US to Develop University Technologies:

– Companies: Gloria Pharma, China, Cumberland Pharma, USA

– University: Vanderbilt University, USA

– Deal Summary: Harbin Gloria Pharma (SHE: 002437), a China injectable drugmaker, has joined Cumberland Pharma (NSDQ: CPIX) of Tennessee in Cumberland Emerging Technologies, a translational R&D effort. Both companies have made $1 million investments in CET, though Cumberland remains the majority owner. Gloria will have the right of first refusal on China rights to CET’s product candidates, which are discovered at Vanderbilt University in Nashville and other regional research centers. (May, 2014)


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Ventac Partner Bio - Shanghai


• Jonathan, who has lived and worked on four continents, has 17+ years experience in VC fundraising as well as phases of pharma/biotechtransactions, from initial screening to due diligence to valuation, negotiation and closing. This experience includes practically all deal structures, including in-licensing, out-licensing, joint ventures, and mergers & acquisitions.

• Prior to Ventac Partners, Jonathan was Founder and Managing Director of Nine Bridges Capital, a Shanghai based life science financial advisory and business development consulting firm. Jonathan has also worked in various business development and corporate finance roles pharma/biotech industry in the San Francisco Bay Area and in Basel, Switzerland for companies including Pain Therapeutics, Onyx Pharmaceuticals Chiron Corporation and Roche. Jonathan worked on over 50 deals during his time in the Bay Area and accomplishments of note include the completion of a $400M out-licensing deal as well as various in-licensing deals, drug formulation deals, manufacturing deals and option agreements. Jonathan began his pharma/biotech career in a hybrid corporate finance/business development role, building valuation models in support of deal negotiation and running the due diligence process for many deals at Chiron Corporation.

• Prior to receiving his MBA from the Rotterdam School of Management, Erasmus University, Jonathan was a chemical process engineer with Nobel Industries (Akzo Nobel), in Sweden, Chile and the United States, having received is BSc degree in chemical engineering from Michigan State University.

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Ventac’s International PartnersMikaelØrum Martin

Austin

DedeWillis

MelyaHughes

AartiKapoor

KostasAlevizopoulos

BengtWestrin

MirkoStrange

LarsHedbys

PeterDamsbo

Rolf Ehrnstrom

StephenLee

SeppoMakinen

Scott Woodward

Neil Thomas

DennisHenriksen

MartinGoetting

JonathanMyers

CarlosVelez

HenrikStage

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