Tag Archives: Atlas Venture

BIO CEO 2015 Conference Preview

By Steve Dickman, CEO, CBT Advisors

Feb. 3, 2015

One conference that is a highlight for me every year is BIO CEO in New York. This year’s edition arrives next Monday Feb. 9, concluding on Tuesday Feb. 10. One of many reasons I like it so much is that so many fund managers attend. That makes for some excellent Q&A and chatter in the hallways of the Waldorf.

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If you can get there, I highly encourage it. If not, read the tweets (hashtag is #BIOCEO15) and other media coverage.

The sessions I am most looking forward to include these:

  • “Emerging Trends in Deal Structures,” Mon. Feb. 9 at 9:30am. Panelists will discuss recent trends in both performance milestones and earnouts as well as swaps between pharmaceutical companies of therapeutic assets. Excellent panelists include:
    • Bruce Booth, Partner, Atlas Venture
    • David H. Donabedian, PhD, Vice President, Head of Ventures & Early Stage Collaborations, AbbVie
    • Randall Mills, PhD, President and CEO, California Institute of Regenerative Medicine (CIRM)
    • Adelene Perkins, CEO, Infinity Pharmaceuticals
    • Mark Schoenebaum, MD, Managing Director, Evercore ISI

It will be especially interesting to hear from Randall Mills, who is ushering CIRM into a hectic phase of clinical trial funding after that state agency’s first few years funding mostly early-stage research. And it is always fun to hear from Mark Schoenebaum. I half-expect him to steal the show…

  • “Getting Ahead of Ebola and Other Infectious Threats—Overturning Assumptions,” Mon. Feb. 9 at 11am. The panel will discuss how companies are trying to bring new vaccines and therapies to market faster, with implications likely for a wide array of diseases. Ebola was on the front page of the New York Times on Sunday with good news, finally: the recent outbreak seems to be ebbing. However, as much as the topic will predictably fade, there will certainly be new outbreaks of Ebola and other emerging diseases and actual strategies from government and industry have been in short supply. I am glad that there is a representative of the Gates Foundation on this panel alongside some biotech luminaries to bring the much-needed non-profit perspective. Panelists:
    • Ripley Ballou, MD, Head of Ebola Vaccine Research, GSK
    • Chris Garabedian, President & CEO, Sarepta Therapeutics
    • Peter Khoury, PhD, Senior Program Officer, Bill & Melinda Gates Foundation
    • Guillaume Leroy, PhD, Head of Dengue Vaccines, Sanofi Pasteur
    • Clifford J. Stocks, CEO, Theraclone Sciences
  • “Digital Health—Early Successes for Investors and Biotech R&D Productivity,” Mon. Feb. 9 at 3pm. This session will feature perspectives from both financial and corporate as well as from experts who have broad exposure to digital health investments. One focus will be how digital health companies are improving R&D productivity for biotechs. I had panelist Julie Papanek on my “apps as drugs” panel at Biotech Showcase (the link will take you to a video of the full panel), which took place in January. There, Julie helped me learn about what VCs are doing (and not doing) in the space. Panelists:
    • Angela Bakker Lee, PhD, Partner, VP Healthcare, Global Business Services, IBM
    • Donald Jones, Chairman, Wireless-Life Sciences Alliance
    • Julie Papanek, Principal, Canaan Partners
    • Ryan Pierce, Entrepreneur in Residence, Rock Health
  • VC Funding Report for biotech. Dave Thomas from BIO Industry Analysis will be unveiling his new biotech VC Funding Report. This first-of-its-kind study looks at where venture financing has been put to work in terms of disease area and novelty of research over the last decade (five years pre and post economic crisis). Results are broken down across fourteen disease areas, including oncology, cardiovascular, neurology, psychiatry and more.

There are also some high-profile hour-long “fireside chats.” For example, on Tuesday morning, Gilead’s John Milligan will be followed by Alnylam’s John Maraganore. I wonder if anyone else remembers that Gilead started out as an antisense therapeutics company! Then on Tuesday afternoon, a chat with Peter Greenleaf from Sucampo will be followed by Ron Cohen of Acorda and then by Ian Read of Pfizer. I will try to attend many of these. Reading the CEOs’ body language and hearing their jokes will help me interpret both company commentary as well as investor sentiment in the months to come.

In between these plenary sessions, there are over a hundred company presentations. I hope to see you there.

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Biogen Idec Lets Stromedix Do the Hard Part

Stromedix’ Exit to Drug’s Source Shows Why We Need VC More Than Ever

by Steve Dickman, CEO, CBT Advisors

February 14, 2012

For anyone wondering about the value that can be added by entrepreneurs and venture capitalists to the drug discovery and development process, look no further than Stromedix. This venture-backed company in Cambridge, MA, was acquired today by Biogen Idec for $75 million up-front and up to $487.5 million based on the achievement of certain development and approval milestones. The driver for the acquisition is a monoclonal antibody known as STX-100, about to enter Phase 2 in the tough indication of idiopathic pulmonary fibrosis (IPF), a nearly always fatal disease characterized by lung scarring. STX-100 is one of several early entrants in the race to apply modern biologic therapies to fibrosis and its challenging biology.

Now let’s consider the value-add. First the return. As of early 2011, Stromedix had raised $29.4 million plus at least an additional $5M in debt financing in September, 2011, most of which has likely not been drawn down. (Stromedix investor Bruce Booth of Atlas Venture states in his blog post that the total cash in, including the debt facility, was $38 million). That makes the up-front price worth about 2X to the Stromedix investment syndicate, which includes NLV Partners, Bessemer Venture Partners, Red Abbey Venture Partners and Frazier Healthcare Ventures as well as Atlas Venture. Considering that most of this capital did not flow in until the 2008 Series B round, that’s not a bad internal rate of return (IRR) for the investors. If STX-100 hits any milestones at all, that return will rise, of course, possibly to an impressive 5X or even, in the unlikely event that all milestones are achieved, 19X. For the venture investors, the combination of certainty of the initial exit and possible upside later – with no more board meetings to attend! – makes this deal a sweet one.

Stromedix logoBut the deal becomes even more impressive – and instructive – when one considers that the asset STX-100, which comprises essentially the full value of Stromedix, was in-licensed from Biogen Idec back in 2007 for a price that I’ve heard was less than $5 million and perhaps even less than $2 million up front. This would fit with the company’s financing history. Before the 2008 $25 million Series B round, less than $5 million had been raised, some of which went to pay salaries, rent and development costs. So not much of this could have paid for the asset. One assumes that Biogen Idec had some milestones and royalties coming to it from the initial licensing deal and that these were negotiated away as part of the sale transaction. But the fact remains: Biogen Idec gave up the asset for a very low price and is buying it back for a much higher one. Why?

Read the rest of my post on Xconomy here or click/copy-paste the link:


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