Transcript Test of New Master - Institute for Innovation in Biotechnology

Four years on …. lessons learned
September 2011
What were the initial aims of the MRCF?
• Established in 2007 to provide early-stage funding for Member Institutes
• Established as a collaboration between the Institutes and Investors
• A flexible investment structure
• An initiative that increases the commercialisation capabilities for each Member – in a
sustainable way
• Provide training and capability sharing through IRC process and Internship
• Bridge the “valley of death” funding gap from basic R&D through
translational/development funding into funding clinical evaluation (Phase I & II)
• Provide a return to the Superannuation Fund investors
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MRCF key features
• All risk capital from private investors ($30M) and, more recently, the
Federal Government ($20M)
• Operational costs comes from:
o Investors,
o 4 State Governments, and
o The participating Institutes ($35K per Institute per year)
• Fund can invest up to $4 million in each opportunity
– Investors have follow-on and co-investment rights
• Fund has ‘first right of review’ of technologies where an Institute is
seeking investment financing for a technology, but not a first right to
invest
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Membership is now 29, national and growing…
Victoria (11)
Alfred Health (Alfred Hospital)
Baker IDI
Burnet Institute (Austin)
Centre for Eye Research Aus
Deakin Institute of Biotech
Florey Institute Neurosciences
Melbourne Health
Murdoch Children’s Research Inst
Peter MacCallum Research Institute
St Vincent’s Institute
Walter and Eliza Hall Institute
NSW (8)
Centenary Institute
Garvan Institute
Heart Research Institute
Hunter Medical Res Institute
New England Area Health
The George Institute
The Victor Chang Cardiac
Research Institute
Woolcock Institute
Being relaced by i3 (UTS) in
2011/12
Illawarra Health
WAIMR
WA Department of Health
AIBN
Centre Clinical Research
Diamantina
Institute Molecular Bioscience
Mater Medical Research Institute
QIMR
WA (3)
Telethon Inst Children’s HR
QLD (7)
QLD Department of Health
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A structured and consistent review process
Member Institute
1
Member Institute
2
Member Institute
3
Member Institute
……29
Member Institutes identify opportunities
within their institute and bring them forward
to the investment Review committee
Investment
Review
Committee (IRC)
Investment Review Committee is
comprised
of a representative from each
member Institute and the Fund
Manager
Investments
are recommended to the Fund Manager
Fund Manager completes full due diligence,
approves and recommends to Trustee
Trustee provides final approval, ensuring that the Fund Manager
has completed a comprehensive and consistent review process
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Technologies reviewed and progressed
• 172 Opportunities have been disclosed
• 60 have progressed to the detailed review process
• 11 investments made and 1 now closing
Device/ drug delivery - 15
Therapeutic - 31
Diagnostic - 6
Other - 8
Current Investments
The 11 investments in the portfolio are:
• BACE Therapeutics - developing novel drug candidates for the treatment of Alzheimer’s Disease
• Fibrotech Therapeutics - developing novel drug candidates for the treatment of tissue fibrosis
prevalent in a range of chronic conditions.
• Fluorotrop - developing a novel assay for determination of HIV co-receptor usage (tropism)
• Global Kinetics Corporation - developing a ”wrist watch” data logging device to record success
of therapeutic intervention in Parkinson’s Disease
• MiReven - in vivo proof of concept studies to demonstrate the clinical potential of a defined
micro RNA as a novel anti-cancer agent
• Osprey Medical - developed to avoid the often severe kidney damage that can occur during
coronary interventions
• Global Kinetics – device monitoring therapeutic effectiveness of Parkinsons Disease therapies
• Otifex - developing an intranasal betahistine spray for the treatment of Otitis Media with Effusion
(OME) in children
• Polyactiva - developing an ocular implant for the treatment of glaucoma
• SeeD4 - developing a diagnostics test for use with whole blood to determine the CD4 status of
HIV positive individuals.
• Vaxaas – developing a novel transdermal vaccine patch
• Labour Diagnostic project funding – proof-of-concept for the use of the ratio of two pregnancy
hormones to predict the timing of when a pregnant woman will deliver her baby
MRCF Commitments and Leverage
Investee
Institute
MRCF
Committed
Co-investment/
Matching
Leverage
Total
$1M
$3M
$3.2M
$7.2M
Fibrotech
St Vincent’s
Fluorotrop
Alfred
$304,000
SeeD4
Burnet
$377,000
Global Kinetics
Florey
$990,000
$250,000
Osprey Medical
Baker
$1.522M
$10.5M
BACE
Therapeutics
WEHI
$620,000
$100,000
Labour
Diagnostics
Hunter MRI
$275,000
$205,000
$480,000
PolyActiva
CERA
$1M
$1.2M
$2.2M
MiReven
WAIMR
$647,750
Otifex
MCRI
$564,000
$304,000
$2.5M
$2.9M
$1.24M
$1.1M
$13.3M
$720,000
$647,750
$564,000
$1.12M
7
$7.1M
Total
$30.12M
MRCF Board of Directors
Directors
Affiliation
Background
Hon. Alan Stockdale
(Chairman)
Baker
Current National President of the Liberal Party
Director, Senetas Corporation
Director, NSW Treasury Corporation
Former Senior Executive, Macquarie Bank
Former Treasurer of Victoria
Former Barrister
Denise Allen
Burnet
Managing Director, Chelcor Pty Ltd
Director of Av Super and Utilities of Australia
Former Managing Director of Citigroup Asset Management
20+ years in superannuation and investment
Ross King
Garvan
Managing Director, JBWere Goldman Sachs
20+ years investment banking experience
Former senior executive at Anglo American
Wayne McMaster
Florey
Peter Mac
Partner, Mallesons Stephen Jacques
Head, National IP and Life Sciences Practice
Former Managing Partner at Allens Arthur Robinson
Winsome Hall
Investors
Chairman, Zurich Superannuation
Director, State Super Financial Services
Director, Aria Superannuation
Previously, Branch Secretary of large public sector union
Hon. Peter Beattie
QIMR/AIBN
Clemson University and University of Queensland
Previously Commissioner to the Americas
Previously QLD Premier
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MRCF Manager - Brandon Capital Partners
• Dedicated Life Sciences investment fund manager
• Funds under management
- $10 million Medical Research Commercialisation Fund – 2007
- $40 million IIF funding for MRCF awarded Nov 2010
- $50 million Innovation Investment Fund – BBF1 – Jan 2008
• The Brandon Team
- 7 Investment Professionals (Melbourne/Sydney)
- International Venture Partner (US) & Advisor (EU)
- Office Manager and CFO
• Brandon team all have relevant local and international experience
- Scientific (PhD’s) and business (MBA, FINSIA) training
- Operational pharma/biotech management, deep drug development experience, business
development and technology transfer
- Venture investment
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Lessons learned…
• Nearly all early stage opportunities are not investment
ready. They often require:
-A thorough IP review including Freedom to Operate searches
(often by a qualified US attorney) – needs budget allocation
- Contact with prospective exit partners (big pharma, med
device companies) to understand what they need to see in a
data package
- Sometimes a refocussing of clinical trial program to a more
manageable format (recruitment issues, length of the trial
program etc)
- Recruit project management expertise
- A realistic budget and timetable
• This can lead to frustration by the Institute. Need to
keep the Institute informed/involved in the process
(Stakeholder management)
The Challenges….
• Access to co-investors is a major issue (capital scarcity
– no new funds being formed)
• 10 year closed end funds not aligned to biotech
investing. New models needed?
• Look at the Californian Institute for Regenerative
Medicine. Can we adapt it?
• Continuing role for Government.
• Long term investing by Government has the potential
to produce significant cost savings to the health care
budget (indirect returns), Government bond issue?
• Capital efficiency is key.