MA Life Sciences Innovation Day

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Dec 6, 2012 (4 years and 11 months ago)

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The State of the Massachusetts Life Science Industry


-

The Year in Review
-

June 2, 2011



MALSI | MA Life Sciences Innovation Day

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MA Life Science Venture Investments

Investment by Sector (2008


present)

(millions of dollars)



39



31



31



32



21



32



30



32



31



35



35



30



24

$

Source: PWC Moneytree; Thomson Reuters


289

226


349

253


246


284


261


342


357


345


200

240

223

medical device

biotechnology

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MA Life Science Venture Investments

Stage of Investment (Q1 2010


present)

(percent of total)

$357 mm

$345 mm

$199 mm

$240 mm

$223 mm

Start Up

Early
Stage

Late
Stage

Source: PWC Moneytree; Thomson Reuters



31



35



35



30



24



No. of financings

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MA Life Science Venture Investments

Early
-
Stage Investments (Q1 2010


present)

$210 mm

$290 mm

$169 mm

$178 mm

$128 mm



19



26


25



21



15



No. of financings


Medical device


Biotechnology

Source: PWC Moneytree, Thomson Reuters

Note:

Includes early
-
stage and seed/start
-
up catregories

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MA Life Science Venture Investments

Select Series A Biopharma Investments

Date

Company

Amount Raised

Description


Jan
-
11


Civitas
Therapeutics


$20 mm


Parkinson’s lead


Based on A.I.R. pulmonary
delivery technology of Alkermes


Nov
-
10


VeraStem


$16 mm


Cancer stem cell focused


May
-
10


Tesaro


$20 mm


Acquires and develops oncology
therapeutics


Former MGI Pharma management team


Apr
-
10


Catabasis
Pharmaceuticals


$40 mm


Type II diabetes focused


Technology from Joslin Diabetes Center


Jul
-
10


Euthymics


$24 mm


acquisition of DOV Pharma
CNS candidate


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Johnston Blakely
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Capital Market Perspectives

US Venture Investments
-

Biotechnology

Oncology

CNS

Anti
-
infective

Other

$3.8 billion

Note: Data for the twelve months ended March 31, 2011

Source: PWC Moneytree; Thomson Reuters; Johnston Blakely research

Investment by indication

(TME 3
-
31
-
11)

(percent of total transactions)

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Number of issues


% life science
issues


23.5%


14.9%


9.7%


8.8%

All Industries

Life Science Issues

Capital Market Perspectives

Annual IPO Activity: 2000


2010

293

74

72

80

69

11

7

7

234

44


18.8%

Source: IPOMonitor, Hoover’s IPO Central, Johnston Blakely & Co

100

200

300

400

2000

2001

2002

2003

2004

196


12.2%

2005

24

195

27


13.8%

2006

210


16.6%

2007

31

31

2008

3


9.7%


6.3%


12.4%

137

17

2010

4

2009

63

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Capital Market Perspectives

Biopharma IPO Activity

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

2000

2004

53

25

Preclinical

Phase I

Phase II

Phase III

NDA filed

37.7%

92.0%

Preclinical

Phase II

Phase III

NDA filed

Percent of total IPOs

Source: SEC filings

Note:

Includes biopharmaceutical and related issues only.


Lead compound in clinical development


% of total life
science IPOs


76.8%


56.8%

100.0%

2007

Phase I

Phase II

Phase III

NDA
filed/approved


48.4%

15

100.0%

2009/10

Phase II

Phase III


73.3%

11

NDA
filed/approved

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Life Science IPO Performance

Aggregate Performance (2000 to 2010)

Percent of Aggregate Value


$2,547

Note:

Represents value of one common share in 245 life science IPOs from 2000 through Dec 31, 2010. Stock transactions involvin
g mergers of equals or
reverse mergers calculated using current share prices.


Cumulative value of
one share/IPO


$2.727

(6.6%)

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2010 Biotechnology IPOs

IPO Pricing vs. Expected Range

IPO price per share

Note: % change from expected range calculated using the midpoint of the expected range.

Source: SEC filings


% PPS priced below
expected PPS


25.0%


50.0%


37.5%


7.1%


44.4%


31.3%


33.3%


36.7%


69.2%


70.6%


7.7%


61.5%

Expected price per share

Realized price per share

Indicates Massachusetts Company

+

+

+

+

+

+


Current PPS vs IPO
PPS

-

-

-

-

-

-

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Number of
announced

transactions

Source: Johnston Blakely & Co. research

56

68

40

53

57

42

40

40

57

50

70

29

Merger & Acquisition Activity

Life Science Sector (Q3 2007


Q4 2010)

67

60

63

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Pre/non clinical %:

51.0%

44.0%

39.0%

32.0%

25.9%

25.7%

27.2%

Percent of total R&D
expenditures

Pharma R&D Expenditures

1989
-

2008 (by function)


Pre/non
clinical


Ph I


III
clinicals


Post
-
approval
studies


Regulatory/other

Source: PhRMA,

Note: Pre/non
-
clinical category includes process development, QC and formulation related expenditures.

32.5%

31.9%

27.3%

27.0%

$29.2 B

$32.4 B

$36.1 B

$37.0 B

$38.7 B

$42.0 B

$43.8 B

$46.2 B

$49.6 B

$47.2 B

Pharmaceutical Innovation

Relative New Therapeutic Contributions (1997


2009)

Percent of annual new drug approval

21

39

49

40

43

38

33

31

41

45

Bio/Specialty Pharma:

Large Pharma:

66.7%

33.3%

74.4%

25.6%

40.8%

59.2%

42.5%

57.5%

51.2%

48.8%

57.9%

42.1%

39.4%

60.6%

48.4%

51.6%

70.7%

29.3%

84.4%

15.6%

Source: PhRMA, BIO, FDA

Large Pharma

Bio/specialty pharma

13

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35

43

35

80.0%

20.0%

76.7%

23.3%

60.0%

40.0%

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14


Productivity in the pharmaceutical industry continues to worsen.


Royalty stacking negatively impacts already reduced profit margins.


Promise of the genomics revolution to date unfulfilled.

The dependence of the pharmaceutical industry on biotechnology
has never been more acute.

R&D Productivity

Current M&A Influences

Pipeline pressures significantly influencing M&A activity.


Patent expirations weigh heavily on top and bottom lines.

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The Financing Divide

Traditional Investment Model

I

N

D

N

D

A

Discovery

Development

Phase I

Phase II

Phase III

Approval

Pre clinical Candidate

Clinical Development

Marketed Product

Go public

Venture funding


traditional investment model

Follow on offerings

Private Institutional Investors

Public Markets

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Johnston Blakely
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Johnston Blakely
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The Financing Divide

Shifting Investment Dynamics

I

N

D

N

D

A

Discovery

Development

Phase I

Phase II

Phase III

Approval

Pre clinical Candidate

Clinical Development

Market

Go public

Venture funding


traditional investment model

Go public

Venture funding


current investment model

Follow on offerings

Private Institutional Investors

Public Markets

Private Institutional Investors

The Financial Abyss

?

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& Company
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& Company
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+

+

The Life Sciences in Massachusetts

Centers of Academic
Excellence

Storied Medical
Institutions

Access to
Investment Capital

Massachusetts Life
Science Industry

All of the Ingredients are Here

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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
& Company
Johnston Blakely
& Company, LLC
Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Johnston Blakely
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Benjamin Conway

978
-
526
-
4014

ben@johnstonblakely.com

The State of the Massachusetts Life Science Industry


-

The Year in Review
-

MALSI | MA Life Sciences Innovation Day