Venture Capital Panelist Presentation Slides - Chbmr.com

Christine Sarkisian 

Trade Commissioner, Life Sciences Business Development 

Consulate General of Boston 

September 23, 2010 

Charlottetown, Prince Edward Island

Why New England? 

• Maine 

• New Hampshire 

• Vermont 

• Massachusetts 

• Rhode Island

The New England Economy 

• Thrives on innovation 

• Largest concentration of biotechnology 

companies in the world 

• Clean Tech, Health Care Information 

Technology and MedTech sectors 

• Marine Technology sector

Boston Ranked #1 Innovative City of 

2010 

Boston beat out Paris, New York, and San 

Francisco as the most innovative city in the 

world. This 2010 report credits Boston’s 

human infrastructure and competitive 

markets as some of the many factors behind 

the city’s innovative economy. 

Innovation Cities Global Index 2010 

Australian consulting innovation analysts, 2thinknow

The Consulate’s 

Priority Sectors in New England 

• Life Sciences 

• Ocean Technologies 

• Aquaculture, Fish and Seafood 

• Agriculture, Food and Beverages 

• Aerospace /Defence & Security 

• Infrastructure/Global value chains 

• CleanTech/Green Technologies 

• ICT 

• Innovation and Investment

Our Key Services 

1. Preparing for International Markets 

(Regional Office) 

2. Market Potential Assessment 

3. Qualified Contacts 

4. Problem Solving 

• We will contact you within 5 working days of 

receiving your inquiry. 

• We treat all requests confidentially.

Virtual Trade Commissioner 

Powerful, interactive online tool for 

Canadian exporters. 

www.tradecommissioner.gc.ca

Opportunities in New England 

• Partnering 

• Investment 

• Innovation-Science & Technology 

• Market Development

Opportunities 

• Agriculture, Food and Beverage 

– U.S. Northeast Food Technology Exchange 

(FTX): Boston, New York, Agriculture & Agri- 

Food Canada 

• Canadian ingredient and technology companies 

• Creating alliances, R&D sessions with 10 U.S. 

companies and institutions 

– Health and Wellness Arena 

• Organic, Sustainable

Opportunities 

• Clean-Tech/ Green Technologies 

– Energy efficiency, smart grid 

– Wind, solar, ocean, biomass energies and 

technologies 

– Green building products 

• ICT 

– E-health products, digital gaming, wireless/telecom 

– Enabling Technology, eg. Photonics 

• Aerospace /Defence & Security 

– Security and defense products

Opportunities 

• Ocean Technologies 

– Ocean Observing Technologies 

– Underwater vehicles 

– Aquaculture equipment and technologies 

• Aquaculture, Fish and Seafood 

– High End 

– Sustainable

• Life Sciences 

– R&D Partnering in drug development and 

diagnostics 

– In-licensing and out-licensing of therapeutic and 

diagnostic technologies 

– Funding sources 

Opportunities 

– Technology Partnering Missions 

– Good conferences to present your technology- 

MassBio, MedTech Investor Conference

Life Sciences Connections 

• 500 biotechnology companies 

• Big Pharma & Big Bio: Merck, Novartis, Pfizer, Astra- 

Zeneca, Genzyme, Amgen, Biogen, Sanofi, GSK 

• NIH-funded universities, teaching hospitals and 

research institutions 

• 475 medical device companies include: Boston 

Scientific, J&J, Covidien 

• Angels, Venture Capital firms, funds, venture debt 

finance companies

•Technology transfer 

•Licensing agreements 

•Joint venture development 

•Investment in Canada 

•Research and development 

(R&D) partnerships 

We can facilitate: 

• Foreign-market access 

• Trade, Investment and 

Innovation leads 

• Exports 

• Business contacts 

• Events

Our Team 

Consul General Pat Binns 

Maurice Egan, Sr. Trade Commissioner 

Jamie Huget Christian Denter 

Erin Daily Christine Carr 

Colette Lekborg Christine Sarkisian 

Martin Robichaud Shelley St. George 

Sherrie MacDonald Alaine Behler

CONTACT US 

Consulate General of Canada 

Three Copley Place, Suite 400 

Boston, MA 02116 USA 

T: 617-247-5100 

F: 617-247-5190 

boston.commerce@international.gc.ca

Dr. Peter Farina 

Canaan Partners

Canaan Partners Healthcare 

Partners for Growth

OVERVIEW 

About Canaan Partners 

» 23 year old global firm with offices in 

Silicon Valley | New York Corridor | India | Israel 

» $3 Billion assets under management 

across 8 funds 

» Technology + Healthcare focused 

» Early-stage investments (Series A/B) 

» 129 successful exits 

» 184 years investing experience 

» 162 years operating experience 

» 4 former CEOs 

» 3 MDs/2 PhDs 

© Copyright 2010 Canaan Partners 19

Areas of Therapeutic Interest 

Current 

» Anti-infectives 

» Oncology/Hematology 

» Respiratory 

» Immunologic and Inflammatory Diseases 

Emerging 

» Chronic diseases of aging 

(e.g. ophthalmology, bladder, CNS) 

» Rare Diseases 

» Asian/Third World Diseases 


Areas of Interest 

» Biologics & Small Molecules 

» Prophylactic & Therapeutic vaccines 

» Nanotechnology 

» Inhaled Delivery 

» Topical Delivery 

» Local Delivery 


Desired Features of an Asset 

» Some human data with API 

» Some human validation of target 

» Established, easily measured endpoint 

» Endpoints impacted by 3-6 months of treatment 

» Phase I/II endpoints predict Phase 3 

» Phase II result leads to attractive Phase 3: cost, time, 

risk, endpoints 

» Moderate to large market opportunity, or smaller (but 

capital efficient ) market opportunity 


Typical Investment 

» Phase I or Phase IIa data 

› Have invested in preclinical stage assets (BiPar) + platforms 

› Have invested in Phase III + commercial products (Advanced 

Biohealing) 

» Chance for best in class, but not first in class 

» Target profile leads to white space in market 


Business Model 

» Entrepreneur with identified asset and team partially 

assembled (Series A) 

» Established private company looking for outside investor 

(Series B, C) 

» Extensive diligence by Canaan on 

› Product 

› Market 

› Business plan 

› IP 

› Team 


Canaan Investment Model 

» Canaan usually lead investor, 15-35% ownership, board seat 

» Aggregate of $15-30M committed in series by syndicate 

› $5-10M by Canaan as part of syndicate 

› Can be series A, B, C – etc 

› Fund to value inflection, POC (e.g. EOP2) 

› Maintain reserves for subsequent needs of company 

› Help build team 

› Refine, execute, and modify business plan as needed 

› Position for deal (partnership, strategic sale, IPO) 

› Seed deals also when appropriate 

» Asset license: Upfront/milestones/royalty (usually no buy-back) 

» Possibility of fully funding and building company around asset 


Contact Us 


Dr. Luc Marengère 

VenGrowth Partners

September 23rd, 2010 

Prepared for PEI Venture Conference 

Prepared by 

Luc Marengère, Managing General Partner 

The material contained in this document is strictly confidential and the sole property of 

VGPartners Inc.

VG Partners Life Sciences Team 

Team Profiles 

Luc Marengère, Managing General Partner 

• 20 years of experience in life sciences 

• VenGrowth since 2001 

• CDP Sofinov - Partner 

• UMDI/MedTech Partners/MDS Capital – Investment Manager 

• Amgen 

• Ph.D. Medical Biophysics and Molecular Genetics, U. of Toronto 

Jeff Courtney, General Partner 

• 27 years of experience in industry 

• VenGrowth since 2002 

• CDP Sofinov – Partner 

• Faulding Canada – President 

• Pharmascience – EVP Marketing and Sales 

• Johnson & Johnson – Director Level: QA/Regulatory/Marketing 

• B.Sc. Microbiology, U. of Guelph 

Confidential and Proprietary 

29


VG Partners Life Sciences Team Offers… 

Established, stable partnership 

Investment experience compatible with Canadian 

industry stage and sectors 

Best in class investment practices 

Strong North American network – VCs and Corporate 

Track record of leading and syndicating transactions 

Dominant VC in Canada with privileged access to deal flow 

Confidential and Proprietary 30


Four Active Advisors Complement the Team 

Dr. Harold Wodlinger 

Cardiology & MedTech 

Biotech 

Entrepreneurial 

Success 

Dr. Teo Dagi 

Neurology & MedTech 

Advisor Value-add 

International Network & Deal Flow 

Team Value: 

Venture 

Network 

Operational 

Technical 

Deal Structuring 

Deep domain 

Expertise 

Dr. Charlie Bishop 

Metabolic Diseases 

Biotech/Pharma 

Backgrounds 

Dr. Elisabeth Corsi 

Oncology & Anti-Infectious 


Our track record 

Life Sciences Investment Team: Canadian Track Record & Performance 

Focus of capital: $200M invested in Canada 

Consistent lead investor: 10 out of 14 deals 

Maintain Board presence to influence strategy and exit 

Proven templates for building strong, viable companies 

with critical mass 

Ability to leverage capital and network 


Our track record – Capital Leverage 

VG Partners: Proven Ability to Attract Foreign Capital and Partnerships 

Co-Investors Corporate Partners 

$500M Of 

Leveraged 

Capital 


Our track record 

Current Portfolio 

Sales and IPOs: 

• Cita: sold to Vernalis in 2005 

• Kadmus: sold to Organon in 2007 

• Targanta: IPO on NASDAQ in 2007/ sold to The Medicines Company 2008 

• VSI: Sold to Sonosite in June 2010 

Financings, partnerships, acquisition offers 

• Aegera: >$300M deal with Human Genome Sciences 

• Axela/Xceed: Deal with Kimberley-Clark and Gen-Probe 

• Cytochroma: Deal with Mitsubishi Tanabe Pharmaceutical Corp 

• TTI: Deals with Medarex/BMS, Genentech and Biogen-Idec 

• Interface Biologics: Multiple deals with large medtech Coes; Fresenius 

• Zelos: US$45M Financing round led by Alta Partners (Frazier, Prospect, 

SROne) 


VG Partners: Our Value-Add 

VisualSonics Inc. - Device 

At Time of First Investment 

• Pre-commercial company with ultrasound imaging product 

• Animal imaging with potential to expand into human applications 

Accomplishments 

• Acted as lead investor for all financing rounds 

• Recruited executives including CFO from our network 

• Recruited Board members and industry experts 

• Funded development of 2nd generation device with clinical utility 

• Oversaw VSI to $30M in revenues and world class product commercialization 

Outlook 

• Current Cash Position: EBITDA Positive 

• Sold to Sonosite: June-2010 


The Canadian Ecosystem 

QC, ON, AB and BC life sciences industry all face the same challenges 

Early Stage 

Few life cycle 

investors 

Focus on 

Therapeutics 

Lack of lead 

• Lead Investor 

• Life cycle Investor 

• Multi-stages 

• Multi-sectors 

• Strong network 


Creating Sustainable Value 

Luc Marengère, PhD 

Managing General Partner 

T 416.628.9247 

T 416.788.3421 

E luc@vgparnters.com

Dr. Allan Johnston 

Synergy Ventures II LP, Synergy 

Partners International and Nikko 

Synergy Ventures LLC

Synergy Partners International 

Synergy Ventures 

Medical Technology Venture Capital 

医療技術ベンチャーキャピタル

Synergy Ventures II Fund 

Focus on Medical Technology (Devices, 

Diagnostics) 

Early Stage US Private Companies 

Strategic Partnership Assistance (Japan) 

Potential for Exit (3-4 years) via M&A 

Japan Corporate Limited Partners

Synergy Interests 

Cancer Therapy and Diagnosis 

Interventional Vascular 

Drug – Device Combinations 

Endoscopic/Endoluminal Therapies 

Respiratory 

Lifestyle / Home Healthcare (limited)

Past Investments 

NATUS MEDICAL - IPO 

OMNICELL TECHNOLOGIES -IPO 

CARDIAC PATHWAYS - IPO, M&A BSC 

PERCLOSE - IPO, M&A Abbott 

ALIGN TECHNOLOGY - IPO 

INTUITIVE SURGICAL IPO 

AMIRA MEDICAL - M&A Roche 

ENTERIC MEDICAL - M&A BSC 

FOX HOLLOW TECHNOLOGIES - IPO, M&A ev3 

SURGRX - M&A JNJ 

CHESTNUT MEDICAL - M&A ev3 

LIGHTLAB IMAGING - M&A SJM

Representative Portfolio Companies 

Uptake Medical - Thermal Vapor Lung Volume Reduction 

Spiracur - Negative Pressure Wound Therapy System 

Hourglass Technologies - Transoral Obesity Therapy 

Device 

Breathe Technologies - Portable Ventilation Augmentation 

CV Ingenuity - Drug Eluting Balloons for PAD 

Tria Beauty - Laser Consumer Cosmetic Devices

Dr. Jens Eckstein 

TVM Capital

TVM Capital Life Sciences Practice 

PEI 

September 2010 

Dr. Jens Eckstein

TVM Capital profile 

• Leading German-American venture capital firm since 1983 

- Active predominantly as lead and co-lead investor in all our core markets 

- Investing experience from over 230 deals in Europe and the U.S. 

- More than €1.3bn ($1.9bn) raised in six fund generations 

- Team of 24 professionals with rich operating, research, deal making and corporate 

finance experience 

- Deep network of top industry and academic advisors 

- Strong links to relevant industrial corporations in Germany, Europe and the U.S. 

• Three practices: 

Life Science Venture Capital & Healthcare Private Equity & Technology 

• Private Equity Online Award: “German VC company of the year 2002” 

• AltAssets Research “The Limited Partner Perspective”: 

“Leading European Venture Firm”, September 2003 

• Private Equity International Award: “German Private Equity Firm of the Year 2008” 

Source: TVM Capital 

46

TVM Capital life science profile 

• AUM for Life Sciences: close to €900m ($1.3bn) 

• One of the dominant players in Europe and the North East USA, two markets which 

are almost identical in size: the amount of money currently invested in private biotech 

companies in the North East USA is ~$6.1bn while all of Europe is ~ $6.0bn 

(Germany, Austria, Switzerland is ~31% of Europe) 

• 1st most active lead/co-lead investor in Germany over last 5 years 

• 3rd most active investor by number of investments in Germany over last 5 

years 

• 1st most active lead/co-lead investor in Germany (GER) + Austria (A) + 

Switzerland (CH) over last 5 years 

• 2nd most active investor in GER+A+CH over last 5 years 

• 5th most active lead/co-lead investor in the North East USA over last 5 years 

• 7th most active investor in North East USA over last 5 years 

• Investor in 6 out of the 44 largest companies still private in Europe (these 44 

companies have 50% of all money currently invested) 

• Investor in 5 out of the top 20 largest (strongest) biotech companies in 

Germany, Austria and Switzerland 


47

Investment strategy 

... a multi-stage investor for the LS industry 

Science 

Target 

selection 

screening 

Clinical 

candidate 

selection 

Pharm 

Tox 

1990ies: Creating companies based on transforming science 


PhI PhII PhIII Market 

2000+: Early technology companies & „Fast Forward“ strategy & late-stage 

companies, many of them now developing into revenue-stage businesses 

2006+: Early technology companies & “Fast Forward” strategy & Late-stage companies 

& revenue-stage “commercial” companies (classical “growth” investments in Mittelstand and 

Mature venture-backed life sciences/biotech companies) 

Life Science 

Venture 

Healthcare 

Private Equity 

48

Creating substantial companies 


49

Core business 

… a highly specialized provider in the Pharma vertical 

Outside our 

investment focus 


central labs, 

GP practices, 

diagnostic 

industry 

patients 

pharmaceutical 

industry 

medical 

diagnostics 

R&D related 

services 

specialty clinics 

& patient care 

HMOs 

hospital 

products 

& services 

hospital 

administration 

academia, 

pharmaceutical & 

diagnostic industries 

R&D lab 

instruments 

& supplies 

medical 

devices 

device 

industry, 

hospitals 

doctors & 

patients 

Pharmaceutical industry 

Platform with 

product opBioportunitiestech 

drug 

discovery & 

development 

Pharmaceutical 

industry, doctors 

& patients 

Pharmaceutical 

industry 

Our secondary 


Our primary 


50

Long-term stability paired with growth 

Life Science Venture Capital 

• Dr. Hubert Birner, MBA, General Partner 

(Munich) 

• Dr. Jens Eckstein, General Partner 

(Boston) 

• Dr. Alexandra Goll, General Partner 

(Munich) 

• Hui Hsing Ma, MSc, MBA, General Partner 

(Singapore & Munich) 

• Dr. Axel Polack, General Partner (Munich) 

• Dr. Irena Melnikova, Principal (Boston) 

• Dr. Peter Neubeck, MBA, Principal 

(Munich) 


Dr. Helmut M. Schühsler, Managing Partner (Munich & Boston) 

Healthcare Private Equity 

• Dr. Christoph Schröder, General 

Partner (Munich, Berlin) 

• Dr. Bernhard Schuler, Senior 

Advisor (Munich) 

• Dr. Anton Karremann, Senior 

Advisor (Munich) 

• Dr. Kia Parssanedjad, Principal 

(Munich) 

Two offices 

Two teams – 

one goal 

51

There is opportunity in every crisis - 

adapting to the new ecosystem

Projected Growth of Large Pharmaceutical Companies through 

2013 

Source: Datamonitor 

53

In-licensed Assets Continue to Increase in Large Pharma Pipelines 

Source: Tufts CSDD, Windhover Information, Nature Review 

54

Two Emerging Strategies In Life Science Investments 


55

Thank You For Your Attention 

Munich – Boston 

www.tvm-capital.com

Tom Hayes 

GrowthWorks Atlantic Ltd

Tom Hayes, President & CEO 

“Demystifying Venture Capital Investing” 

Charlottetown, September 23, 2010

GrowthWorks Overview 

� GrowthWorks is one of a select few active national 

venture capital investors 

� 6 venture funds across the country totaling $700 million in assets 

� Won CVCA “Deal/Entrepreneur of the Year” award in 4 of the past 9 years 

� Offices in Vancouver, Winnipeg, Toronto, Fredericton & Halifax 

� GrowthWorks Atlantic established in 2005 

� Manage 12 portfolio companies (21 investments including follow-ons) 

� Investment decisions made locally by Atlantic Canadian board members 

� All monies raised in Atlantic Canada, are invested in Atlantic Canada 

(NB,NS,NL) 

� GrowthWorks family of funds have invested over $50 

million in Atlantic Canadian companies since 2003 

59

40% of GrowthWorks Originated from Universities 

� 40% of investments funded by GrowthWorks 

nationally originated from Canadian universities 

� GrowthWorks is an early stage investor 

60

Retail venture capital (RVC) 

� Raise pools of capital from individual investors 

� Governments encourage alternative source of 

funding for innovative companies 

� Federal tax credit: 15% 

� Provincial tax credit: 20% 

� RRSP tax credit: 30 – 40% depending on investors income level 

� RVC accounts for 50% of all VC in Canada 

� RVC receives strong support from the federal 

government and most provinces across Canada 

61

Canadian Landscape – Responding with a Proven Model 

� RVC Funds receives strong support from Provincial 

Governments across the country 

� British Columbia establishes 

� maximum ticket size of $13,333 

� Saskatchewan increases 

� tax credit from 15% to 20% 

� Manitoba increases 

� ticket size from $5,000 to $12,000 

� Nova Scotia increases 

� from 15% to 20% tax credits with increase in the maximum annual eligible investment 

from $5,000 to $10,000 

� New Brunswick increase 

� from 15% to 20% tax credits with increase in the maximum annual eligible investment 

from $5,000 to $10,000 

� Newfoundland and Labrador increases 

� from 15% to 20% tax credits with increase in the maximum annual eligible investment to 

$10,000 

� Quebec increases 

� from 15% to 25% tax credits 

62

Contributions from 

Provincial Treasury $0.20 

Federal Government $0.15 

Individual Investor $0.65 

Significant Leverage Effect for the Province 

$1.00 $2.00* 

Syndicate 

+ = 

Investment 

Partners 

(BDC, EDC, GWCF, 

Avrio, etc.) 

Opportunity for a 15x 

leverage on monies 

contributed by the 

provincial government 

$3.00 

Invested in 

Emerging 

Growth 

Companies 

63

What We Look For 

Company 

� Strong management team 

� Large and growing markets 

� Technological innovation 

� Demonstrable value proposition 

� Product with a sustainable advantage 

Stage 

� Primary Focus: Early Stage 

� Secondary: Start-up; Growth 

capital for more mature 

companies 

Active Investment Strategy 

Sector 

� ICT 

� Advanced Manufacturing 

� Life Sciences 

� Regional Growth Industries 

Investment 

� Initial Investments will typically range 

between $500,000 and $1,500,000 

� Preferred shares, debentures 

� Look for syndicate partners to deliver 

larger financing rounds 

� Prepare for follow-on investments 

64

GWA Portfolio Companies 

Company Sector Province 

AnyWare Group Inc. Information Technology NB 

Azorus Information Technology NS 

Coast to Coast Publications Ltd. Printing NB 

DHX Media Film & Entertainment NS 

Impath Technologies IT / Video Technology NS 

Sampling Technologies Inc. Information Technology NS 

Spectral Diagnostics Inc. Life Science NB 

Origin Biomed Inc. Life Science NS 

Virtual Expert Clinics Inc. Information Technology NB 

Virtual Marine Technologies IT / Simulation Technology NF 

65

Questions & Answers 

For further information 

Please visit 

www.growthworks.ca/atlantic

Dr. Christian Cortis 

Advanced Technology Ventures

ATV OVERVIEW AND INVESTMENT 

CRITERIA 

“Demystifying Venture Capital Investing” 

68 Advanced Technology Ventures Confidential Information – Not to be Reproduced or Distributed 

Centre for Health and Biotech 

Management Research (CHBMR) 

September 23 rd 2010

69 

ATV OVERVIEW 

� Now in its 30 th year of operation 

� 6 Partners; 6 Venture Partners 

� Offices in Waltham, MA and Palo Alto, CA 

� Long-term commitment to Healthcare, IT, and Cleantech markets 

� $1.7 billion under management; now deploying ATV VIII 

� Proven history of building successful companies: 

Acme Packet 

Accord Networks 

Actel 

AppIQ 

Application Networks (Reuters) 

Berkeley Networks (Fore) 

Cadence Design Systems 

Celebrate Express 

Cepheid 

Credence Systems 

Cytyc 

DataSage (Vignette) 

Docent 

e-Security (Novell) 

Epigram (Broadcom) 

Healthshare 

Helixis (Illumina) 

Hypnion (Eli Lilly) 

Microvention 

MicroWave Networks (Cal Micro) 

Novoste 

Omneon (Harmonic) 

Proteolix (Onyx) 

Redline Networks (Juniper) 

RF MicroDevices 

Seagull Business Software 

Striva (Informatica) 

Teradata (NCR) 

Trans1 

TranSwitch 

UpShot.com (Siebel) 

Velogic (Keynote) 

ViryaNet 

WebLine Communications (Cisco) 

Xtent

70 

ATV LS Portfolio – Stage and indication diversification 

Prototyping 

EARLY STAGE EMERGING STAGE 

Calithera 

Animal 

Work 

Initial Humans Pivotal 

Human 

Trial 

Biosciences Cancer, DMD, Hematology, 

Inflammation, Metabolic disease 

Cancer 

Metabolic disease, 

Inflammation 

CNS (Pain) 

Autoimmune 

disease 

Oncology, Metabolic 

disease 

Cardiovascular 

disease 

LATER STAGE 

Approval Launch 

Oncology, Metabolic disease, 

Inflammation, CNS, Cardio-Renal

71 

Characteristics of Compelling Investments – Rule of “3Ps” 

People 

Products 

Payout 

• KOL founding team 

• Accomplished management 

• Advisory board aligned with business 

• Seasoned investors 

• Demonstrated unmet need 

• Transformational, not incremental 

• Dominant competitive position 

• Strong intellectual property, FTO 

• Workable regulatory path 

• Strong pricing power 

• Acceptable manufacturing complexity 

• Clearly identifiable customer 

• Active buyers 

• Multiple paths to exit 

• Fundable business model

72 

Matrix-Approach to Deal Screening 

Financing Stage 

Lead Asset 

/ Financing 

Start-up 

2 nd , 3 rd , 4 th , 

financing 

rounds 

Recaps 

Expansion 

rounds 

Special 

Situations 

Discovery or Platform 

Development 

Disruptive, 

Cap. Efficient 

Leverage Prior 

Investment 

Not Attractive 

Development stage of lead asset 

Late Preclinical to Early 

Clinical (pre human proof 

of concept) 

Syndicate to 

Fund to POC 

Case-by-Case 

Later-stage Clinical (posthuman 

proof of concept) 

Comm. Risk is 

Off Strategy 

Case-by-Case Case-by-Case 

Rare 

Preferred Opportunistic De-prioritize Apply finer filter

73 

Recent Life Science Investments 

Calithera 

Biosciences 

� “Discovery / Platform Development” 

� First-in-class cancer drugs 

� Unique biology based on caspase 

activation (apoptosis) 

� Founded by Jim Wells (UCSF, 

Sunesis, Genentech) 

� Retained Proteolix management 

� $40M Series A: ATV, Delphi, 

Morgenthaler, USVP 

� Milestone-based financing; funds 

through human data 

� “Late preclinical” 

� First-in-class metabolic disease drugs 

� Unique chemistry platform: 

conjugation of omega-3s with other 

anti-inflammatory molecules 

� Ex-Sirtris team 

� $37.5M Series A: ATV, Clarus, 

MedImmune, SVLS 

� Milestone-based financing; funds 

through human data

Janice Bourque 

Hercules Technology Growth Capital

Hercules Technology Growth Capital 

HTGC – Life Sciences 

Prince Edward Island Investor Conference 

September 23, 2010

76 

Life Science Team Paradigms 

• Take advantage of the team’s multi-disciplinary expertise to 

attract strong deal flow 

• Technology Platform and Intellectual Property of the 

portfolio company should create “multiple shots on goal” 

• Invest in companies that attract the best management talent 

and life science venture capital investors:

HTGC Life Science Underwriting Guidelines 

77 

Core Guidelines: 

– Management Team 

– Market Potential 

– Quality of Investors currently funding the Company 

– Access to Sources of Capital 

Key Diligence Item: 

– Company should typically have either: 

o multiple drug candidates in clinical / pre-clinical trials, or 

o a Platform Technology that can create distinct sets of Intellectual Property 

– It is all about the Company having “multiple shots on goal” which 

increases probability of success and “de-risks” the business model 

– By diligently following this strategy, even if one or two of the companies 

“shots misfire” the company is still able to access its various sources of 

capital

78 

Who We Are 

• Leading provider of Venture Debt and Equity financing to technology 

and life sciences companies 

– Primarily through senior debt with warrants 

– Nasdaq listed: HTGC 

• We invest in all stages of a company’s development 

– Emerging growth - Expansion stage – Established stage, including public orphans 

• Lender of choice – Completed over $2.0 Billion in commitments since 

inception (December 2003) 

– Strong reputation within the venture capital community 

– High brand recognition “Hercules” 

– National and international presence 

• Seasoned, proven management team with a track record

79 

Life Sciences Portfolio at a Glance 

Life Science Team Investments: 

• ~$800 million in “Venture Debt” Commitments to Life Sciences Companies 

since inception (~40% of HTGC total commitments to date of ~$2.0 billion) 

• Investments in ~40 Companies inception to date 

• Deal Sizes typically from $5 to $25 million 

Source: HTGC 10Q, HTGC Database

Typical Uses of Our “Less Dilutive” Capital 

80 

• Extend cash runway and reach new value inflection points 

• In-license new technology 

• Fund acquisitions 

• Shore-up the balance sheet ahead of negotiations with strategic 

partners or ahead of a potential IPO 

• Push the development of a new or secondary program or 

technology, which the company may not have done if it did not 

have access to this less-dilutive capital. 

• Sales Launch, Inventory Build-up, Larger Capital Expenditures

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